If you’re evaluating South Bay real estate with short-term rental income in mind, Manhattan Beach and Hermosa Beach have very different regulatory pictures. Neither city allows Airbnb or VRBO city-wide — both restrict STVRs to specific zones — but the rules, costs, and opportunities are distinct.
Here’s the honest comparison.
The Key Difference Upfront
Manhattan Beach: STVRs are allowed in the Coastal Zone (primarily the Sand Section, west of approximately Highland Avenue). Outside the Coastal Zone — Tree Section, Hill Section, East MB — short-term rentals are banned. No specific city “permit” is required; operators need a city business license and must collect and remit 14% TOT.
Hermosa Beach: STVRs are allowed only in designated commercial zones (C-2, C-3, SPA 7, SPA 8, SPA 11) on properties with existing nonconforming residential units — primarily in the Pier/downtown area and certain commercial corridors. A city STVR permit is required ($2,173 initial, $1,880 annually).
Side-by-Side Comparison
| Manhattan Beach | Hermosa Beach | |
|---|---|---|
| Where allowed | Coastal Zone only (Sand Section) | C-2, C-3, SPA 7, SPA 8, SPA 11 zones only |
| What triggers eligibility | Property must be within Coastal Zone | Must be nonconforming residential unit in commercial zone, established by Oct 24, 2019 |
| City permit required | No separate permit — business license only | Yes — STVR permit required |
| Initial cost | Business license fee (based on gross receipts) | $2,173 STVR permit application |
| Annual cost | Business license renewal (gross receipts basis) | $1,880 renewal |
| TOT rate | 14% (effective July 1, 2023) | 14% (effective January 1, 2020, Measure H) |
| 1st violation fine | Not publicly specified | $5,000 |
| 2nd violation fine | Not publicly specified | $10,000 |
| 3rd+ violation fine | Not publicly specified | $20,000 per occurrence |
| Enforcement approach | Code enforcement + neighbor complaints | Proactive monitoring contract + Go Hermosa app + code enforcement |
What This Means in Practice
For Sand Section property owners in Manhattan Beach
If you own in the Coastal Zone — which covers most of the Sand Section — you have a legitimate STVR option without going through a separate permit process. The business license requirement is straightforward (apply through Revenue Services at manhattanbeach.hdlgov.com), and the 14% TOT is collected from guests and remitted to the city quarterly.
The caveat: Sand Section lots are small, homes are close together, and neighbors notice. Operating a clean, well-managed rental is table stakes. The city’s code enforcement is active, and neighbor complaints travel fast in a community this dense.
For Hermosa Beach property owners
The zone restriction is more limiting than many people realize. Being in Hermosa Beach — or even in the Hermosa Sand Section — does not automatically make your property eligible for an STVR permit. You need to be in a C-2, C-3, SPA 7, SPA 8, or SPA 11 zone, and your residential unit must have been legally established by October 24, 2019 as a nonconforming use.
The properties that typically qualify are residential units located within or above commercial properties in the Pier/downtown area — not typical single-family homes on residential streets.
The fines for operating without a permit in Hermosa Beach are substantial: $5,000 for a first violation, with each advertisement posted counting as a separate occurrence.
For investors
Neither city offers a simple, city-wide STVR environment. Both require zone eligibility before anything else. If you’re specifically seeking a property with strong STVR income potential, the due diligence step — confirm zone eligibility before writing an offer — is non-negotiable.
The strongest STVR opportunities in the South Bay exist where zone eligibility, proximity to the beach, and walkability overlap. In Manhattan Beach, that’s the Coastal Zone Sand Section near Downtown and the Pier. In Hermosa Beach, that’s commercial-zone properties in the Pier/downtown area.
The Broader Investment Picture
For buyers who want rental income but aren’t specifically targeting short-term rentals, the long-term rental market in both cities is robust. Executives on corporate leases, families in MBUSD or Hermosa’s school district on multi-year rentals, and remote workers seeking beach access all create sustained demand. Neither city’s STVR restrictions change the long-term rental picture.
For ADU income — which is a separate conversation — see the Hermosa Beach ADU guide and Manhattan Beach ADU guide. ADUs are long-term rentals by default, don’t require STVR permits, and may make more financial sense for many owners.
Let’s Run Your Specific Scenario
Important: City regulations change. Before listing or buying with rental income in mind, verify current requirements directly with the relevant city — Manhattan Beach Planning at (310) 802-5520 or Hermosa Beach Community Development at 310-318-0235. This guide is informational — the city has final say on what’s allowed for your specific property.
If you’re evaluating a property with STVR income as part of the picture, confirming zone eligibility is the first step — and it needs to happen before you write an offer. The city planning departments can confirm eligibility for any specific parcel: Manhattan Beach Planning at (310) 802-5520 and Hermosa Beach Community Development at 310-318-0235. I can help you know what to ask and connect you with the right people.
Cecilia Agraz | Stroyke Properties Group
310-803-9338 | cecilia@manhattanhermosahomes.com
DRE #01974999
Also reading: Short-Term Rentals in Manhattan Beach | Short-Term Rentals in Hermosa Beach | Manhattan Beach for Real Estate Investors
Cecilia Agraz
South Bay neighbor and Realtor® focused on clear guidance and low‑stress moves in Manhattan Beach & Hermosa Beach.