Pacific Grove short-term rental rules: where they are allowed, and what a buyer can count on
Pacific Grove allows whole-home vacation rentals only in its Coastal and Commercial areas, under a citywide cap, and a license does not come with the house when it sells. Here is what the city’s program page and Municipal Code Chapter 7.40 say, and what it means if rental income is part of your plan.
By Jonathan Balog, Broker Associate, Compass · Carmel-by-the-Sea · Facts checked Nov 11, 2026
The short version: Since voters approved Measure M in 2018, Pacific Grove has prohibited short-term rentals (under 30 consecutive days) in residential districts outside the Coastal Zone. New whole-home licenses are only for properties in the Coastal or Commercial zones, must meet a 55-foot zone of exclusion from existing rentals, are capped at 250 citywide, and must be applied for by the owner of record. Home Sharing, renting one room while the owner lives there, is allowed citywide with its own license. A license is not transferred when the property sells.
License cap
STR licenses citywide.
Zone of exclusion
From an existing STR parcel.
Hotel tax
Transient occupancy tax rate.
Transfer on sale
A new owner must apply.
Where short-term rentals are allowed
The short answer: only in the Coastal and Commercial areas, plus Home Sharing anywhere.
What counts
Pacific Grove’s code treats any stay of less than 30 consecutive days for pay as a short-term rental, including rooms and guest houses, attached or detached.
Measure M
The 2018 voter initiative (Ordinance 18-018) prohibited and phased out short-term rentals in residential districts except in the Coastal Zone, with an 18-month sunset for rentals it prohibited. It did not change the rules for home sharing.
Today
The city’s program page says new short-term rentals are only allowed within the city’s Coastal and Commercial areas. It listed 84 active licenses in those areas when checked on Nov 11, 2026.
Check a parcel
The city points owners to its STR map, STR database and pgparcel tool to check the status and location of a rental, and asks owners to contact program staff about eligibility.
City of Pacific Grove STR program ↗Measure M, Ordinance 18-018 (PDF) ↗
What a whole-home STR license takes
From the city’s program page and Chapter 7.40.
Eligibility
The property must be in the Coastal or Commercial zone and meet the 55-foot zone of exclusion when you apply, and the applicant must be the owner of record. Applications are first come, first served. Licenses are one per parcel and capped at 250 citywide.
Fees
The application and neighborhood noticing fee is $141, non-refundable, with another $124 due once a license is issued. Card payments carry a 4% processing fee.
Occupancy
Overnight guests 18 and older are limited to two per bedroom plus one more per site, and daytime guests to 1.5 times the overnight number.
Operating rules
Only the whole dwelling can be rented. Unpermitted spaces cannot be rented, on-site parking must be available to guests, and amplified sound audible beyond the property line, events and rental signs are prohibited. A site manager is required unless the owner manages it and lives within 30 minutes by car.
Taxes and renewal
The transient occupancy tax rate is 12%. Under the code, no license renews automatically: owners renew by March 31 each year with a renewal form, listing links, a safety affidavit and a third-party building inspection report.
Home Sharing: renting a room while you live there
The one form of short-term rental allowed across the whole city.
What it is
The owner or authorized tenant lives at the home and rents one bedroom to up to two adults, with a second bedroom allowed for children on the same contract. There is no cap and no density limit.
Limits
Guests get the bedroom plus shared use of a full bathroom and kitchen. Accessory structures and detached bedrooms cannot be used, and there can be no cooking appliances in bedrooms or bathrooms.
Fees and timing
The application fee is $81, and the annual license is $265, renewed by March 31. The city asks for up to three weeks to review an application, which includes a third-party building inspection on the city’s checklist.
If you are buying in Pacific Grove with rentals in mind
The rules most buyers miss.
The license stays behind
Chapter 7.40 says a license is nontransferable, cannot be assigned and is not transferred on sale or other transfer of the property. A buyer has to apply as the new owner of record, under the cap and the 55-foot rule in effect then.
Zone first
Confirm whether the parcel is in the Coastal or Commercial area before you count on any nightly income. Outside those areas, plan on monthly (30 days or more) or long-term rentals.
Monthly rentals
Stays of 30 consecutive days or more fall outside the short-term rental rules. I co-own Peninsula Luxe, which manages luxury vacation, monthly and long-term rentals on the Monterey Peninsula.
Compare nearby rules
Every town here is different. See Carmel-by-the-Sea rental rules, Pebble Beach short-term rentals, Carmel Valley short-term rentals and Monterey short-term rental rules.
Related guides
Other guides on this site that pair with this one.
Buying with rental income in the plan?
I can check a Pacific Grove parcel’s zoning and rental history and run the numbers on monthly and long-term rents before you write an offer. If you are also weighing Pebble Beach or Carmel-by-the-Sea, the rental rules there are very different, and I can walk you through them side by side.
Pacific Grove homesPebble Beach homesCarmel-by-the-Sea homes
Questions about a specific property?
Call or text 831-747-0310, or book a 30-minute call.
Before you rely on this
- Rules, fees, the license count and the tax rate are from the City of Pacific Grove short-term rental program page and Municipal Code Chapter 7.40 (ecode360), checked Nov 11, 2026. The active license count changes often.
- Measure M details are from the city’s posted copy of Ordinance 18-018. Coastal Zone rules can change through the city’s Local Coastal Program.
- This is general information, not legal advice. Confirm eligibility for any parcel with the city’s program staff at (831) 648-3133.
Pacific Grove short-term rentals: quick questions
Are short-term rentals allowed in Pacific Grove?
Only in limited areas. New whole-home short-term rental licenses are available only for properties in the city’s Coastal or Commercial zones, under a 250 license citywide cap and a 55-foot zone of exclusion. Home Sharing, renting one room while the owner lives on site, is allowed citywide with a license.
What did Measure M do in Pacific Grove?
Approved in 2018 as Ordinance 18-018, it prohibited and phased out short-term rentals in residential districts except in the Coastal Zone, with an 18-month sunset for rentals it prohibited.
Does a Pacific Grove STR license transfer when a home sells?
No. Municipal Code Chapter 7.40 says licenses are nontransferable and are not transferred on sale or other transfer of the property. A new owner must apply.
How much does a Pacific Grove STR license cost?
The application and noticing fee is $141, with another $124 due when the license is issued. Home Sharing has an $81 application fee and a $265 annual license.
What is the hotel tax on Pacific Grove short-term rentals?
The city lists a 12% transient occupancy tax rate.
Can I rent my Pacific Grove home for a month at a time?
Stays of 30 consecutive days or more are outside the short-term rental rules, which cover stays of less than 30 consecutive days.
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