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City Council Voting on New VR Permit Fees

At the Morro Bay City Council meeting on Tuesday, April 12th, the council will be discussing and approving the new Master Fee Schedule for the upcoming year. Included in this fee schedule is a significant increase in permit fees for vacation rental licenses. Here is the verbiage stated on the City Council Agenda:

Increase to the Vacation Rental Administration and Monitoring Annual Permit Fee, which will now be $685 and will cover the costs associated with implementing the recently approved Short-Term Rental (STR) Ordinance, including monitoring, code enforcement and Community Development STR program administration as well as revenue processing and financial administration costs. STRs will also be required to have a valid business tax certificate and to get regular fire inspections, so the total annual cost to operate an STR will be approximately $925-950 in FY 2022-23 once CPI escalators are applied.

Here is the link to the City Council agenda and should you want to Zoom in or attend personally to comment on these fees, the information on how to do that is shown at the beginning of the document:

In the new Short Term Rental (STR) regulations, it was stated that permit fees would be assessed to cover reasonable costs of processing VR applications and inspection fees but not limited to just those 2 items.

According to the CC agenda, if these fees are approved, they will be assessed to all STR license holders on their anniversary date of receiving their original VR license, and new VRs will pay that amount the date their license is approved.

The total business license and permit fees for STR licenses breaks down as follows:

  • Biz license fee (all businesses must pay a biz license fee in Morro Bay, including VRs) – $154.67

  • Annual renewal (all businesses must pay this fee in Morro Bay, including VRs) - $15.00

  • ADA fee (all businesses must pay this fee in Morro Bay, including VRs) - $4.00

  • Fire safety inspection fee (all businesses must pay this fee in Morro Bay, including VRs) - $40.00

  • Current VR specific fee (for monitoring done by Host Compliance) - $110.00

  • New VR specific fee (as described above) - $685 (which, as we understand it, includes the $110 Host Compliance fee)

Given all the fees above, the total fees for an STR license will be $898.67. If you are a current STR license holder, also be aware that a new application will be required with your next renewal that will require extensive information about your rental including if it is hosted or non-hosted, local contact information, description of property including number of rooms, max guest occupancy, amenities and available parking for guests. You will also need to provide a copy of your house rules and proof that the house is insured as a short-term rental. All STRs will be subject to an inspection by the city as well. This inspection is different from the fire inspections that are also required.

The new regulations also require that you include your business license # in your advertising for your home on your own site and also on OTA sites such as Vrbo, HomeAway, Airbnb and other internet advertising sites.

Should you want to read the new STR regulations in full, you can find them here:

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