Arroyo Grande, California

Short-term rentals in Arroyo Grande are governed by Ordinance No. 718, adopted October 11, 2022. The city distinguishes two categories: vacation rentals (owner not present, under 30 days) and homestays (owner-occupied, operator on-site for the entire stay, maximum two lodging rooms). Both require a Minor Use Permit, a Plot Plan Review approval, and a city business license. Vacation rentals do not require owner-occupancy, but a hard citywide cap of 90 vacation rental permits exists and has been reached. No new vacation rental permits are being issued. New properties also cannot be within 500 feet of an existing STR or a school.

Apartment and occupancy rules: overnight occupancy is limited to two persons per bedroom plus two additional persons, and properties are limited to two off-street parking spaces. The city’s Transient Occupancy Tax (TOT) rate is 10%, applied to all stays of 30 days or less. TOT collection frequency was increased from annually to twice yearly as of a September 2024 Council amendment. Enforcement is rated strict: permits face revocation after three unresponsive emergency-contact incidents within 12 months, two police citations or arrests from guest behavior within 12 months, or failure to remit TOT. Investors should verify permit status and transferability on any target property before purchase, as the permit cap makes this the binding constraint on market entry.