Overview

Short-term rentals are conditionally allowed in Pismo Beach, CA, but with significant restrictions as of November 2023.

• Vacation Rentals (VR): Permitted in certain zoning districts (C-1, RR, R-4) in the downtown core, with no owner residency requirement
• Short-Term Rentals (STR): NO NEW STR LICENSES are being issued as of November 7, 2023, per Ordinance O-2023-006. Only existing permitted STRs can continue operation
• Total Licensed STRs: Only 15 addresses are currently approved for STR operation citywide

This guide provides comprehensive information for investors considering STR investments in Pismo Beach.

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How to Start a Short-Term Rental Business in Pismo Beach

1. Current Market Reality

As of November 2023, no new STR licenses are being issued. Only existing permitted STRs can operate. New investments must focus on Vacation Rental opportunities in designated zones.

2. Step-by-Step Process for Vacation Rentals

Step 1: Zone Verification

• Confirm property is located in C-1 (Commercial), RR (Rural Residential), or R-4 (Multi-Family Residential) zones
• Use the Vacation Rentals Allowed Map for verification
• For properties in condominiums or planned developments, consult planning division for confirmation

Step 2: Planning Application Submission

• Use the online permit portal
• Register as a new user (separate from Business License/TOT login)
• Select correct Project Type from dropdown menu
• Submit all required documents (see detailed list below)

Step 3: Application Processing

• Planning Division reviews application
• City conducts property inspection
• Application approval required before Business License issuance

Step 4: Business License and TOT Certificate

• Apply through Finance Department portal
• Must be completed after Planning Division approval

Step 5: Operational Compliance

• Maintain Good Neighbor Policy
• Collect and remit Transient Occupancy Tax (TOT)
• Adhere to all operating standards

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Required Documents, Permits, Licenses, and Guidelines

Planning Division Application Requirements

1. Contact Information

• Property address
• Property owner information
• Responsible Party details (must be within 25 miles of rental property; P.O. boxes not acceptable)

2. Site Plan

• Detailed aerial photo including:
  • Parking locations
  • Unit location (for multi-unit properties)
  • Trash enclosure location

3. Floor Plans

• Detailed floor plans with dimensions
• Can be hand-drawn; professional drawings not required

4. Photographs

• Photos of all interior bedrooms
• Photos of parking locations

5. Legal Documents

• Proposed Notices for posting inside rental
• Written Notification proof:
  • Vacation Rentals: 300-foot radius notification
  • Short-Term Rentals: 500-foot radius notification
  • Include complete list of addresses and radius map
  • Obtain from Title Report Company

6. Authorization Forms

• Consent of Landowner Form if property management company applying
• Signed Affidavit (STR only)

7. Compliance Documents

• Review Inspection Checklist prior to appointment
• Proof of primary residence (for STR applications)

Required Licenses and Certificates

1. Planning Division Permit

   • Vacation Rental Permit OR
   • Short-Term Rental License (renewal only - no new issuances)

2. Business License (Finance Department)

   • Required for both VR and STR operations

3. Transient Occupancy Tax (TOT) Certificate

   • Mandatory for tax collection and remittance
   • Includes Lodging Business Improvement District (LBID) and Tourism Marketing District (TMD) compliance

Application Fees

| Permit Type | Base Fee | Additional Fees | Total | |---|---|---|---| | Vacation Rental Permit | $759.00 | $37.95 (5% digital archiving) | $796.95 | | STR Renewal | $759.00 | $118.00 (noticing) + $43.85 (5% digital archiving) | $920.85 |

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Specific Regulations by Jurisdiction

City of Pismo Beach Regulations

Vacation Rental (VR) Standards

• Permitted Zones: C-1, RR, R-4 zones in downtown core
• Owner Requirement: No owner residency required
• Structure Limit: Maximum 4 separate transient rental units
• Inspection: Required for bedroom count, parking, safety standards
• Business License: Mandatory after Planning approval
• TOT Compliance: Required monthly remittance

Short-Term Rental (STR) Standards

• Permitted Zones: R-1, R-2, R-3, OS-1, OS zones
• Status: NO NEW LICENSES - only existing permitted properties
• Primary Residence Requirement: Property must be owner's primary residence (183+ days/year)
• Occupancy Limit: 2 people per bedroom + 2 additional people maximum
• On-Site Parking Required:
  • 1 bedroom: 1 space minimum
  • 2 bedrooms: 2 spaces minimum
  • 3-4 bedrooms: 3 spaces minimum
  • 5+ bedrooms: 4 spaces minimum
• Frequency Limit: Maximum 182 rental days per year without owner present
• Homestay Exception: No day limit if owner present during rental

