Left untouched since 2015, the rules that govern vacation rentals in Solvang are overdue for a makeover, according to the City Council.
In August, the council directed staff to research two separate policy amendments for elected officials to consider moving forward with. One option bans short-term rental use anywhere outside of Solvang’s downtown village district, while the other makes the whole city fair game for property owners who go through a permitting process.
While the city’s current approach limits short-term rentals to the village mixed-use (VMU) zone, staff is aware of several properties outside of the zone attached to periodic listings on Airbnb and similar platforms, Community Development Director Rafael Castillo recently told the council.
“At this juncture, we’ve withheld going after them because we really want to have certainty. Do some of these property owners have a path forward? And if so, we’ll give them the path,” Castillo said at the council’s Sept. 22 meeting. “The biggest question just becomes: Do you want it in all zones or do you want it in VMU? Because I [heard] a little bit from both [sides].”
Councilmember Elizabeth Orona initially voiced support for the citywide expansion option with certain protocols in place, such as a cap on permits the city can grant and fees associated with those permits.
“I genuinely don’t understand why we would say yes to VMU and no to the rest of Solvang,” Elizabeth Orona said. “The revenue opportunity is significant.”
Councilmember Claudia Orona said she felt “pretty strongly” about keeping vacation rentals limited to VMU, partly to reserve residential neighborhood housing opportunities for individuals and families seeking long-term housing.
“It’s really tough to find a place to live in Solvang,” Claudia Orona said. “I don’t feel like even entertaining the idea of having it outside of the mixed-use zone.”
Mayor David Brown said the VMU is the only area he ever wants to see vacation rentals exist.
The council ultimately agreed that staff should maintain the VMU limit while drafting its short-term rental policy revisions, which the council will revisit and vote on at a future public hearing.
Community Development Director Castillo said that staff’s next presentation on the topic will focus on ways—including implementing a minimum stay requirement—for the city to keep better tabs on both properties that operate as short-term rentals without city permission and properties with rental permits that are barely ever used, he explained.
“In some instances, some people get the permit and they don’t use it. They use it maybe once or twice a year and that’s it,” Castillo said. “Is that economically fair? Whereas we’ve given you a permit to run a short-term rental; we expect some TOT [transient occupancy tax] out of this. … Let’s let some other homeowner or property owner get that permit instead.”
This article appears in Sep 25 – Oct 2, 2025.