What if a few blocks could change who competes for your home and how much they are willing to pay? In Manhattan Beach, the Coastal Zone does exactly that for short‑term rentals. If you are buying or selling, it is natural to wonder how these rules shape demand and value. In this guide, you will learn where STRs are allowed today, what research says about pricing effects, and the practical steps to protect your plans. Let’s dive in.
Coastal Zone rules at a glance
The California Coastal Act requires coastal cities to have a certified Local Coastal Program, and changes that alter allowed land uses inside that zone must be certified by the California Coastal Commission before they take effect. That certification requirement is a key reason STR rules work differently near the beach in Manhattan Beach. You can read the statutory framework in Public Resources Code Section 30514.
Why Manhattan Beach differs block by block
Between 2015 and 2019, the City adopted ordinances aimed at prohibiting STRs citywide. In 2022, a Court of Appeal decision held those measures could not be enforced in the certified Coastal Zone because they were unapproved amendments to the City’s LCP. The ruling in Keen v. City of Manhattan Beach enjoined enforcement in the Coastal Zone but left the City’s rules intact outside it.
Where STRs are allowed today
According to the City, the STR ban does not apply to properties within the Coastal Zone. STR activity remains banned in residential areas outside the Coastal Zone. Operators where allowed must obtain a City business license and collect and remit the City’s 14% Transient Occupancy Tax (TOT). You can review the City’s guidance on short‑term rentals and the TOT program.
How permissions shape buyer demand
Allowing STRs in the Coastal Zone can attract an extra pool of buyers who value optional STR income. That additional interest can increase competition for Coastal Zone homes, especially near high‑amenity stretches of sand. Outside the zone, a residential STR ban narrows the buyer pool to people focused on primary or traditional long‑term use.
Pricing and rent impacts: what research shows
Large multi‑city research finds that growth in STR listings is associated with higher local rents and home prices. One study estimates that a 1% rise in Airbnb listings is linked to about a 0.018% increase in rents and a 0.026% increase in house prices, mainly from homes shifting from long‑term to short‑term use. See the empirical details in the Marketing Science paper by Barron, Kung, and Proserpio on STR effects.
Results vary by city and enforcement. Stricter regimes, like Santa Monica’s home‑sharing rules, reduced listings, with mixed rent effects by neighborhood. Studies of stronger bans, including Irvine, suggest enforcement can modestly ease rent pressures by returning units to long‑term use. For case‑study context, review analyses of Santa Monica’s ordinance.
What this means for your strategy
If you are buying in the Coastal Zone, the option to operate an STR can factor into value, underwriting, and future exit appeal. If you are selling in the zone, highlighting compliant use and documentation can help you reach investor‑minded and lifestyle buyers. Outside the zone, position your home around primary‑residence use and local lifestyle benefits, since STR income is not part of the equation under current rules.
Due‑diligence checklist for Manhattan Beach
- Confirm if the property is inside the Coastal Zone using the City’s zoning/GIS or by contacting Planning. Start with the City’s STR information page.
- If in the Coastal Zone and you plan to host, verify business‑license steps, TOT registration, and reporting. Include the 14% TOT and platform fees in your projections. See the City’s TOT guidance.
- If outside the Coastal Zone, assume STRs are prohibited in residential areas under current City rules.
- Review HOA rules and CC&Rs. Private restrictions may limit or prohibit STRs even where the City allows them.
- Ask for any code‑enforcement notices, TOT records, and business‑license history tied to the address. Sellers should disclose past STR use and any outstanding items.
- Model conservative income scenarios that reflect policy change risk and occupancy variability.
Policy outlook to watch
Any lasting change to STR rules inside the Coastal Zone will likely require Coastal Commission review and certification, which can include suggested modifications. Track local filings and Commission actions under the Coastal Act framework summarized in Section 30514. Across the coast, cities have tested caps, residency rules, and permit systems, and the Commission has actively shaped outcomes. For a recent regional example, see Monterey County’s cap approach covered by local reporting.
Scenarios to model before you buy
- Permissive STR environment: Coastal Zone STRs continue with standard business‑license and TOT compliance. Expect stronger investor demand near the beach.
- Limited or capped STRs: Registration limits and host requirements reduce listing counts and may temper income assumptions.
- Effective ban or heavy restrictions: Fewer STR conversions and a market that behaves more like a strictly long‑term environment.
Ready to make a confident move in Manhattan Beach? For clear, local guidance tailored to your goals, connect with Janet Chen.
FAQs
What is the Manhattan Beach Coastal Zone and why it matters for STRs
- It is the certified coastal area where changes to land uses require Coastal Commission approval, which is why STR rules there differ from the rest of the city.
Are short‑term rentals currently legal in Manhattan Beach
- The City states STRs are allowed in the Coastal Zone but remain banned in residential areas outside the zone under current rules.
What taxes apply if I host a short‑term rental in the Coastal Zone
- The City lists a 14% Transient Occupancy Tax and requires a business license for STR operators where STRs are allowed.
How do STR rules affect home prices and rents near the beach
- Research links more STR listings to small increases in rents and prices, mainly when homes shift from long‑term to short‑term use.
What should sellers and buyers document about past STR use
- Share or request business‑license records, TOT filings, any code‑enforcement notices, and HOA rules that affect STR eligibility.
