Rules for short-term rentals depend on which side of the city line the property sits. Inside Chico, the city's code treats stays under 31 days as hotel stays for Transient Occupancy Tax. In unincorporated Butte County, an administrative permit is required. Confirm the rules for the exact address with the city or county before you make an offer, because they can change.
I am not an attorney, and I am not giving legal or tax advice. This is what the public sources I could verify say, plus a checklist of what to confirm. If a property is being sold "as a short-term rental," do not assume the right to operate transfers to you.
What counts as a short-term rental in Chico?
Chico's municipal code defines a "transient" as someone who occupies a place for fewer than 31 consecutive calendar days. In the code's transient occupancy tax chapter, a short-term home-sharing or vacation rental unit under 31 days falls under the definition of "hotel" (Chico Municipal Code Section 3.52.030). Home-sharing means a unit is shared in whole or in part. A vacation rental means the unit is used exclusively for occupancy.
The City Council made that change in 2018 so the city could collect Transient Occupancy Tax (TOT) on these rentals. A November 2023 news report cited a city staff count of roughly 300 short-term rental spaces in Chico.
What do I need to confirm with the City of Chico?
I could not verify the city's permit, zoning, or registration rules from an official source while writing this, so I am not going to state them. Before you buy a Chico home to use as a short-term rental, ask the City of Chico directly:
- Is a permit or registration required for this address, and is the existing one transferable to a new owner?
- Does zoning allow the use at this address?
- What is the current TOT rate, and how and when is it reported and paid?
- Do owner-occupancy, parking, or occupancy limits apply?
- Are there fire, safety, or inspection requirements?
Get the answers in writing, and ask the seller for any existing registration and TOT filing history.
What does Butte County require outside city limits?
Butte County adopted a short-term rental ordinance (Ordinance No. 4159) on March 26, 2019, effective April 25, 2019. For the unincorporated county, the county's page says:
- Short-term rentals require an administrative permit from the Department of Development Services.
- The county cannot process permits inside the incorporated cities of Oroville, Chico, Paradise, Biggs, or Gridley.
- The unit must meet current California Building Code and "R" occupancy standards. It needs a building permit unless it was built before 1962, in which case Assessor field notes are required. Recreational vehicles, yurts, tents and similar structures are not allowed.
- Units cannot be in the Very Low Density Country Residential zone.
- In most cases the owner must show they live on the property, with two forms of ID.
- Every rental needs a local property manager available 24 hours a day during rental periods. Neighbors can call that manager first, and the manager must respond within 30 minutes.
The county's ordinance has been under review. A zoning code amendment for short-term rentals is listed in a state environmental filing as ZCA25-0005, so check the county's current page before relying on any of the above.
What should I check before offering on a short-term rental property?
- Permit status. Ask for the permit or registration, and ask the city or county whether it transfers.
- Income history. Ask for platform statements and TOT filings. Do not rely on projections from a listing.
- Financing. Some lenders treat short-term rental income differently from a long-term lease. See DSCR loans explained.
- Taxes. Property tax after a sale is reassessed, and short-term rental income has tax rules of its own. See property taxes after closing and talk to a tax professional.
- Insurance. Standard homeowners policies often exclude short-term rental use. Ask an insurance agent before you close.
- HOA rules. Many associations restrict rentals. Read the documents, starting with HOA basics.
- Fire zone. A property in a mapped fire zone can affect insurance cost and availability. See the wildfire and fire zone guide.
General information, not legal, tax or financial advice. Rules change and vary by address. Confirm with the City of Chico or Butte County, an attorney, and a tax professional.
Frequently Asked Questions
Can I run a short-term rental in Chico?
It depends on the address and the city's current rules. Chico treats stays under 31 days as hotel stays for the transient occupancy tax, but confirm permit, zoning, and registration requirements with the City of Chico for the specific property before you buy.
Does a short-term rental permit transfer when a house sells?
Do not assume it does. Ask the city or county in writing whether the permit or registration transfers to a new owner, and make your offer contingent on the answer if it matters to your plan.
What does Butte County require for a short-term rental outside Chico?
An administrative permit from the county's Development Services department, a building that meets current code, a local property manager reachable 24 hours a day, and in most cases proof that the owner lives on the property. Check the county's page for the current rules.
Does the county's short-term rental permit apply inside Chico city limits?
No. The county says it cannot process permits inside the incorporated cities of Oroville, Chico, Paradise, Biggs, or Gridley.
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