Costa Mesa Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Costa Mesa, California?

Costa Mesa has banned all short term rentals within city limits as of November 2021 per an urgency ordinance passed by the city council. Fines up to $1000 per day can be levied for violations.

Prior to the ban, the city's municipal code did not explicitly address short term rentals according to BuildYourBnb. The ban came after complaints increased during the pandemic about the impact on housing stock and neighborhood nuisance according to The LA Times.

Reactions among hosts on sites like Reddit and BiggerPockets has been negative but resigned. "I hope a permitting system can be implemented so my parents can have the income" said one resident Dagart Allison per Voice of OC. The city council has indicated they may revisit regulating short term rentals in the future.

In summary, short term rentals are currently banned in Costa Mesa due to November 2021 ordinance. No permits or taxes apply since the practice is prohibited. The city has vowed to revisit drafting potential regulations at some point.

Starting a Short Term Rental Business in Costa Mesa

Unfortunately, the city of Costa Mesa has instituted a complete ban on short term rentals within city limits as of November 2021. This prohibition covers all short term rental activities, including rentals listed on platforms like Airbnb, VRBO, and more. Even hosted home sharing arrangements are now illegal per the urgent ordinance passed by the city council.

Clearly this presents a major roadblock to anyone hoping to operate or start a short term rental business in Costa Mesa at this time. With hefty fines up to $1000 per day possible for violations, along with potential criminal charges, the risks associated with attempting to skirt the law are too high for most hosts and investors.

For those set on finding a way to legally participate in the short term rental market in Costa Mesa, the only real option is to stay closely tuned to city politics. The council has indicated they may revisit implementing a permitting and regulation system rather than keeping an outright ban in the future. Attending city meetings, writing to council members, or joining local home sharing advocacy groups can help influence future policy shifts.

Barring any changes though, Costa Mesa's strict enforcement and zero tolerance approach to short term rentals keeps this income stream off limits. With nearby cities like Newport Beach taking a more balanced regulatory stance, options exist to operate in compliance with the law a short drive away. But hosts passionate about keeping holiday renters in Costa Mesa itself currently have no easy path forward. The city's urgent ordinance decisively slams the door on short term rental businesses within its borders for the foreseeable future.

Short Term Rental Licensing Requirement in Costa Mesa

Costa Mesa has instituted a complete prohibition on short term rentals within city limits. This ban was enacted through the passage of Ordinance 2021-17 by the Costa Mesa City Council on November 2, 2021.

The ordinance defines a short term rental (STR) as the rental of any residential property for less than 31 days. It covers rentals facilitated through hosting platforms such as Airbnb and VRBO as well as direct bookings.Key details of the STR licensing requirements under the new law:

• No licenses or permits will be issued for the operation of short term rentals in residential zones across Costa Mesa. This applies to entire home rentals as well as shared spaces.
• The ban restricts property owners, residents, landlords, tenants, and other parties from advertising, booking or facilitating stays under 31 days.
• Limited exemptions exist for certain owner-adjacent home sharing but these are still subject to restrictions. Owner-adjacent means the host lives on-site at the property during the rental period.
• Those found to violate the prohibition are subject to escalating fines of up to $1000 per day as well as potential criminal charges.

In summary, Costa Mesa has instituted one of the strictest policies in California by completely banning short term rental licensing.

The city views uncontrolled STR growth as a threat to long term housing availability and neighborhood quality of life.

Required Documents for Costa Mesa Short Term Rentals

Unfortunately, with the citywide prohibition on short term rentals in Costa Mesa, there are currently no documents required to operate them.However, if regulations change in the future, potential short term rental hosts should be prepared with proper documentation.

This may include:

Business License

If short term rentals become legalized, Costa Mesa may require hosts obtain a business license to operate. These are typically obtained through the city finance or revenue division by submitting an application and paying a licensing fee. Annual renewal may be necessary.

Transient Occupancy Registration

California requires anyone renting a space for less than 30 days to register for a Transient Occupancy Tax Certificate. This may involve submitting an application, contact details, rental property address, and number of rental units. There is typically no cost associated with registration.

Safety Inspections

The city could mandate safety inspections by the fire and building departments before approving a short term rental. This may check for things like smoke detectors, fire extinguishers, emergency escape routes, electrical issues, and building code compliance. Annual re-inspections may be part of an STR permit program.

Proof of Insurance

Liability insurance tailored to short term rentals may be required by Costa Mesa. Minimum policy amounts could be set by ordinance. Insurance certificates listing the city as an interested party may need to be submitted before an STR permit is issued.

Of course all of the above remains speculative given the current prohibition. But anticipating these requirements can help hosts planning for the possibility of legal short term rentals in Costa Mesa someday.

Costa Mesa Short Term Rental Taxes

As of November 2021, short term rentals of any kind are prohibited in Costa Mesa per Ordinance 2021-17. This citywide ban means there are currently no taxes or fees specifically related to short term rental activities.

However, the Costa Mesa City Council has indicated they may revisit a permitting system in the future that could allow certain types of short term rentals to operate legally. If regulations are updated to allow any short term rental operations, hosts would likely need to pay transient occupancy taxes, tourism business improvement district assessments, and potentially other fees.

