Dana Point, California

Short-term rentals are legal in Dana Point but regulated under Municipal Code Chapter 5.38 with a two-program structure and hard supply caps. All STRs require a city-issued permit displaying the permit number in all advertising, an initial city safety inspection, and a Transient Occupancy Tax (TOT) registration; operators collect and remit the 10% TOT quarterly.

The program is split between the California Coastal Zone (governed by Coastal Development Permit CDP22-0010, capped at 115 non-primary permits) and the non-coastal zone (also separately capped). New entrants typically join a waitlist for non-primary permits in capped zones. Permit types include non-primary, homestay, primary-residence, multi-family homestay, and mixed-use; non-primary is the relevant type for dedicated investor STRs. Owner occupancy is not required for non-primary permits. New permits cost approximately $780 annually.

Operational rules include a mandatory 2-night minimum stay and a requirement for at least 2 off-street parking spaces. Multifamily properties are limited: buildings of 5 or fewer units may convert a maximum of 1 unit to STR; buildings with 6 or more units may convert up to 20%. Enforcement is strict: fines escalate at $1,500, $3,000, and $5,000 per violation, and a third violation triggers permit revocation. In 2025, the city contracted Deckard Technologies for AI-based detection of unpermitted rentals.

In November 2024, voters rejected Measure T (which would have halved STR permits) by 64% to 36%, preserving the existing program. In May 2025, the City Council voted 4-1 to streamline approvals and activate 15 waitlisted permits.