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New STR Ordinance headed to City Council

The Morro Bay Planning Commission spent 2 sessions reviewing the new proposed Short Term Rental (STR) ordinance. These sessions were held on August 18th and September 1st. They heard many public comments and received a lot of written communication with people weighing in on both sides. Most of the local citizens were pushing for MORE stringent regulations, e.g., smaller cap on number of STR licenses allowed, greater distance between STRs and a lottery to bring everyone into compliance with the cap and the distance rules sooner than the 3 years that is currently in the ordinance. However, after hours of discussion, the Commission ended up recommending that the ordinance move forward as written with the following recommended changes and clarifications:

  • No apartments in the residential zones allowed to have an STR license.

  • Apartments in the commercial and mixed-use zones to have one STR license for every 8 apartments.

  • Lower the maximum number of STR licenses allowed in residential zones to 175 for Full Home STRs but this will not include Home Sharing STRs.

  • Home Sharing STRs will not have a cap.

  • No limit for Full Home or Home Sharing STRs licenses in commercial or mixed-use zones.

  • No wood burning stoves to be allowed at STRs.

  • Maximum occupancy for any STR should be 2 people per bedroom plus 2 additional people with a maximum at any STR of 10 occupants. Children under 3 years of age are not counted.

  • All STRs must display a sign that is visible and legible from the street that shows this is a vacation rental and provides the contact telephone number for the person/manager responsible for the property. If the city implements a hotline for reporting nuisances, that will be on the sign as well. The city plans to provide a template for license holders to follow.

  • In addition to the density rules (proximity rules) stated in the proposed ordinance, the Planning Commission added an additional requirement stating that there must be a 175 linear ft separation between STRs and the greater distance will be applied. Example: The ordinance states that there must be a minimum of 3 lots between STRs but with this additional requirement, if those 3 lots were only 50 ft. wide, then the 175 ft rule would kick in so there could not be another STR closer than 175 ft. If the opposite were true, i.e. each of the lots on either side of an STR were 100 ft wide, then the 3-house separation would apply.

No changes were made to the current requirement that a lottery be held in 3 years to bring all STRs into compliance with the density rules. Several STR owners and managers made public comment and/or wrote emails objecting to this but to no avail.


We support most of the new regulations. However, find below the issues we feel need to be challenged:

1. NO LOTTERY! WE MUST HAVE GRANDFATHERING! Homeowners have purchased and invested in their properties with the assurance that they could get and hold a STR license as long as they complied with all rules.

2. REDUCE THE DENSITY RULES! The nearby tourist communities (Cayucos, Cambria, Avila Beach) have varying distance rules with the maximum being 150 ft in Cambria where the lots are much bigger. Because of the density of homes in parts of Morro Bay, a 175 ft. linear separation requirement could eliminate any other licenses on the entire block.

3. REMOVE THE MAXIMUM OCCUPANCY INTRODUCED BY THE PLANNING COMMISSION. The new ordinance states that maximum occupancy for a home shall be 2 people per bedroom plus 2 people. There are not that many larger homes in Morro Bay to merit the additional requirement of 10 maximum. This will eliminate a certain set of travelers who are bringing multiple families together. Requirement as written should stand without a maximum.

4. NO NEW LICENSES TO BE ISSUED AND NO TRANSFER OF LICENSE UPON SALE OR DEATH ALLOWED! The City Council just passed an Urgency Ordinance stopping the issuance of any new licenses and also stopping the transfer of any STR license when home is sold. They did this under the pretense that STRs jeopardize the health and safety of our neighborhoods during this time of COVID and yet they cannot prove that there has been one case in Morro Bay that is from a guest staying in a vacation rental. With this move they have circumvented the due process that the new ordinance is going through to push through these specific regulations. Appalling!


This ordinance, with the recommended changes mentioned above, now moves on to the City Council for review starting with the September 22nd meeting. Please make your voices heard on these important issues that, if not stopped, could result in you losing your STR license! Please email your comments to: Council@morrobayca.gov and specify in your Subject line or beginning of your email that this correspondence is for the agenda item related to the STR Ordinance.

You can also join the webinar for the City Council meeting on 9/22 at 5:30 p.m. by following the instructions below. If you join live, you will be able to make a 3 minute comment on the agenda item.

Please click the link below to join the webinar: ➢ https://us02web.zoom.us/j/82722747698?pwd=aWZpTzcwTHlRTk9xaTlmWVNWRWFUQT09#success

➢ Or Telephone Attendee: 1 (408) 638-0968 or 1 (669) 900 6833 or 1 (346) 248 7799; Webinar ID: 827 2274 7698; Password: 135692; Press * 9 to “Raise Hand” for Public Comment

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