If you own a vacation rental on the California coast, or you’re thinking about buying one, California SB 1318 short-term rentals bill may be the most important piece of legislation you’ll read about this year. SB 1318 represents a fundamental shift in how California regulates short-term rentals (STRs) in coastal zones. Here’s everything you need to know.
What is California SB 1318?
California SB 1318 is a 2025–2026 legislative session bill formally titled: “Coastal resources: local coastal program: coastal development permit: non-owner-occupied short-term rentals.”
In plain English, the bill would empower local coastal governments to restrict or outright ban non-owner-occupied short-term rentals. Think Airbnb and Vrbo whole-home listings where the property owner doesn’t live on-site, without being blocked by the California Coastal Commission (CCC).
As of May 2026, the California SB 1318 short-term rentals bill passed the Senate Natural Resources and Water Committee (5–1) on April 21, 2026, and is currently set for a hearing on May 11 in the Senate Appropriations Committee. It is still active and working through the legislative process.
Why SB 1318 is a big deal: the Coastal Commission factor
For decades, the CCC has been a backstop against local short-term rental bans. The Commission has repeatedly rejected proposed ordinances from cities like Pismo Beach, Encinitas, Hermosa Beach, San Clemente, and Santa Monica that sought to ban or heavily restrict STRs in coastal zones. The CCC’s long-standing position has been that vacation rentals constitute a form of “visitor-serving” use that promotes public access to the coast, a core mandate of the California Coastal Act of 1976.
SB 1318 would change this dynamic entirely. Under the bill, the CCC would be required to approve a coastal development permit or local coastal program (LCP) amendment that restricts or prohibits non-owner-occupied STRs, provided the following two-part test is met:
- The local agency makes specific findings that the restriction is necessary to address significant local housing needs, and
- The Commission determines the permit or amendment strikes a reasonable balance between local housing needs and public access to the coast.
This is not a blanket rubber stamp, but it does remove the CCC’s ability to simply refuse STR restrictions on the grounds that visitor-serving accommodations must be preserved.
Who does SB 1318 target?
The bill specifically targets non-owner-occupied short-term rentals in the coastal zone:
- Hosted rentals – where the property owner lives on-site and rents a room are not the focus of this bill.
- Whole-home vacation rentals operated by investors or second-home owners who don’t reside on the property are the primary target.
If you live in your coastal home and rent out a guest room, you’re unlikely to be directly affected. If you purchased a coastal investment property purely to operate as a vacation rental, SB 1318 could put your business model at serious risk.
The housing crisis driving SB 1318
This California SB 1318 short-term rentals bill is the product of a years-long tension between California’s housing affordability crisis and the growth of the vacation rental industry. Critics argue whole-home coastal STRs remove long-term housing from the market, displace local workers, and intensify neighborhood impacts like traffic, noise, and parking congestion.
This has already triggered a wave of local restrictions: Santa Ana banned STRs entirely in April 2024; Oceanside capped coastal STRs in June 2024; Monterey County passed sweeping regulations in September 2024 that include residential bans; and Marin County capped unincorporated STRs at 1,200 under a CCC-approved ordinance in April 2024. SB 1318 would makeit far easier for coastal communities that haven’t yet acted to follow suit.
What happens if SB 1318 passes?
- A wave of new local STR restrictions. Many coastal cities have held back due to CCC uncertainty. SB 1318’s passage would likely trigger new ordinances from San Diego to Humboldt County.
- Greater pressure on non-owner-occupied operators. Investors who own coastal vacation rentals without residing on-site would face a significantly clearer legal pathway to restrictions or outright bans.
- A shift in investment calculus. The value proposition of buying coastal property to operate as a vacation rental could change substantially in markets where new restrictions are likely.
- Legal challenges. STR industry groups are expected to contest bans, similar to the Monterey County Vacation Rental Alliance lawsuit against Monterey County’s 2024 ordinance, which alleged constitutional violations.
What SB 1318 does NOT do –It does not ban STRs statewide. It only affects the coastal zone and only empowers local governments to enact restrictions.
It does not affect owner-occupied or hosted rentals. Homeowners renting a room while living on-site are not the target.
It does not automatically ban anything. A city or county must still pass its own ordinance and meet the required findings.
It is not yet law. As of May 2026, the bill is in the Senate Appropriations Committee and has not been signed by the Governor.
What vacation rental owners should do right now
- Monitor the bill’s progress. SB 1318 is set for an Appropriations hearing on May 11, 2026. Track it at leginfo.legislature.ca.gov or CalMatters Digital Democracy.
- Know your local jurisdiction’s stance. Contact your local planning department to understand where your coastal city stands and whether new STR ordinances are being drafted.
- Get involved in public comment. Both the Legislature and local governments accept public testimony. If you operate a coastal STR, your voice matters.
- Consult a real estate or land use attorney. If you own coastal investment property, understand your rights and potential exposure under SB 1318 and forthcoming local ordinances.
- Document your compliance. Permits, TOT registration, and proper disclosures should all be current. Enforcement is tightening across the state.
California SB 1318 Short-Term Rentals & the Broader STR Landscape in 2026
SB 346 (2025) Now requires platforms like Airbnb and Vrbo to collect and remit transient occupancy taxes (TOT) directly to local governments.
Los Angeles Home-Sharing Ordinance limits whole-home rentals to 120 nights/year and requires primary-residence status. City Attorney’s office has aggressively enforced compliance.
San Francisco Caps unhosted rentals at 90 nights per year and requires permanent-resident status for registration.
South Lake Tahoe New ordinance effective July 2025 (after Measure T was struck down in court) sets buffer zones, permit rules, and occupancy limits.
California SB 1318 short-term rentals legislation is not the end of coastal vacation rentals — but it could be the beginning of their significant contraction in many communities. For hosts who live in and share their homes, the impact may be minimal. For investors operating non-owner-occupied vacation rentals along California’s coast, the window for business-as-usual may be closing. Stay informed, stay compliant, and get legal counsel before making major investment decisions in California’s coastal vacation rental market. Our San Diego vacation rental management team can help you navigate these changes.