How are the new short-term rental regulations in Newport Beach affecting my property value and rental income?

Newport Beach’s stricter short-term rental (STR) rules — including a 20-unit minimum in coastal zones and permit caps — are reducing income potential for some owners and reshaping property valuations, particularly in coastal neighborhoods.

If you own property in Newport Beach, the short-term rental landscape just changed in a big way. Following Coastal Commission mandates adopted in July 2025, the city has tightened rules on STRs, and these shifts are directly impacting both rental income opportunities and long-term property value.

What Changed in Newport Beach STR Laws

According to the LA Times: - 20-unit minimum in coastal zones: Buildings with fewer than 20 units are no longer eligible for STR permits.
- Permit caps: The city has imposed strict limits on the number of STR permits issued, creating scarcity.
- Enhanced enforcement: Increased monitoring and penalties for unpermitted rentals.

Impact on Property Values

• Single-unit and small multi-unit owners in coastal zones may see reduced value, since STR income is no longer an option.

• Larger complexes that meet the 20-unit threshold could become more valuable, as legal STR permits add to their income-generating potential.

• Buyer perception is shifting — investors are increasingly scrutinizing whether a property is STR- compliant before making offers.

Impact on Rental Income

• Loss of STR revenue is a reality for many small-property owners. Properties once generating strong seasonal returns may now only support long-term rental income.

• Legal STR properties could command higher rental premiums, as demand consolidates into fewer eligible units.

• Owners without permits risk fines or legal action if they continue renting short-term without compliance.

What This Means for Newport Beach Homeowners

If you own property in affected zones: - Reevaluate your income strategy. You may need to transition from STR to long-term leasing.
- Consider resale timing. Properties without STR potential may not command the same premium they once did.

- Market compliance as a feature. If your property qualifies under the new rules, highlight this advantage to buyers or renters.

Bottom Line: Newport Beach’s new STR regulations are reshaping the market. For many owners, property values tied to STR potential are adjusting downward, while larger, compliant properties may benefit from scarcity-driven demand.

👉 Want to understand how these changes impact your property specifically? Connect with Monica Carr, your trusted coastal real estate advisor, for expert guidance on navigating Newport Beach’s evolving short- term rental landscape.