Monterey supervisors direct staff to draft residential STR ban amid lawsuit over ownership rules

The Monterey County Board of Supervisors on Jan. 6 voted to direct county staff to prepare amendments that would ban all short‑term rentals in residentially zoned areas while allowing and regulating them in commercial and agricultural zones.

The vote followed a lengthy public workshop and hours of testimony from residents, neighborhood associations and industry groups. The board's action is a response to litigation challenging two parts of the county's August STR ordinance: a requirement that homestay permits be limited to property owners who reside on site and a restriction limiting permit eligibility for properties held in corporate form. County staff had suspended enforcement of those two provisions on Dec. 12, 2025, pending board direction.

Supervisor Glenn Church moved, and Supervisor Kate Daniels seconded, the motion directing staff to draft an ordinance that would: prohibit STRs in residential zones (while excepting Monterey Dunes), preserve STR activity in commercial and agricultural zones under a revised regulatory framework, and amend the ownership and residency provisions to address the constitutional claims raised by plaintiffs. The motion passed unanimously.

Supporters of stricter limits said concentrated STR activity has removed housing from local workers and changed neighborhood character, especially on the Peninsula and in Big Sur. LandWatch Monterey County and several community associations urged eliminating new commercial permits. Opponents — including owners, tourism‑sector representatives and some coastal businesses — warned a ban would harm tourism, local workers and transient‑occupancy tax revenue, and could displace rather than free housing for residents.

County staff told the board the lawsuit invokes the dormant commerce clause and the equal‑protection clause, arguing the current code treats non‑resident or corporate owners differently from local, natural persons. Staff said those two provisions are legal vulnerabilities that, if left unchanged, could expose the county to damages claims.

The board requested that staff proceed through the planning commission and Coastal Commission processes as needed for coastal area changes, and to return with draft ordinance language and maps clarifying which zones would be affected. The board also asked staff for additional permitting and enforcement plans and for data on permits applied for versus available caps.

The action does not immediately change current permits; rather it directs staff to draft formal amendments for commission review and eventual board adoption. The planning commission and Coastal Commission review steps, and any subsequent legal challenges, will dictate the timetable for implementation.

The board's direction is intended to resolve the particular constitutional claims in the ongoing litigation by creating a uniform rule for all property owners in residential zones, while maintaining a path for visitor‑serving and ag‑linked operations to apply in nonresidential zones.