Santa Cruz Council advances first reading of ADU ordinance amendments, directs staff to analyze short-term rental limits

The Santa Cruz City Council advanced a first reading on amendments to the city’s accessory dwelling unit (ADU) regulations on Feb. 14, moving to align local rules with recent state laws and to clarify permit processing and use standards.

Clara Stanger, senior planner with the Community Development Department, told the council the package responds to state statutes that took effect in January 2026 (identified in the staff presentation as SB 543, SB 1154 and AB 462) and includes changes to how ADU and junior ADU (JADU) floor area is measured, alignment of JADU sprinkler and fee rules with ADU requirements, and new permit-processing steps. “We are seeking to have these amendments move forward as soon as possible to ensure our ordinance remains consistent with state law,” Stanger said.

Stanger said the proposed use-standard changes would prohibit short-term rentals of JADUs and adjust owner-occupancy requirements in cases where a JADU has its own bathroom. She described a new requirement for the city to issue a completeness determination on ADU/JADU building permit applications and to create an appeal process for completeness determinations or denials. She also said some ADU coastal permits would no longer be appealable to the Coastal Commission, making them staff-level reviews in many cases.

The Planning Commission recommended one additional change: allow sites with ADUs to obtain a short-term rental permit for the primary dwelling for no more than seven consecutive days and no more than 90 days per year, provided the primary dwelling remains the owner's principal place of residence. Stanger said staff completed only a preliminary review of that proposal and wants more detailed analysis of enforceability and policy impacts before adopting time limits.

Council members asked several questions about the planning commission’s timing constraints and implementation. Council member O’Hara said she was “somewhat concerned” about the proposed limits, citing the potential for many different short-term occupants over a year. Stanger replied that the planning commission’s discussion was “fairly high level” and that staff had identified several follow-up issues that need deeper study.

Vice Mayor Kalantari Johnson moved to adopt the ordinances for first reading as presented and to direct staff to analyze the Planning Commission’s recommended short-term rental modifications and return at the next annual ADU update; the council seconded the motion and approved it by roll call. The staff report anticipates a second reading on Feb. 24 and notes that one ordinance will require Coastal Commission review in the spring.

What happens next: staff will complete the requested analysis of the short-term-rental proposal and determine timing in the context of state-mandated deadlines and other council priorities; the ordinances will return for a second reading and, where required, Coastal Commission review.