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Some Good News after 1st City Council Meeting

The Morro Bay City Council conducted their first review of the new proposed Short Term Rental Ordinance which has now been named Ordinance No. 640. First of all, we want to THANK ALL OF YOU that supported fair and reasonable regulations by writing letters, making public comment during the City Council meeting and signing our petition. (If you haven’t signed it yet, please go to and sign it.)

As stated in the last update, the Planning Commission completed their review and made their recommendations as input to the CC meeting. The Chamber of Commerce conducted a second and final review of this draft ordinance and sent their feedback to the Council. The Tourism Improvement District also reviewed the ordinance and provided their recommendations to the City Council as well. The Scenic Coast Realty Association joined in by submitting a position paper that addressed specific items in the ordinance that would affect real estate transactions and property rights. The one common recommendation across all these groups was that the city abandon the idea of the lottery that would revoke licenses from current, compliant STR licensees and instead allow attrition to bring all homes into compliance with the new rules. Our team was also working diligently behind the scenes to push for grandfathering of current licenses.

Well, it all paid off because even though the City Council did not take an official vote on this issue, there was a 4 – 1 verbal agreement by Council members to allow grandfathering! YAY!! So your favorite vacation rental should still be available to you for years to come as long as the owner doesn’t sell it or move in.

The Council, for the most part, accepted the other changes suggested by the Planning Commission and TBID. Those items are:

  1. Reduce the maximum # of STR licenses in residential areas from 250 to 175 but exclude all home stay type rentals (hosted rentals) from this count. Currently there are about 216 active (paying in to TOT) rentals in the city but some of these are hosted rentals so the 175 allowed licenses should cover most existing license holders.

  2. Maximum occupancy for a full home STR is 2 people per bedroom/sleeping area plus 2 additional people with a maximum of 10 people in any home. Children under 3 would not count toward that maximum number. We would like to see this raised to 12 maximum in order to accommodate some larger groups.

  3. Density requirements originally stated that for all new STR licenses issued, their must be 3 lots in between STRs. The PC added that it must be a minimum of 175 linear feet or 3 lots, whichever is greater.

  4. The proposed ordinance prohibits the transfer of a license to the buyer upon sale of the house and also prohibits the transfer to heirs upon death of owner. It appears the Council is going to keep that regulation without change.

Next Actions: The City Attorney will make the suggested changes to the ordinance and at the next meeting (Oct 13th) the City Council will have the official 1st reading of the ordinance followed by the 2nd reading on October 27. If there is a majority vote to adopt the new ordinance, it will then be sent to the California Coastal Commission for approval. It is unknown how long this will take due to their packed schedule. Once approved by CCC, the ordinance becomes the new law replacing the existing ordinance.

Even though this ordinance places many new, stricter requirements on STR licensees with the intent of ensuring that the visitors staying in STRs behave in a manner that respects the neighborhood and the residents of Morro Bay, we wholeheartedly support these regulations. We realize we live in a special place that the public is entitled to share but we also want to ensure that the residents will be able to enjoy peace and quiet in their neighborhoods. Remember, when you come stay in Morro Bay, BE A GOOD NEIGHBOR!

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