The Big Shift in Big Sur & Carmel Highlands: What You Need to Know About Short-Term Rental Changes
If you’ve been thinking about buying, renting, or investing in a coastal property in Big Sur or Carmel Highlands, this one’s important. Monterey County and the California Coastal Commission just finalized major updates to short-term rental (STR) rules—and they’re going to change the game for a lot of people.
I’ve been keeping a close eye on this, especially since so many of my clients either own homes they rent out or are looking at vacation properties they hope to share on Airbnb or VRBO. So here’s the lowdown—no legal jargon, just what you need to know and what it means moving forward.
What Just Happened?
After years of debate, Monterey County officially updated its coastal rules to tighten control on short-term rentals. The California Coastal Commission signed off on the changes in August, and now they’re heading to the County Board of Supervisors for final adoption.
The biggest change? Commercial short-term rentals (those unhosted, whole-home vacation rentals) will be banned in Big Sur and Carmel Highlands. That means if you own a home in either area that you rent out frequently to visitors, this new rule could force you to stop or seriously adjust your model.
Elsewhere along the coast, they’re capping how many commercial STRs are allowed, while still permitting limited and hosted options.
Breaking It Down: What’s Allowed (and What’s Not)
Here’s how the County is defining vacation rentals now:
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Homestays: You live there full-time and rent out a room or part of the home while you’re present. These are still allowed throughout the coast.
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Limited Vacation Rentals: You can rent your whole home out—but only up to 3 times a year, with each stay under 30 days. These are also allowed everywhere.
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Commercial Vacation Rentals: Whole home, unhosted rentals with no cap on stays—but now totally banned in Big Sur and Carmel Highlands, and strictly capped in other areas.
There will be a total cap of 334 commercial STRs across the Monterey County coastal zone, with each community getting a percentage based on housing stock.
If you’re already operating a commercial rental, there’s a transition period where you might be able to apply for a permit or phase out your operation. But in Big Sur and Carmel Highlands, those operations are being shut down completely over time.
Why the Change?
This has been a long time coming. Supporters of the new rules say the explosion of STRs has:
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Reduced housing availability for locals
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Increased noise, traffic, and trash in residential neighborhoods
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Put extra strain on fragile infrastructure—especially in Big Sur
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Shifted homes from full-time community use to visitor turnover
On the flip side, the new rules still allow you to host guests in your home (or rent your home a few times a year), so you’re not totally blocked from sharing your space or making some income.
But Not Everyone’s Happy About It
A lot of property owners are understandably frustrated. Some rely on STR income to cover property taxes or maintain second homes. Others have invested in upgrades, permits, and STR marketing over the years—only to be told that their business model might not be allowed moving forward.
Some of the common concerns I’ve heard and read include:
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“This will reduce my property’s value—I can’t get STR income anymore.”
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“I may have to sell if I can’t rent it out part-time.”
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“This limits options for families or groups who want to visit Big Sur without staying in a hotel.”
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“It feels like the goalposts keep moving.”
And I get it. This kind of change creates real uncertainty, especially if you’ve built your plan around short-term rental income.
So What Does This Mean for Big Sur and Carmel Highlands Specifically?
This is where the change is most strict. The new rules say:
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No more commercial STRs in either area—period.
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If you’re already doing it, you’ll need to stop or apply to switch to a homestay or limited use model.
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Hosting a guest occasionally or renting a room while you’re home? That’s still allowed.
The logic, according to the County and Coastal Commission, is that Big Sur and Carmel Highlands are too environmentally sensitive—and too limited in terms of water, roads, and infrastructure—to support high visitor turnover from STRs.
Whether or not you agree with that reasoning, this shift is happening—and it will shape how people buy, sell, and use properties in these areas moving forward.
What I’m Watching Moving Forward
Here’s how I think this is going to ripple out:
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Homes with STR permits or rights in other areas may become more valuable—there’s now scarcity built in.
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Investors will look more closely at permitted uses when buying. You’ll want to know what’s allowed before you assume you can rent it out.
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Local tourism might shift—with fewer STRs, travelers may stick to hotels, or shorten stays.
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Some owners may pivot to long-term renting, while others may decide to sell.
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And we may still see challenges to these rules or efforts to modify them over time, especially if enforcement gets tricky.
Final Thoughts
Whether you’re a homeowner, a buyer, or just someone who loves the idea of having a coastal retreat, these changes matter. They impact not just income potential, but also how neighborhoods feel, who can afford to live here, and what kind of tourism our region supports.
If you own property in Big Sur or Carmel Highlands—or you’re thinking about buying and want to understand how these changes could affect your plans—I’d love to help you navigate it all. This is where local insight, permitting knowledge, and a strong strategy really make a difference.
Thinking about making a move or planning your next investment? Let’s connect. I’ll help you find the right fit—whether it’s for full-time living, hosting a few guests, or future-proofing your dream home.
Sources if you want to dig deeper:
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Monterey County Now – Coastal Commission certifies STR rules →
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California Coastal Commission staff report – LCP Amendment →
