Buying a Vacation Rental Near Carmel-by-the-Sea: Two Governments, One Word, and a Confusion You Need to Resolve First

Two Separate Governments Regulate Short-Term Rentals Here -- Know Which One Covers Your Address

Monterey County's Board of Supervisors passed short-term-rental restrictions for unincorporated residential areas in 2024, reported directly by montereycountynow.com in "A majority of supervisors back ban on short-term rentals in residential areas to thwart a lawsuit" and a companion final-vote piece, and corroborated by avalara's coverage of the same action. That's county-level law, and it governs unincorporated Monterey County land -- places people casually call "Carmel" in conversation, like Carmel Valley and Carmel Highlands, that are not inside any city limits at all.

The incorporated City of Carmel-by-the-Sea -- the roughly one-square-mile village itself -- is a different government entirely, with its own municipal code and its own dedicated "Short-Term Rentals" and "Short-Term Rental Information" pages on the city's own website (ci.carmel.ca.us). The research behind this page confirmed those city pages exist and are actively maintained, but did not read their specific current rule text -- no permit cap, fee amount, or zoning restriction for the city itself is stated here, because none was confirmed.

Here's why this distinction is worth belaboring: at least one property-management blog post found during this research (36northpm.com, "Short Term Rental Ban Finalized in Downtown Carmel, California") uses "Carmel" language in a way that may itself blur city and county jurisdiction -- exactly the kind of secondhand summary that can lead an investor to assume a county rule (or a county exemption) applies to a specific in-city address, or vice versa. Don't resolve that ambiguity by reading one more blog post. Resolve it by calling the City of Carmel-by-the-Sea's own planning department directly, telling them the exact parcel or address you're evaluating, and asking them -- not a county office, not a real estate blog -- whether that specific property falls under city or county STR jurisdiction and what currently applies to it.

What We Can't Tell You: No Confirmed Rental-Income, Occupancy, or Rate Figures

Carmel Realty Company publishes its own quarterly market reports and Sotheby's International Realty maintains a dedicated Monterey Peninsula/Carmel market-update page, so real transaction data exists and is being tracked by name-brand local brokerages. But this research pass did not confirm any specific median price, days-on-market figure, short-term rental occupancy rate, or average daily rate for Carmel-by-the-Sea or the surrounding unincorporated area, and none is invented here.

If a rental-income projection is part of your purchase decision, get it from a property manager who actively operates short-term rentals in the specific jurisdiction -- city or county -- your target property sits in, not from a national aggregator's estimate or a figure repeated on a listing site. A local manager can also tell you, in current terms, whether a given address is even eligible to operate as a short-term rental at all under whichever government's rules apply -- which, per the section above, is not a given.

A Live Administrative Wrinkle: Carmel-by-the-Sea Is Mid-Transition on Street Addresses

Separately from STR policy, the City of Carmel-by-the-Sea is in the middle of a real, currently unfinished transition away from its century-plus tradition of having no numbered street addresses at all -- historically, homes were identified by name and cross-street, and residents picked up mail at the post office rather than receiving home delivery. Multiple 2024-2025 sources (the Washington Post, CBS San Francisco, californiacitynews.org, KION Central Coast, and montereycountynow, which specifically flagged a 2026 target) confirm the city has been actively holding workshops and building an implementation plan to assign street numbers, and the city runs its own live "Street Addresses" project page tracking the effort. No source found in this research confirms whether that numbering process is complete, partially complete, or still pending as of today -- treat it as an active, unresolved transition rather than settled either way.

Why raise this on an investment page rather than just a local-color page: a property's address is exactly the kind of detail that matters for how a listing is set up, verified, and displayed on short-term rental booking platforms. Whether a live renumbering process could plausibly affect how a specific listing's address needs to be entered, confirmed, or updated on a platform is a reasonable, practical question to raise directly with a property manager or the city itself before you list -- not something this page can confirm one way or the other. Treat it as a question to ask, not a confirmed problem to expect.

What This Page Confirmed, What It Didn't, and Who to Call Before You Buy

Confirmed: Monterey County's Board of Supervisors passed short-term-rental restrictions for unincorporated residential areas in 2024; the City of Carmel-by-the-Sea is a separate incorporated government that maintains its own distinct "Short-Term Rentals" and "Short-Term Rental Information" web pages; at least one property-management blog post's "Carmel" framing appears to risk conflating city and county jurisdiction; and the City of Carmel-by-the-Sea is in the middle of a real, multi-year, not-yet-confirmed-complete transition away from its historic no-street-numbers system.

Not confirmed, and not invented here: the City of Carmel-by-the-Sea's own specific current short-term-rental permit caps, fees, or zoning restrictions; any rental-income, occupancy-rate, or average-daily-rate figure for any property in the Carmel area; the current, moment-in-time completion status of the street-address transition; and any specific effect of that transition on how an existing listing displays on a given booking platform. Before buying with short-term rental income in the plan, contact the City of Carmel-by-the-Sea's planning department directly to confirm which government -- city or county -- regulates your specific parcel and what its current rules actually say; get current rental-performance data from a property manager active in that same jurisdiction; ask that manager directly about the address-transition question; and have a California real estate attorney and tax professional review the numbers before you close. Nothing on this page is legal, tax, or investment advice.