Arroyo Grande HOA Guide: Local Rules for Boards and Owners

Arroyo Grande allows two kinds of short-term rental, each with its own permit. A vacation rental is a home rented for less than 30 days while the owner is not living there. A homestay is an owner-occupied home that rents out no more than two rooms.

Both need a Minor Use Permit (Plot Plan Review) and a business license, and both pay transient occupancy tax. Two citations or arrests in 12 months tied to guest behavior can start revocation. Vacation rentals approved before November 11, 2022 still follow the older rules in Ordinance 663.

The PUD rule is the one boards should know first. If your community is a planned unit development, the city’s rules page says a vacation rental is not allowed there, whatever your CC&Rs say. The page does not say the same about homestays, so ask Community Development at (805) 473-5420 how the rules apply to your tract.

Your association can add its own rule on top. California Civil Code section 4741 does not stop an association from prohibiting rentals of 30 days or less.

The city says accessory dwelling units may be permitted in any residential zoning district. An ADU can be detached, attached or a conversion of existing space. A junior ADU is a conversion contained entirely within a single-family home.

• ADUs are approved through the building permit plan review process, and fees are based on the unit’s size and scope of work.
• The City Council adopted updates to its ADU rules on December 9, 2025.
• Arroyo Grande, Atascadero, Grover Beach and Morro Bay used grant funding to create a set of pre-designed ADU plans. Owners who use them can save design time and cost, and plan check is faster.

Inside your association, California Civil Code section 4751 makes void any CC&R provision that effectively prohibits or unreasonably restricts building an ADU or junior ADU on a single-family lot. Your association can still apply reasonable rules, such as architectural review.

The City of Arroyo Grande supplies its own water. Its main source is Lopez Lake, which San Luis Obispo County owns and runs. The city also pumps groundwater from nine wells in the Santa Maria Groundwater Basin and the Pismo Formation. The city holds a 50.55% share of the lake’s Zone 3 entitlement, so it pays that share of the lake’s costs.

The city is not an official State Water Project participant. It can buy State Water only during a locally declared water emergency. When we checked, the city’s Utilities Division page said Measure D-26 on the November 3, 2026 ballot would change this, so check the result with the city.

In August 2024, environmental groups sued the county in federal court, asking for higher releases from Lopez Dam to protect steelhead trout. A December 2024 court order raised releases by about 45%. On December 3, 2025, the Ninth Circuit ruled for the county and the order was vacated. The city says the case continues. It reports more than $1.43 million in unbudgeted costs tied to the case in fiscal year 2024-25, and a water rate study was underway when we checked.

For boards, the practical point is cost. The city says rates are not expected to rise right away, but future adjustments may be needed. Keep an eye on water rate notices when you build the budget.

On March 28, 2023, the City Council rescinded its Stage 1 Water Shortage Emergency, along with the related restrictions and penalties. The city still encourages these practices, but says they are not mandatory:

The city’s irrigation schedule suggests turning systems off in January, February and from mid-November through December, and peaking at about 60 minutes a week for lawns from June through August. Treat these as guidance for your landscape contractor.

• Cash for Grass pays water customers $1.00 per square foot of grass removed. Rebates are limited and first come, first served.
• A $200 rebate is offered for a water-efficient washing machine, after a Public Works inspection.
• A plumbing retrofit program covers toilets, showerheads, aerators and pressure regulators in homes built before 1992.

The rebate pages do not say whether association common areas qualify. Call the Water Conservation Hotline at (805) 473-5487 before you sign a turf contract.

A state law passed in 2023 (AB 1572) bars the use of drinking water on nonfunctional turf in HOA common areas starting January 1, 2029. On owners’ own lots, Civil Code section 4735 prevents an association from banning low-water plants or artificial turf.

The Five Cities Fire Authority runs the weed abatement program for Arroyo Grande and Grover Beach. It says all residential properties, backyards included, must meet its standards. Hazardous fuels must be cleared all year. In 2026, owners had to finish abatement by Monday, June 1.

• Keep weeds and grasses at 4 inches or less, and remove other combustible material.
• On properties under 10 acres, mow or disc a 50-foot break around the perimeter and clear 10 feet from any driveway.
• Keep at least 100 feet of clearance around all structures.
• On slopes of 45 degrees or more, low vegetation more than 50 feet from a structure may stay for erosion control.

If an owner does not comply, the Authority hires a contractor, charges the actual cost plus a 100% administrative fee and records the total as a lien on the property. The County lists the charge on tax bills as AG WEED ABATE-FCFA.

The Fire Authority’s website has fire hazard severity zone maps for Arroyo Grande and Grover Beach, and the city links a 2025 Fire Hazard Severity Map from its fire page. Look up every common-area address, especially slopes and open space.

When a home in a high or very high zone is sold, state law can require the seller to give the buyer documentation of defensible space compliance, or to sign an agreement for the buyer to get it, depending on whether the local agency has an inspection ordinance or offers inspections (Civil Code section 1102.19).

These charges appear on the county property tax bill and are separate from association dues. The County lists three City of Arroyo Grande districts:

If your community is in one of these districts, check your governing documents and the district’s terms before you bid out landscaping, lighting or open-space work, so you do not pay for something the district already covers. Questions go to the city at (805) 473-5432.

The County also lists Flood Control Zone 1 and 1A benefit assessments for the Arroyo Grande area, which fund county flood control work, and the Fire Authority’s weed abatement charge described above.

Your CC&Rs can be stricter than the city about RVs and trailers on lots and driveways, and on private association streets your own rules and state towing law do most of the work.

The city’s noise rules are in chapter 9.16. Section 9.16.030 exempts some activities from the noise standards, but only during set hours:

Outside those windows the chapter’s ordinary noise standards apply. Many associations set shorter hours for their own vendors, so write the hours you want into each contract. We found no gas leaf blower ban in the chapter.

Arroyo Grande’s tree rules are in chapter 12.16, the Community Tree Program. Under section 12.16.070, no one may remove a regulated tree on property used or zoned multifamily residential, mixed use or commercial without a tree removal permit from the city. In single-family zones, the same permit is needed to remove a coast live oak more than 12 inches in diameter (measured 4 feet 6 inches up) or any tree in the public right-of-way. The permit is free, and removing a tree without one is a misdemeanor, with the person responsible paying the city to replace it. A condominium or townhome association should assume its common-area trees need a permit and call the city before any removal.

Your association’s architectural rules can be stricter than the city’s fence limits, but not more permissive. Only a licensed surveyor can establish exact property lines, so ask for a survey before approving a fence on a disputed line.

South County Sanitary Service handles all trash pickup in the city. The city’s SB 1383 page says the state organics law applies to all residents, including apartments and condos, and the city’s code enforcement staff handle SB 1383 education, enforcement and inspection.

The San Luis Obispo County Integrated Waste Management Authority (IWMA) says all multifamily dwellings with five or more units must subscribe to organics collection. Property owners and managers must:

• Give tenants access to enough organic waste containers.
• Educate employees and tenants on sorting every year.
• Give new tenants sorting information within 14 days of moving in.

IWMA offers free indoor collection containers to make sorting easier.