Monterey County just inched closer to one of California’s toughest short-term rental restrictions. If you operate an unhosted STR in Big Sur and Carmel Highlands, your listing may soon be illegal and fines could follow.

Big Sur and Carmel Highlands Ban Unhosted Short-Term Rentals

The California Coastal Commission has officially approved Monterey County’s proposal to ban all unhosted short-term rentals in Big Sur and the Carmel Highlands. This new regulation represents a major shift for the area, effectively ending most Big Sur short-term rentals that are not owner-occupied. Supporters of the Carmel Highlands vacation rental ban argue that the fragile coastline has long been at risk from overcrowding, landslides, and a lack of infrastructure to support heavy visitor traffic.

Other coastal zones in Monterey County, such as Del Monte Forest, home to Pebble Beach, will continue to allow vacation rentals, but only under a strict 4% rental cap. This cap significantly limits the number of STR permits available, creating tighter competition among hosts while reducing the impact on local neighborhoods.

Community groups like Keep Big Sur Wild have been at the forefront of this push, emphasizing the need to protect the environment and preserve the rural character of the region. On the other hand, local businesses remain divided. While many shop owners and restaurants depend on tourism revenue, residents often argue that unhosted rentals overwhelm Big Sur’s limited infrastructure. The debate highlights a core challenge for Monterey County: finding a balance between protecting its coastline and maintaining a sustainable short-term rental market that supports the local economy.

Two Sets of Rules, One Coastline

• Hosted stays remain legal: Homeowners who live on-site can still rent out rooms, attached units like ADUs, or detached guest houses. This category of “hosted short-term rentals” is considered lower impact because the owner is present to manage guests directly.
• Unhosted entire-home rentals face major restrictions: In Big Sur, all unhosted vacation rentals will be banned, affecting 37 currently licensed properties. In other coastal areas like Pebble Beach and Del Monte Forest, these rentals are still allowed but subject to strict caps on the total number of permits.
• Limited exemption for occasional rentals: Property owners who rent their home no more than three times per year may qualify for a special exemption. This option is designed for locals who only occasionally use platforms like Airbnb or Vrbo, rather than operating as full-time vacation rentals.
• Enforcement will reshape the STR market: Once the new rules are phased in, more than 100 short-term rentals in Carmel are expected to be eliminated, with dozens more lost in Pebble Beach and Del Monte Forest. Enforcement will likely focus on rooting out illegal listings that continue to operate outside the new permit system.

Breakdown of the Current STR Law

• No unhosted STRs in Big Sur & Carmel Highlands
• 4% cap in Pebble Beach & Del Monte Forest
• Existing unhosted STRs will be phased out (specific timelines pending)
• Hosted stays (owner on-site) remain permitted
• Exception: homeowners renting ≤ 3 times/year
• Registration is required for all hosted units
• Fire & safety standards apply to hosted rentals
• Zoning enforcement tightened
• Ads must accurately reflect zoning compliance
• Annual renewal is required through Monterey County
• Proof of tax registration & collection required
• Emergency contact info must be posted inside property
• County will maintain a tracking system for STR numbers
• Enforcement will occur through fines, delistings, and inspections

Compliance To-Do List for Hosts

• Verify if your property is inside Big Sur, Carmel Highlands, or Pebble Beach
• Switch to hosted model if you live on-site
• Remove unhosted listings before phase-out
• Register with Monterey County planning department
• Post required safety notices & emergency contacts
• Keep tax receipts & guest records for audits
• Monitor Board of Supervisors meeting

Strategic Insight

California is steadily moving toward tighter coastal short-term rental restrictions statewide, and Monterey County’s new rules are just one example of this trend. Cities like Santa Cruz, Malibu, and Santa Monica already have strict limits in place, showing how quickly exemptions can vanish as local governments seek stronger control over vacation rentals. Looking ahead, hosts should also prepare for platform-level enforcement, where companies like Airbnb and Vrbo may be required to automatically block or remove noncompliant listings. For property owners and investors, the safest long-term strategy may be to pivot to hybrid rental models combining short-term rentals with mid-term stays which are far more likely to remain legal across California’s coastal zones.

Worried about how Monterey’s new STR rules affect you?

We can help you confirm zoning eligibility, register your rental, and handle tax setup and remittance so you stay fully compliant. Get started with us today and protect your listing before enforcement begins.

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