Short-Term Rentals in Laguna Beach

Laguna Beach regulates short-term rentals through two sets of rules: a zoning ordinance that decides where they can exist, and a licensing ordinance that decides how they operate. A home bought for rental income needs to clear both. This guide summarizes what the city publishes. It does not promise that any address holds or can obtain a permit, and the city’s pages and staff are the final word.

What counts as a short-term rental

The city defines a short-term rental as the rental of a lodging unit for 30 consecutive days or less. The zoning code also counts a lease of more than 30 days when the tenant sublets the unit for stays of 30 days or less. This guide does not cover rules for longer leases.

An accessory dwelling unit (ADU) cannot be a short-term rental. The city’s planning FAQ answers no to the question and says ADUs are intended to create new housing opportunities for the community.

Where short-term lodging is allowed

The zoning rules sit in Chapter 25.23 of the municipal code. The City Council adopted them, and the California Coastal Commission certified them in 2020. In summary:

• Residential districts: Short-term lodging is no longer allowed in the R-1, R-2 and R-3 districts. A short-term rental that held a permit before the change is legal nonconforming and may continue. The use runs with the land, not with the owner.
• Commercial districts: Short-term lodging is allowed in the LB/P, C-N, C-1 and CH-M zoning districts, and in the CBD-1, CBD-2, CBD Central Bluffs, CBD Office and CBD Visitor Commercial districts of the Downtown Specific Plan, with an Administrative Use Permit. The SLV district requires a Conditional Use Permit.
• Limits: No more than 20 percent of the units in the commercial and mixed-use districts can convert, and the city caps the total at 300 units citywide, counting units approved before October 2020. Properties with five or fewer units can convert one unit. Larger properties can convert up to 20 percent of their units.
• Home-share units: The city’s page lists an additional 165 home-share units in single-family, duplex and triplex homes within the permitted districts. Ask Planning how that allotment applies to a specific address.
• Permit term: New permits are valid for three years and renew every three years.

The city’s page carries a map of the districts where short-term lodging is permitted and a list of approved short-term permits. The list carried a revision date of March 25, 2026 when this page was updated.

Licensing and operating rules

Chapter 5.84 took effect July 1, 2025, and enforcement began October 1, 2025. It sits on top of the zoning rules. An operator needs all of the following:

1. A Short-Term Lodging Unit License, which typically runs up to three years to match the use permit.
2. A city business license, renewed every year. Letting it lapse can lead to revocation of the short-term license.
3. An Administrative or Conditional Use Permit.
4. Transient Occupancy Tax (TOT) registration.

Operating requirements include:

• The license number appears on every advertisement and listing.
• A local contact is available 24 hours a day and can respond to complaints within 60 minutes.
• For new applications, the applicant notifies every residence and business within 200 feet at least 30 days before the license issues.
• The unit holds a posted copy of the nuisance response plan and the city’s Good Neighbor Brochure, and the operator keeps a complaint log.
• The operator collects guest information and a signed rental rules agreement, and the unit complies with occupancy, parking and noise rules.

Online platforms must show the license number on each listing, collect and remit the taxes when they handle payment and remove unlicensed listings when the city directs. Violations can lead to fines, suspension or revocation, and a revoked license cannot be reissued for at least three years.

How the rules have changed

• 2020: The City Council adopted the zoning rules in Chapter 25.23, and the California Coastal Commission certified them.
• July 1, 2025: The licensing ordinance, Chapter 5.84, took effect.
• October 1, 2025: The city began enforcing it.

Two changes in five years mean a seller’s description of the rules may be out of date. Confirm each point with the city.

Taxes

The city requires operators to collect 14 percent on rental revenue: a 12 percent Transient Occupancy Tax and a 2 percent assessment for the Laguna Beach Tourism Marketing District. Operators file TOT reports every quarter, even when no rentals occurred. For your own tax situation, ask a tax professional. The property tax guide covers the county side.

What to check before you buy a home to rent out

1. Confirm the zoning. Ask Planning at (949) 497-0713 which district the parcel sits in, and compare it with the city’s map of permitted districts. The neighborhoods guide describes the setting and housing types of each area.
2. Look for an existing permit. Check the address against the city’s list of approved short-term permits. The city says an existing permitted unit in a residential district may continue as legal nonconforming and that the use runs with the land, so the seller’s paperwork matters. Ask for the permit, the license number, the business license and the TOT registration, and confirm with the city that each is current.
3. Ask about violations. Ask Code Enforcement at (949) 497-0301 whether the city has opened a case. A revoked license cannot be reissued for at least three years, so ask whether any license for the address was ever suspended or revoked.
4. Do not count on an ADU. An accessory dwelling unit cannot serve as a short-term rental, whatever the listing says.
5. Read the HOA documents. Gated and HOA communities carry association rules in addition to the owner’s, so ask for the covenants and any rental restrictions before you commit.
6. Add up the costs. The 14 percent in taxes, the 24-hour local contact, the neighbor notice and the license and permit fees all affect what the unit earns. The cost of living guide covers property tax, insurance and association dues.
7. Check your insurance. Insurers use their own wildfire risk models to decide where they write policies and what they charge. Ask your insurance agent, before you close, whether renting short term changes the coverage.
8. Plan for rule changes. The city adopted its zoning rules in 2020 and its licensing rules in 2025. Build a purchase price that still works if the rules tighten again.
9. Put due diligence in the contract. Ask your agent and an attorney how to build a period for confirming permit and license status into the purchase agreement.

Questions for the seller and the city

Put these to the seller in writing, and confirm each answer with the city:

• Does the property hold a short-term lodging permit, and what is the permit number?
• Is the Short-Term Lodging Unit License current, and when does it expire?
• Are the business license and TOT registration current, and are the quarterly TOT reports filed?
• Has the city received complaints or opened a code enforcement case?
• Do any HOA or condominium documents restrict rentals?
• Which unit on the lot is the rental, and is any part of it an ADU?

Take the zoning questions to Planning at (949) 497-0713 and the compliance questions to Code Enforcement at (949) 497-0301.

If short-term rental is not an option

A lease of more than 30 days falls outside the short-term definition, unless the tenant sublets the unit for stays of 30 days or less. Realatrends lists Laguna Beach leases from the MLS, from annual leases to month-to-month, at the Laguna Beach rentals page. For a purchase decision, talk through the numbers with a broker before you rely on any rental income. Realatrends Real Estate, the publisher of this site, can walk through the options at realatrends.com.

Booking a short-term rental as a guest

The city requires every short-term rental listing to show its city-issued license number, so a listing without one does not meet the requirement. Visit Laguna Beach also lists hotels, bed and breakfasts and guest cottages. The house-hunting trip guide covers how to choose a base.

Where to find the rules

The city’s short-term lodging page summarizes Chapter 25.23 and Chapter 5.84 and links the zoning map and the approved-permits list. Check it again before you make an offer, because the list and the rules change.