Coastal Cities Stoked the Housing Crisis. Now They’re Blaming Short Term Rentals

SACRAMENTO, CA. — The California Short Term Rental Association (CalSTRA) today released a new research report, How California’s Coastal Cities Manufactured A Housing Crisis, documenting how affluent coastal communities have systematically blocked, delayed, and deterred new housing construction for decades — and are now scapegoating short-term rentals for a crisis of their own making.

California needs approximately 2.5 million more homes to meet its 2023–2031 planning targets. The state is currently producing about 71,000 units per year, or 23% of what state law requires. The report finds that the housing shortage is most severe along the California coast, where four of the five least-affordable counties in the United States were located in early 2026.

The California Coastal Commission's own July 2025 fact sheet reported clearing only 1,900 housing units along the entire 1,100-mile California coastline between 2021 and 2024 — approximately 475 units per year. The  seven coastal communities examined in the reporter — Pacifica, Carmel-by-the-Sea, Del Mar, Encinitas, Montecito, Half Moon Bay, and Oceanside — display a consistent pattern of existing homeowners using available regulatory tools to prevent new housing from being built. Some examples include include a six-year review process for an eight-unit apartment building in Carmel; a 25-year delay in Encinitas that ended with the city converting a site purchased for affordable housing into a park; and Del Mar's more than 60-year record of zero affordable housing units built, which has now drawn intervention from the California Attorney General's office.

“Coastal cities have spent fifty years blocking housing and are now trying to shift the blame to short-term rental hosts,” said Phuong Bui, CalSTRA Leader. “The data is unambiguous: short-term rentals did not cause this crisis, and restricting them will not solve it. The only policy that produces housing is building housing.”

Additional Key Findings

• Short-term rentals are a small fraction of housing stock. Peer-reviewed research finds the median U.S. ZIP code has STR listings equal to roughly 0.21% of housing stock. The Congressional Research Service estimated all U.S. short-term rentals combined account for approximately 1.6% of total housing stock

• Restricting short-term rentals does not produce affordable housing. New York City's Local Law 18 eliminated more than 90% of the city's short-term rental listings after 2023 with no measurable improvement in housing affordability — a conclusion reached independently by the New York Times, the Wall Street Journal, and Habitat Magazine. Santa Monica's whole-home STR restrictions similarly showed no detectable effect on long-term rents.

• Hosts are everyday Californians who depend on the income. A 2023 survey of LA-metro hosts found 62% said hosting income helped them stay in their home and 26% said it helped them avoid foreclosure or eviction. The typical U.S. host earned approximately $15,600 in supplemental income in 2025.

• Short-term rentals are a significant economic engine. In 2023, hosts and guests on a single platform in the LA metro area generated approximately $4.4 billion in economic activity, supported 43,000 jobs, and produced more than $1.2 billion in total tax revenue.

The report concludes that STR ordinances do not solve housing crises. They consolidate lodging in the hands of the hotel industry, remove affordable visitor access to the coast, and transfer costs to working- and middle-class Californians — while allowing the cities responsible for the supply crisis to avoid accountability.