City Council takes steps toward short-term rental ordinance

By Michael Chaldu · Thu Feb 26 2026

Lengthy discussion at Tuesday meeting touches on noise, parking, economic impact, and enforcement

ATASCADERO — In a lengthy discussion during its Tuesday, Feb. 24, meeting — one from which two councilmembers recused themselves, but then spoke as citizens in public comment — the Atascadero City Council laid the groundwork for a potential city ordinance regulation short-term rentals in the city.

According to the report for Item H1, a Management Report on the City Council action plan adopted in 2024 included a program to evaluate short-term rentals (STRs) and the potential for new regulations. There are currently no Municipal Code standards pertaining to STRs, although the city requires a business license and registration to pay Transient Occupancy Tax (TOT) in order to operate a short-term rental from a residential property. Tuesday's discussion was to give direction to staff to develop an ordinance regulating the STRs, which refers mostly to private residences being rented out to vacationers for short stays.

City Councilmembers Seth Peek and Heather Newsom both recused themselves from the discussion as councilmembers, citing conflicts of interest as current or previous owners of STRs, but both spoke during public comment for the item.

In introducing the discussion, Community Development Director Phil Dunsmore put concerns about STRs and an ordinance in three categories: concentration and impacts to housing stock, noise and parking, and accountability to owners and tenants.

Dunsmore also pointed out a city ordinance would be required for the city to use SB 346, which allows a city to obtain information such as addresses and parcel numbers from STR platforms.

During council questions, Mayor Pro Tem Mark Dariz said his biggest concerns was multi-family structures, like an apartment building, being used solely for STRs.

"A bunch of STRs clustered around permanent residents could be a problem," he said. "It could also hamper our efforts to establish workforce housing."

Mayor Charles Bourbeau agreed somewhat, but thought the bigger concern was houses being used only as STRs.

"That leaves houses that are not available to residents, not available for a move-up home for a young family," Bourbeau said. "The other concern is that a home only for rental is essentially a hotel in a residential area — the neighbors didn’t sign up for that."

Meanwhile, Councilmember Susan Funk mentioned another factor with short-term residents: fire safety.

"We're a high-fire risk area, and when we let people come in as renters, they’re less familiar with the conditions," she said, mentioning they might try and create fire pits where they're not allowed. "Vacationers are less aware of consequences and that raises risk. We need to be attentive to that."

Funk mentioned to Atascadero Fire Chief Casey Bryson that the city could put in regulations to limit open fires and allow gas or propane devices for barbecues; Bryson replied that he'd be OK with that.

During public comment, Newsom and Peek spoke as city residents who have operated STRs.

"I know what it takes to operate [an STR] and co-exist as neighbors," Newsom said. "We should have the right to do what we want with property, and I'd rather deal with STRs than having to evict long-term rentals. The fees should be reasonable, also; it's too costly for resident STR owners."

Peek said he and his wife rented out a room in their home to help pay the mortgage, although he does not do that anymore. He said operating STRs are fine as long as it's done within policy, but he said addressing multi-family structures isn't necessary right now after staff research revealed that there are only two properties in town that fit the category.

"Creating policy for multi-family with no issues is policy for policy’s sake," he said.

There were 10 people in total who spoke at public comment. Many were fine with STRs as long as there was an owner on site and rules were followed, although a few were opposed.

Atascadero resident Tori Keen said there is already a shortage of housing for long-term residents, and that STRs aren't as much of a boon to the economy as some think.

"Somebody at a Planning Commission workshop said STR brings meaningful business, but most of the operators highlight Paso Robles wine country and the area's beaches, but not Atascadero," she said. "They stay in Atascadero and then spend their money elsewhere.

The STR owners make the money, but the city bears the brunt."

Atascadero resident Tom Florian was one who brought up the pitfalls of STR tenants affecting the neighborhood.

"I'm an unhappy neighbor of an STR, and I know many with same concerns," he said. "This place has a pool 50 feet from my bedroom, and young adults go out partying, and go into pool late at night, keeping me up. Complaints made to people who rent it out, but it stops there and nothing happens."

Going back to council, Funk said that there would definitely be a need for an ordinance to regulate STRs, and also suggesting potential exemptions for those "managing life situations," alluding to Peek's example of helping pay a mortgage or moving in a loved one because they need more constant medical care.

Bourbeau agreed with Funk, although he asked if a required inspection for every STR should be required. "If there's a problem, we can deal with it then," he said.

However, Dariz and Funk both said inspections should be required for someone who wanted an STR permit.

"If we wait until it becomes a problem, then we’re too late," Funk said. "We have to be the ones to set the policy."

After directions were established to look at mandatory inspections, fire safety outreach, and a ban on street parking, Dunsmore said staff had plenty to go on for a draft ordinance, and one would be presented at a future meeting.

The City Council will next meet on Tuesday, March 10, at 6 p.m.