Daily Regulatory Notes 10/27/2025
Cities address STRs. Palm Springs, CA votes to keep cap; Saratoga Springs, NY discusses 2026 financial strategy; Hilton Head, SC approves rules; Athens, OH reviews enforcement; Santa Barbara, CA revisits tax policy; New Franklin, OH; Salida, CO; Riverside, AL; Saratoga, WY; Holly, MI. READ MORE.
The Palm Springs City Council has voted to keep its 36-contract cap for older short-term rentals, scrapping a scheduled cut to 26 contracts that was set for 2025.
Rentals permitted after November 2022 will remain limited to 26 contracts per year. City staff noted that overall STR numbers are declining, with most properties averaging fewer than a dozen contracts annually. Supporters of the higher cap said lowering it would hurt tourism and tax revenue, while some residents urged tighter restrictions to protect housing supply.
At its latest budget workshop, Saratoga Springs officials identified short-term rental revenue as a key element of their 2026 financial strategy amid rising pension and insurance costs.
Finance Commissioner Moran said around 1,200 STRs operate in the city, with licensing, inspections, and related taxes potentially generating $2.1–$2.8 million annually. The city’s dashboard currently tracks over 1,000 active addresses, and the registry would formalize compliance under a law adopted earlier this year. Broader proposals include fee increases for outdoor dining, events, and parking to help offset escalating fixed costs.
Hilton Head’s long-awaited short-term rental ordinance is now law after receiving final approval Tuesday, setting new fire safety and parking standards but excluding the controversial occupancy caps.
The updated rules require detectors, fire extinguishers, and other safety measures for all rental homes, along with limits on parking to six vehicles on-site. The majority, however, opted to delay any occupancy discussion until after a new land management ordinance is complete. STR operators must comply by May 2026, or May 2027 for recently renewed permits, as town officials also consider increasing the current $250 permit fee to better cover program costs.
Athens officials say the city’s short-term rental activity remains limited and largely stable, with only 33 permitted listings—most of them owner-occupied homes.
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During an Oct. 21 briefing to the Affordable Housing Commission, BZA Chair Rob Delich said roughly 14 properties, or about 1.4% of the city’s 5,500-unit rental market, appear to have shifted from long-term to short-term use. Delich said the city has not approved any non-owner-occupied STRs in R-1 zones, the most restrictive category.
Santa Barbara officials are revisiting local tax policy with short-term rentals in the mix. At an Oct. 21 Finance Committee meeting, members unanimously backed raising the cannabis tax to 20% and debated how to adjust the city’s Transient Occupancy Tax (TOT), which covers hotels and short-term rentals.
Committee Member Wendy Santamaria said any increase should target STRs rather than hotels, noting it could discourage short-term stays and free up housing for residents. Recommendations from the discussion will go to the full City Council for consideration in the coming months.
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New Franklin City Council is moving forward with proposed rules for short-term rentals after holding a first reading on Oct. 15 that drew pushback from residents.
The draft ordinance would require hosts to obtain annual permits, designate a contact person living within 10 miles of the property, and follow rules on noise, trash, events, and parking. Distance requirements between STRs—once part of the proposal—were removed, with Councilman Devin Allman calling them “overreaching.” The measure advances to a second reading on Nov. 5, as Mayor Paul Adamson said the city will consult legal counsel on potential challenges tied to banning STRs outright.
Salida’s debate over short-term rental residency rules returned to the spotlight Oct. 21, as city council members clashed over whether to repeal the local ownership requirement.
Councilmember Dominique Naccarato opposed the repeal, saying the rule helps preserve homes for residents and prevents absentee ownership in a market where “nine out of ten Salidans cannot afford a home.” Others, including Councilmember Suzanne Fontana, said allowing more outside owners could strengthen local revenue and tourism. The issue heads to a second reading and public hearing on Nov. 4, following a 5–1 vote. Council also repealed zoning for the 5H annexation to avoid a costly special election and finalized the 2026 budget, redirecting funds toward arts and community programs.
The City of Riverside has enacted a six-month moratorium on new short-term rental licenses while officials assess local impacts and enforcement needs.
The decision follows resident complaints about noise, parking, and safety in single-family neighborhoods where only a handful of STRs currently operate. Mayor Rusty Jessup said the pause will give staff time to study the issue over the next few months and determine if the city’s rules and business licensing requirements need updating. Existing operators can continue renting during the moratorium, but new applications are suspended unless extended by the council.
Saratoga is weighing whether to formally allow short-term rentals for the first time, with city councilmembers expressing mixed feelings about the potential impacts.
On Oct. 1, the council voted unanimously to send a draft ordinance to the planning commission for a public hearing before bringing it back for approval. The proposal would permit up to 5% of the city’s housing stock—about 575 homes—to operate as short-term rentals, potentially generating $80,000 annually in transient occupancy taxes. The draft also prohibits renting out accessory dwelling units, a rule Mayor Belal Aftab wants reconsidered to help older residents earn income from their properties.
Short-term rental owners in the Village of Holly will now need to register as businesses and renew their licenses annually under a newly amended ordinance approved unanimously by the Village Council.
The updated rules, which cap STR licenses at 50 per year, aim to balance investment opportunities with housing stability for local families. Licenses will be issued on a first-come, first-served basis, and noncompliant operators could face cease-and-desist orders.
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