A Ban on Vacation Rentals Impacts Everyone

Myth: Vacation Rentals are the Cause of the Housing Crisis in Santa Cruz

FACT: Out of 23,635+ housing units in Santa Cruz, there are only 288 vacation rentals (over half of which are occupied as a primary residence).   On the other hand, UC Santa Cruz has continued its student population growth over the last decade without adding the needed student housing.  As a result, nearly 50% of all renters in Santa Cruz are UC students, and the UC's growth has continued to put pressure on rental prices.  UCSC has over 8,000 students living off campus in Santa Cruz. Over half of the STRs are owner occupied primary residences, with many others being second homes. The owners want to use their home for their own enjoyment. They will not offer their home as a long-term rental. If they were ever forced to, it would not be “affordable” housing. STRs are generally some of the best houses on the street as required to meet guest expectations. These will never be “affordable.” And with coastal properties are selling for millions, future owners will never offer these these up as “affordable” housing.


FACT: In 2016, Vacation Rentals contributed nearly $1,000,000 in Santa Cruz City taxes plus thousands more in property taxes, parcel and bond taxes for schools.  Vacation Rentals pay for Police Officers, City Programs, Affordable Housing and more.  In 2016 alone, Local Businesses received nearly $18,000,000 by providing sales and services to visitors staying in vacation rentals. 

Vacation Rental Guests spend roughly $200.00 in our local economy for every $100.00 spent in accommodations.   Source:   MCRVA     full report here

Vacation Rental Guests spend roughly $200.00 in our local economy for every $100.00 spent in accommodations. Source: MCRVA  full report here

Myth: Vacation Rentals Do Not Benefit Affordable Housing

FACT: New multi-unit construction in the City must provide 15% affordable units or pay affordable in-lieu fees to the City, which vacation rentals have paid.  Additionally, the City is free to spend the TOT tax revenue from vacation rentals on affordable housing, which is nearly one-million dollars in annual funds that could be allocated to affordable housing solutions.

Myth: If Vacation Rentals are banned, rents would improve.

FACT:  With barely 1% of the housing units in Santa Cruz being used by vacationers, banning vacation rentals would not change the price of rents or availability.  Additionally, of the 288 vacation rentals, over half the rental units are owner occupied, and would not be turned into full-time rentals in the event of a ban. Some of our local officials are casting Vacation Rentals as a “boogie man” to help explain the struggles of our city which has been slow to address a lack of affordable housing. In reality, Santa Cruz cannot solve its housing situation by banning or limiting short-term rentals. The short-term rental inventory pool is just too small.

Myth: Vacation Rentals are New to Santa Cruz and Rapidly growing in numbers

Boardwalk Casino 1901

Boardwalk Casino 1901

FACT: Santa Cruz has long been a tourist destination, and before the advent of the internet, people were coming to Santa Cruz to vacation.  In fact, at one point there were many more homes devoted to vacation rentals than there are now.  The current locals only sentiment ignores the fact that our town was built on tourism, and that tourism is still one of the main drivers of our economy.

Main Beach 1950's

Main Beach 1950's

MYTH: Vacation Rental owners Don't care about the Neighborhood.

 FACT:  STR owners and operators of Santa Cruz include many local residents and managers.  Most STR owners manage their own properties, many living on-site or nearby and have invested significant time, money, and good-old fashion blood, sweat, and tears into their properties.  This alone creates a huge amount of care and concern for the community and their property with each owner.  Plus, the additional money generated from STR TOT actually helps to pay for additional police services to  keep neighborhoods safe. The same reasons that make Santa Cruz a nice place to live also make it an enjoyable place to rent. 

Myth: Vacation rentals increase neighborhood traffic and parking Issues

  • FACT: STRs reduce traffic. First, STRs sit vacant at times with no traffic at all. Second, vacation renters arrive with multiple people per vehicle. The same home, rented long-term, will most likely be at least one car per adult.

MYTH: Long-Term rentals are being converted into vacation rentals pushing people out.

  • FACT: STRs have operated for decades in the County yet properties have NOT been bought to become vacation rentals or small hotels.  A smart investor will not purchase a dwelling for the sole purpose of running it as an STR.   The numbers simply do not work!  Homes are purchased for the owner's personal use (primary residence or second home) and then rented on a short-term basis to generate supplemental income to partially cover costs.