Santa Monica, California Short Term Rental Regulations Guide for Airbnb hosts

Overview: Are Short-Term Rentals Allowed in Santa Monica?

Yes, but with strict limitations. Santa Monica allows one specific type of short-term rental called "Home-Sharing," while prohibiting "Vacation Rentals." This distinction is fundamental to understanding the market:

Home-Sharing (Allowed): Rental of 30 consecutive days or less of one or more bedrooms in your primary residence, provided you live on-site throughout the guest's stay
Vacation Rentals (Prohibited): Rental of 30 consecutive days or less of an entire home or unit for exclusive transient use when you're not present

Santa Monica has maintained this framework since adopting the Home-Sharing Ordinance on June 12, 2015, with significant amendments on September 24, 2019. The city has actively defended this regulatory approach, including successfully defending against legal challenges from major platforms like Airbnb and VRBO in federal court.

How to Start a Short-Term Rental Business in Santa Monica

Step 1: Determine Eligibility

To qualify for home-sharing, you must:

Be a natural person (not a company)
Own the property OR be a long-term resident who has resided in the unit for the prior 12 months and intends to reside for the 12 months following your permit application
Use your primary residence only
Be present throughout the guest's stay

Step 2: Application Process

Santa Monica uses a single application for both required permits:

Home-Sharing Permit: $100 application fee
Business License: $4 state fee
Total Initial Cost: $104
Annual Renewal: $50 for permit renewal

Step 3: Required Documentation

Your application must include:

Proof that the address is your primary residence
Your residency status (owner or long-term tenant)
Type and size of the dwelling unit
Number of bedrooms and maximum guest capacity
Insurance coverage verification
Contact information for all designated hosts living in the home
Signed certification agreeing to comply with all city regulations

Step 4: Submit Application

Applications are processed through the Planning & Community Development department. The single application obtains both permits simultaneously.

Required Documents, Permits, and Licenses

Mandatory Permits and Licenses

Home-Sharing Permit (City of Santa Monica)
- Initial application: $100
- Annual renewal: $50
- Application packet available at: Home-Sharing Registration Packet
Business License (State of California)
- Initial fee: $4
- Required for all home-sharing operations

Supporting Documentation

Primary residence verification
Insurance documentation
Host contact information
Property details (bedroom count, occupancy limits)
Compliance certification

Legal Framework Documents

Home-Sharing Ordinance No. 2616 (CCS) adopted September 24, 2019: [PDF Link](/uploadedFiles/Departments/PCD/Permits/Home share O-2616.pdf)
Administrative Rules and Regulations: [PDF Link](/uploadedFiles/Departments/PCD/Santa Monica HomeSharing Rules PDF July 2017(1).pdf)
Municipal Code Chapter 6.20: Home-Sharing Ordinance provisions

Specific Regulations by Jurisdiction

City of Santa Monica - Home-Sharing Ordinance

Occupancy Limits

Total Occupancy: Lesser of 10 total people, 1 person per 200 square feet, or 2 adults per bedroom
Host Inclusion: Count includes the host and all permanent residents
Children: Not counted toward the 2 adults per bedroom limit

Booking Restrictions

Maximum 2 groups of visitors at any time
Maximum 2 listings per property
Must be 30 days or less per stay
Host must be present throughout the entire stay

Guest House Provisions

Pre-March 31, 2017 Guest Houses:

Allowed if on single-family parcel (as classified by L.A. County Assessor)
Host must reside in either main house or guest house during home-share
Cannot be a "Rent Control Bootleg Unit"

Post-March 31, 2017 Guest Houses:

Allowed only if host resides in the guest house during home-share
Cannot reside in main house while using guest house for home-sharing

Parking Limitations

1 vehicle per rented bedroom
In preferential parking zones: maximum 2 visitor permits total

Rent-Controlled Units

Home-sharing allowed provided rental income does not exceed Maximum Allowable Rent
Coordinate with Rent Control Board for compliance

Los Angeles County - Assessment Requirements

Guest house eligibility depends on L.A. County Assessor's parcel classification
Single-family vs. multi-family classification affects guest house home-sharing eligibility

State of California - Business Licensing

$4 state business license fee required
State regulations don't supersede local home-sharing restrictions
Platforms must comply with local licensing requirements

Tax Requirements and Financial Obligations

Business License Tax (City of Santa Monica)

Home-sharing is classified as Tax Rate Group III (Services):

Base Rate: $75 on first $60,000 of gross receipts
Overage Rate: 0.3% for every $1,000 above $60,000
Calculation Example: $75,000 gross receipts = $75 (first $60K) + $45 (remaining $15K) = $120 total tax