Operational Standards

• Quiet Hours: 10:00 PM - 7:00 AM (noise must be contained within property)
• Trash Management: No accumulation or storage visible from public view
• Visitor Policy: Visitors limited to same number as maximum occupancy; no overnight visitors allowed
• Traffic Standards: Must not exceed normal residential levels

Good Neighbor Policy

• Mandatory acknowledgment and compliance
• Rules posted prominently in rental property
• Outlined in PBMC Sections 17.113.070 and 17.09.070

Violation Penalties

• First Violation: Minimum $1,500
• Second Violation (within 1 year): $3,000
• Subsequent Violations: $5,000
• Separate Violations: Each rental night in violation may be considered separate offense
• License Revocation: Possible after 3 significant violations or 3 citations in 24-month period

County Level Regulations

San Luis Obispo County may have additional regulations through:

• Tourism Marketing District assessment (collected via City TOT system)
• County health regulations compliance required

State Level Regulations (California)

• Primary Residence Definition: Based on 26 C.F.R. §1.121-1(b)(2) (183+ days/year)
• Tax Return Documentation: Address used on federal/state tax returns as residency factor
• California Building Code: Life safety requirements for bedrooms (70+ square feet, 7+ foot minimum dimension)
• Noise Standards: Must comply with municipal nuisance codes (Chapter 9.24 PBMC)

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Currently Approved Short-Term Rental Addresses

The following 15 addresses are the only legally permitted STRs in Pismo Beach:

1. 402 Bettiga Way
2. 109 Capistrano Avenue
3. 251 Capistrano Avenue
4. 234 Castaic Avenue
5. 2501 Coburn Lane
6. 530 Harloe Avenue
7. 107 Indio Drive
8. 116 Naomi Avenue
9. 251 Palomar Avenue
10. 342 Palomar Avenue
11. 122 Santa Fe Avenue
12. 147 Seacliff Drive
13. 960 Tulare Street
14. 991 Tulare Street
15. 981 Wadsworth Avenue

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Contact Information

Planning Division (Primary Contact)

• Department: Community Development Department
• Address: 760 Mattie Road, Pismo Beach, CA 93449
• Phone: 805-773-4658
• Fax: 805-773-4684
• Hours: Monday - Friday, 8:00 AM - 5:00 PM
• Online Portal: www5.citizenserve.com/Portal/?installationid=103
• Staff Directory: Available at planning division

Finance Department

• Business License/TOT Applications: pismobeach.hdlgov.com/Home/Index

Enforcement Hotline

• VR/STR Violation Reporting: (800) 866-4301
• Purpose: Report unlicensed operations, noise violations, or other ordinance violations
• Required Information: Full address of location

Main City Contact

• Phone: 805-773-4657
• Address: 760 Mattie Road, Pismo Beach, CA 93449

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Source Links

Primary Ordinances and Codes

• Ordinance O-2023-006 (November 2023 STR/VR regulations)
• PBMC Chapter 17.09 - STR Outside Coastal Zone
• PBMC Chapter 17.113 - STR in Coastal Zone
• PBMC Chapter 5.22 - VR/STR Administrative Regulations

Application Resources

• Online Permit Portal
• Business License/TOT Portal
• Inspection Checklist
• Vacation Rentals Allowed Map

Required Forms and Notices

• Proposed Notices Template
• Written Notification Requirements
• Consent of Landowner Form
• STR Affidavit

Additional Resources

• Pismo Beach Municipal Code Library
• City Website
• FAQ Section

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Investment Considerations

Market Constraints

• STR Market: Effectively closed to new entrants (15 licensed properties only)
• VR Opportunities: Limited to specific downtown zones (C-1, RR, R-4)
• Competition: Existing operators have significant first-mover advantage

Compliance Risks

• High Violation Penalties: $1,500-$5,000 per offense
• Active Enforcement: City uses third-party contractors for monitoring
• License Revocation Risk: Multiple violations can result in permanent loss

Revenue Considerations

• TOT Rate: City Transient Occupancy Tax applies (specific rate not provided in sources)
• Additional Assessments: LBID and TMD fees apply
• Seasonal Demand: Coastal location likely generates strong seasonal rental demand

Key Takeaway: While Pismo Beach offers STR opportunities, the November 2023 ordinance changes have significantly restricted new market entry, particularly for STRs. Investors should focus on Vacation Rental opportunities in designated zones and ensure robust compliance protocols.