Hermosa Beach Short-Term Rental Permits: How Many the City Allows and What One Costs

Published August 10, 2026

Hermosa Beach caps short-term rentals by geography, not by a permit number. Roughly 212 properties qualify, only about nine hold permits, and the whole program sunsets on October 24, 2027.

The short answer

Hermosa Beach sets no numeric cap on short-term rental permits. It caps eligibility by geography instead. Only about 212 nonconforming residential dwellings on commercially zoned land qualify, and as of the September 2025 council hearing only nine held a permit. A permit runs roughly $1,500 a year, plus a business license and the city's 14 percent transient occupancy tax.

Last verified: August 10, 2026

Why the number is 212 and not a quota

The city banned short-term vacation rentals in all residential zones in 2016. Council adopted Ordinance No. 16-1365 on May 24, 2016, and the prohibition lives in Hermosa Beach Municipal Code section 17.42.180. It covers offering, renting, and advertising any stay under 30 days.

Three years later the city opened a narrow pilot. It allows short-term vacation rentals only where a residential dwelling sits on land zoned C-2, C-3, SPA 7, SPA 8, or SPA 11. Those are legal nonconforming homes, mostly downtown and strung along Pacific Coast Highway and Aviation Boulevard. The city counts about 212 of them.

So the practical ceiling is 212. There is no lottery, no waiting list, and no first-come cutoff. If your property is one of the 212 you can apply. If it is not, no fee gets you in.

Take-up has been thin

At the September 9, 2025 public hearing, nine of the 212 had actually pulled a permit. That gap is the real story of this program. Owners who could operate legally mostly have not bothered, while a much larger group of residential-zone owners has been renting short term without a permit at all.

What it costs

There are three separate costs, and owners routinely budget for only the first.

The annual permit. Reporting around the 2025 extension put the annual short-term vacation rental permit at $1,500. Other coverage cites $1,589. Permit fees are set by the city's adopted fee schedule and get revised, so confirm the current fee with Hermosa Beach Community Development before you underwrite anything.

A city business license. Operating a short-term rental is operating a business in Hermosa Beach. The license is separate from the permit and separately renewable.

Transient occupancy tax at 14 percent. Under Hermosa Beach Municipal Code section 3.32.030, every transient owes 14 percent of the rent charged. You collect it, you remit it. Platform collection agreements do not transfer the legal duty away from the operator, so verify what your platform actually remits on your behalf.

The coastal zone complication

In Koerner v. City of Hermosa Beach, a Los Angeles Superior Court held the blanket ban unenforceable inside the coastal zone. The reasoning was that banning short-term rentals changes the intensity of use of coastal land, which makes it "development" under the California Coastal Act, and the city never obtained a coastal development permit or Coastal Commission approval through its Local Coastal Program. The city chose not to appeal.

The result is a split map. Outside the coastal zone the 2016 residential ban still stands. Inside the coastal zone the city cannot enforce it unless and until the Coastal Commission signs off.

That is a legal posture, not a license. The city responded by launching a registration and tax portal and telling all operators to register, get a business license, and pay transient occupancy tax back to May 2022. Local coverage estimated 180 to 250 unlicensed operators and about $5 million in back tax, in the range of $20,000 to $70,000 per owner. The city offered to waive retroactive interest and penalties for owners who registered and paid by August 1, 2026. That window has closed. Anyone still unregistered should assume interest, penalties, and fines are on the table.

The 2027 sunset is the fact that changes the math

Ordinance No. ORD-25-1489, adopted September 30, 2025, amended section 17.42.180.D and extended the pilot by two years. The sunset language is blunt. The provisions become inoperative and are considered repealed on October 24, 2027 unless council enacts a new ordinance before that date. No new permits and no renewals issue after October 24, 2027, and no permitted rental has a right to operate past the term of its permit.

This is the fourth extension. Council has renewed every time so far. It has also never made the program permanent.

If you are buying a property for short-term rental income in Hermosa Beach, that revenue has a stated expiration date about fourteen months out. Underwrite the long-term rent, then treat short-term upside as a bonus that may not renew.

FAQ

Can I short-term rent my house in a residential zone in Hermosa Beach?

Not under the ordinance. Section 17.42.180 prohibits it citywide in residential zones. The Koerner ruling blocks enforcement inside the coastal zone, but the ban remains on the books, registration and tax obligations still apply, and the enforcement picture can change if the Coastal Commission acts.

Is there a cap on how many permits the city will issue?

No numeric cap. The limit is that only around 212 nonconforming dwellings on C-2, C-3, SPA 7, SPA 8, and SPA 11 land are eligible in the first place.

Do I owe transient occupancy tax if I never had a permit?

Yes. The tax attaches to the stay, not to the permit. The city has pursued unpermitted operators for tax back to May 2022 under section 3.32.030.

What happens to my permit in October 2027?

If council does not extend again, the program is repealed on October 24, 2027, no renewals issue, and permitted operation ends with the permit term.

Does a 30-day-plus lease avoid all of this?

Yes. The rules apply to stays under 30 days. A conventional lease of 30 days or longer is not a short-term vacation rental, though other state and local landlord-tenant rules then apply.

Before you act

This article is general information about local ordinances, not legal, tax, or accounting advice, and it is not a substitute for a licensed professional. Ordinance text, fee schedules, and enforcement posture change. Confirm current requirements directly with Hermosa Beach Community Development and the Finance Department, and consult a California real estate attorney or CPA before committing to a short-term rental strategy.

Topics: short-term rentals, Hermosa Beach, permits, transient occupancy tax, South Bay, compliance, property management

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