Solvang’s Planning Commission on Monday unanimously backed a proposal to overhaul the city’s short-term rental policies.

The draft ordinance, now headed to the City Council for final consideration, originated from a council directive in March 2025 to strengthen oversight and tighten guidelines on where and how STRs can operate in Solvang. 

Presenting to the commission, Community Development Director Rafael Castillo said the city’s current ordinance, which was codified in 2016, was “built to run on autopilot” and relied too heavily on operator self-reporting.

“Since that time frame … there’s been a lot of technology and platform changes, and that’s really outpaced our existing regulations,” he said.

Castillo told commissioners that the largely “hands-off” approach left the city without meaningful safeguards or enforcement mechanisms, and led to a proliferation of illegal listings operating without permits or failing to pay the city’s transient occupancy tax. The TOT, also known as bed tax, is levied on hotels, motels and short-term rentals.

In late 2025, staff used software to run what Castillo called a “dragnet,” flagging 25 unpermitted properties across various platforms. Property owners were told they had no path forward to obtain permits in their current zones and were given seven days to take down their listings. If they complied, the city would not pursue the collection of potentially thousands of dollars in back taxes.

Castillo said that all of the listings were removed by mid-December.

Much of Monday’s meeting focused on refining the ordinance’s language to improve clarity and ensure it could be easily understood by the public. Commissioners emphasized the need for consistent terminology throughout the document, particularly around the definition of short-term rentals and the distinction between overnight and daytime guests.

Planning Commission chair Jack Williams raised concerns about long-term oversight and proposed a recurring inspection requirement to ensure that basic safety standards were upheld over time. In response, the commission amended the draft to include a mandatory life-safety inspection every five years as part of the renewal process.

After reviewing the updated language and confirming the final set of revisions, the commission voted 5-0 to recommend the ordinance to the City Council.

Commissioner William Zigler said he was glad to see the city taking action, “especially with the great need that we have for housing in our community.”

Key Changes Proposed

Permit Cap and Location Limits

Short-term rental permits would be capped at 40 citywide. New permits could only be issued within Solvang’s Village Mixed-Use zone, which encompasses much of the city’s downtown commercial corridor along Mission Drive. Existing STRs in R-3 residential zones could continue operating until the property is sold and the permit would be non-transferable.

Safety Inspections

The ordinance would require a life-safety inspection for all new STR permits, with mandatory follow-ups every five years. Inspections would verify basic features such as working smoke and carbon monoxide detectors, which the city currently does not confirm, according to Castillo.

Existing permit holders would not be exempt. Their current permits would automatically expire 180 days after adoption, and owners would need to reapply and pass inspection to continue operating.

Renewal and Enforcement

Permits would need to be renewed annually, and operators must demonstrate at least 30 separate stays per year to qualify. The ordinance would include a three-strike rule for enforcement, allowing the city to revoke permits after repeated violations. Once revoked, the property would be ineligible for a new permit for two years. Operators must also designate a 24/7 local contact able to respond to complaints within one hour.

Restrictions on Eligible Properties

The ordinance would prohibit short-term rentals in accessory dwelling units (ADUs); SB 9 two-unit projects; and homes with affordable housing covenants.

Platform Reporting and Compliance

Under a new California law, Senate Bill 346 requires short-term rental platforms such as Airbnb and VRBO to submit monthly reports to the city listing the addresses of all advertised rentals and any other identifying information the city requires. The law also allows tax audits and requires listings to display valid permit numbers, giving Solvang stronger enforcement tools.