Important Notes:

Based on gross receipts, not net income
No deductions allowed for expenses
Small Business Exemption available for $40,000 or less annual gross receipts

Transient Occupancy Tax (TOT)

Rate: 14% of total rental amount including cleaning fees
Exemptions: Federal, State, or City of Santa Monica employees on official business only
Collection: Host responsible for collection and monthly remittance
Platform Collection: Major platforms like Airbnb collect and remit automatically

Additional Financial Obligations

Monthly TOT payments due to Treasury Operations
Annual business license tax filing and payment
Insurance requirements (specific coverage amounts not detailed in provided content)

Contact Information for Local Authorities

Planning & Community Development Department

General Home-Sharing Information:

Phone: (310) 458-4984
Email: code.enforcement@smgov.net
Website: Home-Sharing Ordinance

Business License Division

Business License Applications and Tax Questions:

Phone: (310) 458-8745
Email: business.license@smgov.net

Finance - Treasury Operations

Transient Occupancy Tax Questions:

Phone: (310) 458-8741
Email: treasury@smgov.net

Rent Control Board

Rent Control Compliance Questions:

Phone: (310) 458-8751
Email: rentcontrol@smgov.net
Website: Rent Control Regulations

Code Enforcement Division

Violations and Complaints:

Phone: (310) 458-4984
Email: code.enforcement@smgov.net
Online Reporting: www.smgov.net/sm_go.aspx
Mailing Address: 1685 Main Street, Room 111, Santa Monica, CA 90401

Communications Department

Media and Press Inquiries:

Contact: Constance Farrell, Communications & Public Information Manager
Email: Constance.Farrell@santamonica.gov

Enforcement and Penalties

Administrative Fines

Initial Penalty: $1,000 per day per violation
Increased Penalties: Fines increase for continued violations
Additional Costs: Investigation costs may be added
Legal Action: Non-compliance may result in referral to City Attorney's Office

Prohibited Activities

Advertising unlicensed vacation rentals
Operating vacation rentals (un-hosted short-term rentals)
Processing transactions for unlicensed properties (for platforms)
Exceeding occupancy limits
Violating parking restrictions

Investigation Process

Complaints can be made anonymously
Code enforcement investigations include property visits and evidence gathering
Administrative citations issued for violations

Zoning and Land Use Considerations

Applicable Districts

Home-sharing ordinance applies citywide to all residential units
Includes single-family homes, condominiums, and apartments
No zoning district exceptions

Land Use Compliance

Article 9 of Municipal Code: Land Use and Zoning Ordinance
Article 8 of Municipal Code: Construction, design, and maintenance standards
Hosts must ensure listings comply with zoning requirements and building standards

Additional Compliance Considerations

Private Agreements

Home-sharing ordinance does not override:
- Homeowners Association (HOA) rules and CC&Rs
- Rental lease agreements
- Condominium board rules
- Co-op regulations

Action Required: Review all private agreements before applying for permits

Platform Compliance

Major platforms (Airbnb, VRBO) must verify proper licensing
Platforms collect and remit TOT automatically
Platforms required to ensure transactions involve licensed properties only
Format for permit numbers on listings: xxxxxx (6 digits)

Ongoing Requirements

Annual permit renewal mandatory
Monthly TOT remittance required
Compliance with all posted regulations
Maintain current insurance coverage
Report changes in host status or property details

Links to Source Pages

Official City Resources

Home-Sharing Ordinance Main Page: https://www.smgov.net/Departments/PCD/Permits/Short-Term-Rental-Home-Share-Ordinance/
Home-Sharing Registration Packet: https://www.santamonica.gov/uploadedFiles/APKT-Home-Share(2).pdf
Home-Sharing Ordinance No. 2616 (PDF): [https://www.santamonica.gov/uploadedFiles/Departments/PCD/Permits/Home share O-2616.pdf](https://www.santamonica.gov/uploadedFiles/Departments/PCD/Permits/Home share O-2616.pdf)
Administrative Rules and Regulations (PDF): [https://www.santamonica.gov/uploadedFiles/Departments/PCD/Santa Monica HomeSharing Rules PDF July 2017(1).pdf](https://www.santamonica.gov/uploadedFiles/Departments/PCD/Santa Monica HomeSharing Rules PDF July 2017(1).pdf)
Home-Sharing Registry: https://data.smgov.net/browse?q=Home-Sharing%20Registry&sortBy=relevance

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Investors should consult with local authorities and legal professionals to ensure full compliance with all applicable regulations. The regulatory landscape for short-term rentals in Santa Monica is actively enforced and subject to change.