SANTA CRUZ >> In the name of addressing Santa Cruz County’s ongoing housing crisis, elected county leaders signaled an interest in limiting the number of private homes vacationers can book in unincorporated regions.

The county Board of Supervisors agreed Tuesday to send a comprehensive overhaul of local ordinances managing short-term rentals to its Planning Commission for further refinement, in hopes of getting the new regulations passed back to them for adoption in the not-too-distant future. The changes were put forward by the Short-Term Rental Ad Hoc Committee, Composed of Supervisors Justin Cummings and Manu Koenig, and are primarily concerned with curbing any continued growth of vacation rental properties where the homeowner does not live on-site, also known as unhosted rentals.

While these units make up a relatively small portion of the county’s housing stock, Cummings and Koenig said they take up space that could otherwise provide those in need of housing with secure, long-term options. Unlike hosted rentals, which are currently limited to 250 countywide, there is no limit to permitted unhosted rentals in unincorporated regions outside of three zones covering the Live Oak, Seacliff, Aptos, La Selva, Davenport and Swanton regions.

The framework from Koenig and Cummings advises a cap of 270 unhosted rentals within the county’s jurisdiction, which was arrived at based on the county’s current permitted total of 263 plus seven more with applications still pending, according to the staff report.

“We are in a housing crisis. We are the most expensive rental market relative to income in the country,” said Koenig during a presentation at Tuesday’s meeting. “There’s just been an increasing erosion of single-family homes that can sometimes house multiple students or multiple tenants of any kind, and those getting converted into short-term rentals.”

In addition to limiting the total number of vacation rental permits, the recommendations shared by the ad hoc committee include requirements that hosting platforms, such as Airbnb and Vrbo, remove illegal rentals or face penalties, establishment of a hotline where reports against noncompliant short-term rentals can be shared and limited density in overburdened neighborhoods. The recommendations also include protections for long-term renters by mandating that landlords compensate evicted tenants if they convert their unit into a vacation rental.

Both Koenig and Cummings reassured the community that no one currently in possession of a vacation rental permit will have it revoked; the proposed code amendments are only meant to prevent unchecked growth. However, the committee did recommend that beginning Jan. 1, 2026, the total number of non-hosted permits will be reduced annually by 10 over a five-year period only if unused permits are available.

“While this isn’t perfect, it’s a step forward,” said Cummings. “While not everybody is happy with everything, people are happy with various aspects of what we’re proposing and we’re using this really as a starting point for how we can further address the impacts of short-term rentals on our community and preserving our housing stock.”

Although the decision to have the Planning Commission officially begin the legislative process was unanimously supported, Supervisor Kim De Serpa voiced some concerns. Despite her support for the reporting hotline, De Serpa said she worried the 270 cap could have adverse impacts on tourism revenues — one of the county’s two $1 billion industries — in the face of a potential economic downturn.

“I’m concerned about the loss of income to our county,” said De Serpa. “Especially with the threat of losing our federal funding in many ways. It’s going to be a very difficult time, so I think the timing is not the greatest.”

If a short-term rental permit would require eviction of an existing tenant, under the ad hoc committee’s recommendations, the applicant would be liable to pay the lessee six months of the dwelling’s actual rent at the time of the eviction. De Serpa said this recommendation “seems very punitive.”

Nevertheless, Supervisors Felipe Hernandez and Monica Martinez both stood behind the work of the ad hoc committee.

“It is a balanced approach,” said Hernandez, chair of the board. “I believe it’ll help us with alleviating some of the housing shortage that we’re trying to address.”

The Planning Commission is expected to consider the changes at a meeting later this month or in April. Then, the changes that are OK’d by the commission will come back to the board for at least two public hearings before final adoption. Finally, the ordinance updates will also require review and approval from the California Coastal Commission.