City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01007 6/24/2025
Regulation Changes: Short-term Rentals
File ID: 2025-01007
Location: Citywide
Recommendation: Review, discuss, and provide direction to the Interim City Manager on preparing an ordinance amending City Code Chapter 5.114 related to Short-Term Rentals.
Contact: Jackie Rice, Revenue Manager, (916) 808-5844, [email protected]; Peter Coletto, Director of Finance, (916) 808-5416, [email protected]; Bryan Howard, Program Manager, (916) 808-4847, [email protected]; Department of Finance Presenter: Jackie Rice, Revenue Manager, (916) 808-5844, [email protected]; Peter Coletto, Director of Finance, (916) 808-5416, [email protected]; Department of Finance
Attachments:
1-Description/Analysis
Description/Analysis
Issue Detail: The City’s short-term rental (STR) ordinance was adopted in January 2016 and created Chapter 5.114 of the Sacramento City Code. Aside from some minor code amendments, to enhance enforcement and collection of applicable district assessments, most of what was enacted in 2016 remains in effect today. Based on the experience of the program to date, staff is seeking direction on potential amendments with a goal of standardizing regulatory practice for primary residences, limiting complaints associated with STRs, and preserving or increasing the City’s supply of long-term rental units.
Primary versus Non-Primary Residence
Currently, STR permittees renting out their primary residence have no maximum on the number of rental days allowed per year. Permittees renting out property that is not their primary residence are limited to 90 rental days during the life of the annual permit. An increasingly high percentage of STR applications are for the rental of non-primary residences. Many of these applicants are purchasing properties for the purpose of using them solely for STRs. The table below illustrates these increases.
Year Permits
Issued
%
Increase
Primary
Residences
% Primary
Residences
Non-Primary
Residences
% Non-
Primary
Residence
2018 53 41 77% 12 23%
2019 271 411% 217 80% 54 20%
2020 282 4% 213 76% 69 24%
2021 420 49% 282 67% 138 33%
2022 506 20% 302 60% 204 40%
2023 583 15% 281 48% 302 52%
2024 547 -6% 223 41% 324 59%
2025 (YTD) 83 33 40% 50 60%
Note: 2025 (YTD) is through 03/28/2025
File ID: 2025-01007 6/24/2025
Year Permits
Issued
%
Increase
Primary
Residences
% Primary
Residences
Non-Primary
Residences
% Non-
Primary
Residence
2018 53 41 77% 12 23%
2019 271 411% 217 80% 54 20%
2020 282 4% 213 76% 69 24%
2021 420 49% 282 67% 138 33%
2022 506 20% 302 60% 204 40%
2023 583 15% 281 48% 302 52%
2024 547 -6% 223 41% 324 59%
2025 (YTD) 83 33 40% 50 60%
Note: 2025 (YTD) is through 03/28/2025
Complaints regarding the STR program are fielded by staff throughout the City. The most common complaints are regarding properties operating without a permit as well as complaints regarding noise and undesired traffic. The chart below depicts the reports in fiscal year 2024 from the community regarding STRs as reported to 311.
.
To prevent the purchase of residential properties for the sole purpose of running a permanent STR business, as well as to reduce the disruptive nature of non-primary residence STRs, staff recommend removing the option for applicants to rent out properties that are not their primary residence. This is in alignment with nearby jurisdictions and ensures that the program strikes the right balance between allowing property owners to supplement their income and maintaining the integrity and safety of our community. Additionally, staff recommend that STR permits only be granted to the property owner.
The City often receives STR permit applications from applicants who enter into long-term leases to
File ID: 2025-01007 6/24/2025
occupy properties who then update their personal information to satisfy the burden of proof for primary residence. In some cases, these applicants are not actually living there, and are utilizing the leased property as a full-time STR. Issuing permits only to property owners prevents this from occurring. Finally, to ensure applicants are only renting out primary residences, staff recommend only allowing one STR permit per permittee.
Accessory Dwelling Units (ADUs)
In the summer of 2023, staff began tracking the structure type used for STR. Since then, staff have seen an increase in STR applications received for ADUs. There were 16 STR permits issued for ADUs in the second half of 2023 and 52 STR permits were issued for ADUs in 2024. Because STR permits are issued by dwelling unit, and an ADU is a separate dwelling unit from the main unit, the applicant cannot claim the ADU as their primary residence and is limited to 90 days of rental during the permit term. As such, property owners with a dwelling unit separate from the main dwelling are treated differently than someone who converts living space within their home. Staff have received complaints from permittees and applicants that constructed an ADU with the intent to use it as an STR, allowing them to recover the costs of the ADU and to ensure an additional source of income in the future. To resolve this issue, staff recommends that City Code be amended so that an ADU is considered the primary residence of the applicant.
Multi-Unit Dwelling Properties
Existing zoning standards classify STRs, when located in multi-unit dwelling buildings, as a “Hotel/Motel” land use. Depending upon a property’s zoning district, an STR located in these building types is either subject to a Conditional Use Permit or not allowed. If the Committee elects to proceed with the property ownership and primary residence requirements outlined above, multi-unit dwelling buildings will not be eligible for STR unless they are condominium units where room(s) are rented rather than the entire unit. Excluding rental apartments from use as STRs is consistent the City’s Housing Element goals and policies to provide affordable housing opportunities. For this point and others raised in this report, the Community Development Department would concurrently prepare amendments to Title 17 (Planning & Development) of the City Code to ensure consistency with Chapter 5.114.
Online Hosting Platforms
The majority of STRs are advertised on online hosting platforms such as AirBnb and VRBO.
Currently, the code requires these platforms to keep and preserve all records deemed necessary to determine the amount of the Transient Occupancy Tax (TOT) they are liable to collect and remit to the City, and the City shall have the right to inspect at all reasonable times. Staff recommends the code be amended to require hosting platforms to provide to the City, on a regular basis, the following information for any listings within the City of Sacramento: permit number; name of responsible party; street address of the rental; and the number of days booked within the reporting period. This will allow the City to reduce the number of STR properties operating without a permit.
Other Enforcement Measures
To promote adherence to the STR code, staff also recommend that the code more clearly state the due dates of registries to be provided by hosts as follows:
a. January through March, due April 30 th;
b. April through June, due July 31 st;
c. July through September, due October 31 st; and
st
File ID: 2025-01007 6/24/2025
d. October through December, due January 31 st.
Additionally, staff recommend that residency be established by no less than 60 days prior to application for a STR permit. This ensures that proper documentation is available to validate the primary residence of the applicant.
Policy Considerations: Housing Element Goal 3 (Promoting Accessory Dwelling Units) states, “Facilitate the construction of at least 600 accessory dwelling units by 2029.” One effective strategy to increase the supply of affordable housing is facilitating the construction of accessory dwelling units (ADUs). Existing regulations allow ADUs to be used for lodging purposes rather than housing.
Economic Impacts: None
Environmental Considerations: This action is not a “project” subject to CEQA because it involves administrative matters and will not result in new physical development, direct changes to the physical environment, and any reasonably foreseeable indirect physical change in the environment. (CEQA Guidelines § 15378(b)(5).)
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: The proposed changes would simplify enforcement of the STR program and would alleviate the issues that lead to most complaints related to the STR program.
These changes are in alignment with nearby jurisdictions and allow for income supplementation for property owners, while maintaining the integrity of neighborhoods.
Financial Considerations: While the total revenue from STR permits will drop, the permit fee is designed to recover the costs of the program. As such, the cost to administer the program will also decrease, resulting in no new net cost for the program.
Local Business Enterprise (LBE): None. Page 4 of 4