Short-Term Rental

Short-Term Rental Infographic

Overview

The City's regulations of short-term rentals are designed to:

  1. Maintain the long-term rental housing stock in the City.
  2. Provide residents an opportunity to generate income.
  3. Provide visitors to the City another way to experience the local community.
  4. Ensure that such short-term rental activities do not become a nuisance, or threaten the public health, safety or welfare of neighboring properties.
  5. Safeguard the residents of Milpitas by ensuring that short-term rental activities do not threaten the character of residential neighborhoods.
  6. Ensure the collection and payment of Transient Occupancy Taxes ("TOT").

On March 3, 2020 the Milpitas City Council adopted an Ordinance that created the short-term rental (STR) program. You can view the ordinance on the Municode library website.

Contact

  • Questions on Short-Term Rental Operating Standards: For questions on Short-Term Rental regulations or the permit application process, please email Short Term Rentals.
  • Questions on remittance of Transient Occupancy Tax (TOT): call 408-586-3100

Register as a Host

The Short-Term Rental Permit application consists of an online application and the submittal of several supplemental forms. You must complete the supplemental forms prior to initiating the online application. Follow these steps to operate an STR in Milpitas.

You can register as a host on the Online Portal

Qualified Dwelling Unit

A qualified dwelling unit is a structure that the City has legally permitted as habitable space. The table below lists typical examples of some common permitted structures and their eligibility for STR use. Under the City’s STR Program, accessory dwelling units (ADU) may not be operated as STRs. If you are unsure whether your STR is legally permitted as habitable space, please contact the City’s Building Department to confirm before you apply. Your application fee will not be refunded or reimbursed if we discover that you are renting an unqualified structure.

Qualified for STR Use:

  • Single Family Dwelling or portion thereof
  • Individual units in a multi-family property or portion thereof
  • Maid Quarters
  • Apartment or portion thereof

Not Qualified for STR Use:

  • Single-Room-Occupancy (SRO) or dormitory
  • Below-Market-Rate (BMR) or Public Housing unit
  • Commercial and industrial spaces are not permitted
  • Pool houses
  • Sleeping quarters in outdoor areas, including treehouses and vehicles
  • ADUs or Junior ADU

STRs Must Be Noted

You must live in the actual dwelling unit (e.g., apartment, suite, condominium) that you wish to offer as a short-term rental, as either an owner or a tenant. If your property features multiple dwelling units, you may not live in one dwelling unit while operating short-term rentals in a different dwelling unit. This is a core requirement of the City's short-term rental rules intended to preserve long-term housing availability/opportunities and preserve neighborhood character.

  • An Operator may only conduct a Hosted Rental. Unhosted Rentals are prohibited in STRs.
  • If you are a new resident, you must have resided in this specific dwelling for at least 60 consecutive days prior to your application.
  • If you own/rent a multi-unit building, you may only register the specific residential unit (apartment, suite, condominium) in which you reside.

Review Your Agreement

Many private agreements such as leases, homeowner's association bylaws, and Covenants, Conditions and Restrictions (CC&Rs) prohibit subletting (or use of your dwelling unit as a short-term rental). While the City does not enforce these types of private agreements, the Planning Department strongly recommends that you review such agreements before submitting an application.

  • If you are a renter and your dwelling unit is also subject to rent control rules, you may not make more than your monthly rent from short-term rental fees charged in the same month to guests.

Have Property Liability Insurance

You must have property liability insurance in the amount of no less than $500,000 or prove that property liability coverage in an equal or higher amount is being provided by any and all hosting platforms through which you will rent your unit. Proof of liability insurance is not required if hosting activity is only handled by a platform (website) that already extends similar liability coverage.

Resolve Any Code Violations

Ensure that your dwelling unit remains compliant with all Building, Housing, Planning, and other City codes. If your dwelling unit (apartment/suite) is located within an apartment, then the entire property (including other dwelling units) must be compliant and not subject to Code Enforcement.

Fines & Penalties for Illegal Short-Term Rental Housing

If you are not permitted, and you advertise/rent a dwelling unit for periods of less than 30 nights, you are violating the City's short-term rental laws and are subject to possible enforcement action, including substantial penalties

Violations of the City's short-term rental laws are subject to penalties of at least $1000 per day for each dwelling unit in violation. These daily penalties begin on the day that a Notice of Violation is issued by Code Enforcement and continue to accrue until the violation is fully abated. Repeat violations may be subject to escalated penalties and referral to the City's Attorney's Office for additional civil and/or criminal penalties.

Stay Compliant

As a registered host, there are steps and procedures to follow in order to meet compliance, which includes submitting monthly TOT payments and reports

Anyone in Milpitas who receives rent for a stay of fewer than 31 days must collect a 14% tax on the amount that they earn from their guests. This is called the "Transient Occupancy Tax (TOT)".

For hosts that use a platform other than or in addition to Airbnb, please refer to our FAQ section to learn more about calculating TOT and view this TOT Step-by-Step Guide (PDF).

Note: Currently, the only hosting platform that we have a collection agreement with is Airbnb. If you ONLY list your residence on Airbnb you do not need to collect TOT unless you have opted for this in your agreement with Airbnb. Regardless if you list your residence on Airbnb or other hosting platforms, you must still follow the guidelines above to fulfill your reporting obligations on earnings.

Here you can access the TOT Payment Portal for STR.