AB 942: What You Need to Know About California’s Push to Regulate Short-Term Rentals

There’s a wave coming. If you’re a property owner, investor, or REALTOR® in California, now is the time to position yourself ahead of it.

Assembly Bill 942 (AB 942) is moving through Sacramento. While the language is legislative, the impact is personal. Whether you're operating a short-term rental, evaluating investment strategies, or advising clients on long-term value, this bill should be on your radar.

Let’s break down what it is, why it matters, and what you should be doing now.

What Is AB 942?

AB 942 is a proposed California law that would give cities and counties the clear authority to regulate or prohibit short-term rentals (STRs) in residential zones. This includes platforms like Airbnb, Vrbo, and similar services.

Local governments already have some control over STRs, but the rules are inconsistent. This bill would remove gray areas and make it easier for cities to take action, particularly in places facing housing shortages or affordability issues.

This conversation isn't just about tourism. It's about housing availability, local control, and the future of property use in the state.

Why This Matters

Short-term rentals have become a powerful wealth-building tool for many homeowners and investors. But policymakers and community advocates are raising concerns. They argue that STRs reduce the number of homes available for long-term residents, increase rents, and change the fabric of neighborhoods.

AB 942 is a clear signal. Local governments are being positioned to take stronger, more decisive action.

If passed, your city could:

• Prohibit STRs in residential zones

• Enforce limits on the number of rental days per year

• Require registration, permitting, or compliance audits

This could significantly change how investment strategies perform in certain markets.

Strategy Over Scramble: What You Should Be Doing Now

As a strategic real estate advisor, I recommend the following:

1. Audit Your Assets

Review all properties being used as STRs. Are they in residential zones? If so, find out what your city’s current position is and what actions they might take if this bill becomes law.

2. Build a Transition Plan

If your STR model becomes restricted, you don’t want to be left without a backup. Consider shifting to mid-term rentals. These 30-day-plus leases can appeal to corporate relocators, travel nurses, or families between moves.

3. Educate Your Clients

If you're representing buyers who are basing their offers on STR income potential, make sure they understand the landscape is shifting. Sellers who have relied on STR revenue to justify pricing should also be informed. This is your chance to add value and build trust.

4. Think Long-Term

Markets that support long-term renters will continue to perform. If you're holding property, look beyond quick wins and refocus on sustainable returns. Timing is key, and so is knowing when to adapt.

Where Things Stand

AB 942 has not been signed into law yet, but it is gaining traction. Many California lawmakers are signaling strong support for returning regulatory power to local governments. Even if the bill stalls this year, it reflects a growing trend across the state.

This is not just a moment. It’s a movement.

Pro-Tip: Be Early, Not Reactive

The best real estate professionals and investors know how to read the market before it shifts. AB 942 is your early indicator. You don’t need to panic, but you do need a plan.

If you’re ready to align your strategy with what’s coming next, I’m here to help. Let’s get ahead of it together.

📩 Email me at [email protected] or visit arielledixon.com to schedule a consult.

Christie’s global reach. Sereno’s local strength. My strategy in your corner.