New Solvang Rules Tighten Vacation Rental Limits, Add Safety Inspections

The Solvang City Council is moving forward to update the city’s short-term rental (STR) regulations, aiming to strengthen enforcement, enhance safety oversight, and protect housing for long-term residents.

The council voted 5-0 on February 23, 2026, to approve the first reading of the revised ordinance. The update modernizes rules that officials said had not been significantly revised since 2016.

A central feature of the proposal is limiting new short-term rentals primarily to the Village Mixed Use (VMU) district.

Under the updated rules, new vacation rentals would be allowed primarily in the VMU district, a downtown commercial area intended to serve as the city’s tourism hub.

Officials said the change aligns with the city’s 2045 General Plan, which calls for concentrating visitor activity in the commercial core while preserving established residential neighborhoods.

High-density residential zones known as R3 would no longer qualify for new STR permits. Existing operators in those areas may continue operating as non-conforming uses, but their permits would be non-transferable and expire upon the sale or conveyance of the property.

Council members said the ordinance is intended to ensure housing resources remain available for permanent residents. STRs would be prohibited in Accessory Dwelling Units (ADUs), affordable housing units, and properties created through SB 9 lot splits.

Officials said the restriction is designed to prevent developers from using housing incentives for tourism purposes.

The ordinance establishes a citywide cap of 40 STR permits. The city currently has approximately 25 active permits, though that number is expected to drop as two operations are reclassified as hotels. Once the cap is reached, the Community Development Department will manage a digital waiting list for applicants.

The proposed ordinance introduces mandatory safety inspections to ensure compliance with building and fire codes. Rental units must undergo periodic inspections to maintain their permits.

Operational standards would tie occupancy limits directly to bedroom count. Operators must also provide adequate on-site parking and comply with established trash management requirements.

To address neighborhood concerns, operators must designate a local contact capable of responding to complaints within 60 minutes. The city will mail postcards to property owners within 300 feet of a rental, listing contact information and including a QR code for submitting complaints 24 hours a day.

The revised rules grant the city authority to revoke permits in cases of non-compliance. Operators who lose their permits would be barred from reapplying for two years.

The city plans to use new state reporting requirements to obtain data from rental platforms such as Airbnb and VRBO to audit and enforce Transient Occupancy Tax (TOT) payments.

During public comment, some residents expressed concern that limiting rentals to the VMU could shift tourism revenue to nearby communities. Others asked the city to consider allowing owner-occupied “homestays” outside the designated zone.

However, the council agreed to conduct a one-year review of the ordinance and consider adjustments if needed.