Vacation Rental Rules and Regulations

What is a Vacation Rental?

A vacation rental is a residential home or portion of a home that is rented for less than 30 days (Section 17.160.020). They are also referred to as "short-term rentals" or "transient rental uses".

Can My Home be a Vacation Rental?

The answer to this question all depends on location. The City of Capitola has established an area (the VRU or Vacation Rental Use overlay district) where vacation rentals may be operated. If your home is located within this area your property may be operated as a vacation rental. This area consists of the Capitola Village, Riverview Avenue as far north as city hall, as far west as Cliff Drive, as far east as Monterey Avenue, and as far south as Capitola Beach, as shown in the VRU Map.

SUBMITTAL REQUIREMENTS

Complete Vacation Rental Permit Application (see fee schedule for current fees).

Complete a Business License Application.

* these documents are located at the bottom of this page

PROCESS

Submit Transient Rental Permit Application and Business License Application to the City of Capitola.

Your application will be circulated through the following departments:

Planning Staff will review the application for completeness and compliance with zoning and parking.

The Finance Department will process and issue your business license.

ONGOING DOCUMENTATION

A Transient Rental Occupancy Certification will remain valid if the following documentation is kept up to date:

Business License must remain active and renewed annually.

Transient Occupancy Tax (TOT) Reporting must be submitted monthly, including months with no occupancy. TOT payments are administered by a HdL, a third-party operator. For more information please see our Finance page on the topic.

What If My Home Is Not Located In The Vacation Rental Area (VRU)?

Homes located outside this area may NOT be rented as vacation rentals. Homes outside the VRU may only be operated as “Long-term Rentals”. Long-term Rentals must be rented for 30 nights or more.

What Can I Do If I Notice A Non-Compliant Rental?

Permit violations or illegal operation of short-term rentals are typically enforced by neighbor complaints. If you notice a neighbor is operating a non-compliant vacation rental please fill out the Code Complaint Form. The City of Capitola will not disclose the identity of complainants; however, the City does not accept anonymous complaints.

You may submit code complaint forms to City Hall or email it to Katie Herlihy: kerlihy@ci.capitola.ca.us. Once a complaint is received and non-compliance is verified, a notice will be sent to the rental operator.

Non-compliant Vacation Rentals: Violation Notifications

The City of Capitola has been taking inventory of non-compliant vacation rentals using online hosting platforms since June 2015. Notifications of non-compliance are periodically sent out. If you receive this notice and are NOT operating a non-compliant rental please contact us immediately to take you off our inventory.

Property owners who rent vacation rentals outside the VRU zone or without proper permits will be ordered to cease their vacation rental operation and may be subject to daily fines if the use continues.

Contact

Please contact our Community Development Department if you have further questions.
Call (831) 475-7300 and ask to speak with a Planner.
Email planning@ci.capitola.ca.us