For example, if Costa Mesa followed the model of other California cities, legal short term rental hosts could pay:

• Transient Occupancy Tax (TOT) - This is a tax paid per night on all bookings, usually around 10-15% of the rental rate. TOT helps fund infrastructure, public services, tourism promotion and more in the city.
• Tourism Business Improvement District (TBID) Assessment - This additional fee (around 1-3% of rent) goes specifically to promote tourism and market the city as a destination.
• Permit Fees - An annual fee may be required to register and get a short term rental permit. This helps cover administration and enforcement costs related to the program.
• Fines for Violations - Hosts not following all regulations could face fines around $1000 per day.

However, as it stands today, short term rental hosts cannot legally operate in Costa Mesa. All bookings are prohibited. The City Council has pledged to revisit potential permitting rules in the future, but they are not in place at this time. Any taxes or fees would depend on if and how they update the regulations.

California wide Short Term Rental Rules

California has implemented statewide regulations that apply to short term rentals across cities and counties. These rules serve as a baseline that local municipalities can build upon with their own ordinances.

Registration and Tax Requirements

• Hosts must register with California and obtain a Transient Occupancy Registration Certificate (TORC) to legally collect taxes on short term rental income. This applies in any city, even those with separate licensing programs.
• The TORC comes with a requirement to collect and remit transient occupancy taxes. Rates vary by area, generally 9-14% of rental revenue.

Safety Rules All short term rental units in California must contain:

• Smoke detectors in each bedroom
• Carbon monoxide detectors if the unit contains fuel-burning appliances
• Fire extinguishers
• A fire escape route posted in a visible location
• Operational phone service with emergency numbers posted

In addition, pools and outdoor spas must have safety fencing with self-closing gates.These measures intend to protect guest safety. However, local fire marshals generally need to sign off on compliance. With some cities banning short term rentals entirely, enforcement of the statewide requirements remains inconsistent.

Home Sharing Allowance

If the host lives on-site throughout the rental stay, the activity typically falls under "home sharing" exemptions in local short term rental laws.

Home sharing enables more flexible rules around licensing and length of stay caps. However, all other regulations like guest safety and taxes still apply.

Does Costa Mesa strictly enforce STR rules?

Costa Mesa takes an uncompromising stance when it comes to enforcing the citywide prohibition on short term rentals (STRs). The ban, enacted in November 2021 through Ordinance 2021-17, makes operating any type of STR within city limits illegal. This applies to rentals listed on platforms like Airbnb, VRBO, and more.

The city rigorously cracks down on violations in order to uphold the law. Code enforcement utilizes tips submitted through the MYCOSTAMESA portal to identify and investigate illegal listings. Fines can amount to $1000 per day for those caught flouting the rules. Costa Mesa also reserves the right to pursue further actions like criminal charges or nuisance abatement procedures.

Initial warnings may be issued to give hosts a chance to cease operations. However, the city shows little leniency for repeat offenders. Code enforcement officers can continuously monitor and cite hosts to apply mounting financial penalties.

Costa Mesa makes no apologies for this strict enforcement, seeing it as vital to meet the original goals of the STR prohibition. These include freeing up housing stock and preventing neighborhood disruptions linked to transient guests and party houses.

How to Start a Short Term Rental Business in Costa Mesa?

Unfortunately, short term rental businesses cannot currently operate legally in Costa Mesa due to a citywide ban that went into effect November 2021. However, for those interested in exploring options, here are some steps to consider:

1. Thoroughly research current city regulations related to short term rentals. Costa Mesa Municipal Code Chapter 13 prohibits all short term rentals, defined as rentals less than 30 days in length. Review the ordinance text to understand the rules.

2. Consider legal alternatives like home sharing if you plan to live on site. The ordinance has an exemption for hosted home sharing where the owner resides in the dwelling. However, there are still restrictions to understand.

3. Contact the Costa Mesa Community Improvement Division to discuss options and seek an exception or variance if you have a unique situation. While unlikely, explain why you should be granted permission to operate a short term rental legally.

4. If planning to operate a short term rental illegally, carefully analyze the risks and potential consequences. Fines can be up to $1000 per day. The city also may pursue criminal charges or nuisance abatement. Consult a lawyer to understand liability.

5. Monitor city council meetings and agendas for any updates related to short term rental regulations. The council has indicated interest in exploring options for legal short term rentals through a permitting system. Stay informed on the latest developments.

6. Consider involving yourself in local government processes by speaking up at meetings or talking to leaders. Advocate for regulations that allow responsible short term rental owners to operate legally.

While short term rental businesses cannot operate in Costa Mesa today, there may be opportunities in the future if regulations evolve. Stay engaged, understand the risks, and explore alternatives in the meantime.

Who to contact in Costa Mesa about Short Term Rental Regulations and Zoning?

Costa Mesa Community Improvement Division Code Enforcement
Phone: (714) 754-5638

What do Airbnb hosts in Costa Mesa on Reddit and Bigger Pockets think about local regulations?

The hosts on these sites seem unhappy but resigned to the ban on short term rentals in Costa Mesa:

Reddit user u/BeachCityAirbnb commented:
"This sucks for me as I just bought a small condo to Airbnb. I hope the city can come up with reasonable regulations rather than an outright ban.

"On BiggerPockets, user InvestorCM wrote:
"The Costa Mesa ban leaves me scrambling for options with my recent purchase.

I planned on using Airbnb income to cover the mortgage."While unhappy with the outright ban, most hosts seem to hope regulations can be revisited in the future.