Atascadero council tells staff to draft short-term rental ordinance centered on primary-residence permits

Atascadero city staff were directed Tuesday to draft a short-term rental ordinance that would prioritize properties that are the owner's primary residence, require a one-time safety inspection and a 24-hour local contact for complaints, and include neighbor-notification and enforcement provisions.

The planning director, Dunsmoor, told the council the city currently shows about 150 active short-term rental licenses and that only 18 licensed units are in multifamily zones, with just two in actual multifamily structures. He also said Senate Bill 346, the Short-Term Rental Facilitator Act, allows cities to compel listing platforms to share addresses and listings but requires a local ordinance to use that authority.

The nut of Tuesday's discussion was whether to preserve owner-occupied housing stock and neighborhood quality or allow broader use for investors. Council member Funk argued for rules that protect neighborhoods while allowing some owner-occupied flexibility; Mayor (presiding) repeatedly emphasized keeping regulation simple and enforceable. Several council members favored restricting non-owner-occupied whole-house rentals by making primary residence a requirement for new permits while considering narrowly tailored exceptions and a grandfathering cutoff for existing permits.

Fire safety and parking drove much of the debate. Fire Chief Bryson said propane barbecues and propane fire pits would generally be acceptable but that wood-burning pits and open fires are higher risk. Council asked staff to consider life-safety inspection elements such as functioning smoke and carbon-monoxide detectors, a fire extinguisher, occupant egress and on-site parking capacity. Several council members and the planning director said inspections should be one-time at permit issuance and complaint-driven thereafter to limit costs.

Public commenters urged a range of positions: residents asked for tight limits in high-fire-hazard and multifamily areas and stricter penalties for repeat violations; operators urged reasonable fees and flexibility to avoid onerous third-party costs.

Council's consensus instructions to staff included: 1) prepare an ordinance favoring primary-residence (owner-occupied or primary-residence) permits for future approvals, with options for limited administrative exceptions; 2) require a 24-hour local contact or equivalent for all permitted STRs when the owner is not on-site; 3) include an initial life-safety inspection focused on smoke/CO detectors, extinguisher and safe egress and record on-site parking allowances; 4) generally prohibit on-street parking for STR guests unless an applicant demonstrates acceptable conditions via a site plan; 5) design meaningful penalties and permit-revocation paths rather than token fines; 6) propose grandfathering options (dates and amortization periods) and outline enforcement and fee structures, including whether unpaid TOT or unlicensed listings could be recovered using SB 346 tools.

Director Dunsmoor said staff will return with a draft ordinance and implementation options, including cost estimates and possible third-party vendor roles for listing monitoring and TOT collection. The council indicated it wants the final draft to return to council (and not go directly to the planning commission) so a full council can participate when conflicts are resolved. The council did not adopt the ordinance Tuesday; it provided direction and asked staff to prepare options and cost estimates for future hearings.

The next procedural step is for staff to prepare draft ordinance language, implementation options and grandfathering dates and return to the council for further direction before forwarding to the planning commission.