Commercial Real Estate in Clearlake Oaks: The Plaza, Highway 20 Resort Commercial and County Zoning

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Clearlake Oaks is an unincorporated town on the east arm of Clear Lake, strung along Highway 20 between the lake and the hills. Its commercial property includes the small Plaza district, tourist lodging on Short Street and the lakefront, the Clearlake Keys canal area, and a service commercial strip at the east end of town. Lake County sets the zoning here. Confirm each parcel’s district, the area plan designation and service from the local water district with the county before you plan a use.

Who controls the parcel

There is no city government in Clearlake Oaks. The pieces are:

• Land use: Lake County Community Development applies the county zoning ordinance and the Shoreline Communities Area Plan, which covers both Clearlake Oaks and Lucerne.
• Water and sewer: The Clearlake Oaks County Water District (CLOCWD) runs the town’s water system and treats its own wastewater. Lake LAFCo’s 2010 sanitation service review lists the treatment plant’s design capacity at 2.1 million gallons per maximum day and 0.5 mgd average dry weather. It also notes wet-weather flows reaching 0.813 mgd because of inflow and infiltration. Treated effluent goes to the county sanitation district’s southeast reservoir.
• Fire: The Northshore Fire Protection District covers Clearlake Oaks. Lake LAFCo’s 2025 fire service review lists a $60 Clearlake Oaks fire special tax.

The City of Clearlake begins a few miles south. Its zoning and taxes do not apply here.

Clearlake Oaks zoning for commercial, industrial and resort use

The area plan points to these county districts for the town’s business areas:

The town sits inside a Community Growth Boundary, where the county steers denser development toward existing water and sewer. Most C2 and CR parcels need 8,000 square feet on public water and sewer, 15,000 square feet with one public service, and 40,000 square feet on a well and septic.

The Plaza, Short Street and East Clearlake Oaks

The Shoreline Communities Area Plan gives each part of town its own role:

• The Plaza. This is the town’s commercial heart, meant to serve both residents and visitors. The plan calls for pedestrian-oriented buildings, a shared parking plan and possible housing above shops. It rules out heavy commercial and industrial uses there.
• Short Street. Across Highway 20 from the Plaza, Short Street is meant to keep tourist-supporting businesses. The plan asks that the CR lodging rules be strictly enforced. Buyers of older motels should check unit counts and permit history against the CR thresholds.
• East Clearlake Oaks. Planners want this commercial district diversified, with C3 service commercial uses. Warehousing belongs north of Highway 20, set back from the highway frontage, and service commercial is planned near the existing self-storage facility.
• The Keys and Orchard Shores. Planned Development Commercial covers the sensitive land between these two neighborhoods. Expect a master-plan approach rather than parcel-by-parcel permits.

The plan we reviewed is labeled a 2009 Planning Commission draft. Ask the county which version is in force before relying on any designation.

Lakefront, canals and environmental limits

• The Clearlake Keys. The Keys were built in the 1960s around privately owned, man-made navigable channels. Owners, not the county, must dredge and flush them, and algae affects water quality. A marina, boat-rental or dock-based business there carries those costs.
• Lake levels. Shoreline work is measured against the Rumsey gauge. Plan for dock and shoreline permits on any lakefront parcel.
• Creeks and erosion. The plan notes serious erosion and sedimentation on Schindler Creek. Under the county’s Waterway combining district, new work generally stays 30 feet from perennial streams and 20 feet from intermittent streams.
• Hillside paper lots. The plan warns that building out old lots behind town can cause erosion and drainage problems. Grading and drainage review may affect commercial pads on the slopes.
• Water system upgrades. CLOCWD’s 2026 rehabilitation project covers storage tanks, pipelines, pump stations and the 2.1 mgd water treatment plant at Highway 20 and Island Drive. One goal is adequate fire-flow storage. Ask the district about connection fees and any capacity conditions for a new commercial use.

Home businesses and smaller uses

Many Clearlake Oaks businesses start at home. The county’s Article 27 allows home occupations with up to eight customers a day and ten deliveries a week. On residential lots under an acre, only household members may work in the business. Bed and breakfasts with two guest rooms need only a zoning permit. Inns with three to eight rooms are listed in Table B, and guest stays there are capped at 14 days.

Transfer tax, business tax and property tax

The Lake County Assessor-Recorder fee schedule sets the documentary transfer tax at $1.10 per $1,000. Because Clearlake Oaks is unincorporated, no city transfer tax applies. Lodging pays the county’s 9% transient occupancy tax on stays of 30 days or less. A sale generally triggers Proposition 13 reassessment. Your tax bill will also carry district charges, including the Northshore fire special tax. We did not verify a county business license tax.

Due diligence that matters in Clearlake Oaks

Start with our commercial due diligence checklist, then add:

• Confirm the county district and which part of town the parcel sits in: Plaza, Short Street, East Oaks or Keys.
• Get a will-serve or capacity letter from CLOCWD for water and sewer.
• For motels, count units against the CR tiers of 15, 25 and over 25, and check the TOT history.
• For Keys or lakefront parcels, review channel maintenance obligations and dock permits.
• Check creek setbacks and drainage on hillside or creekside parcels.
• Pull fire district charges and defensible-space requirements.

Questions people ask

Sources & notes

1. Shoreline Communities Area Plan (PC draft, 2009)
2. Lake County Zoning Ordinance: Art. 15 PDC, Art. 17 CR, Art. 19 C2, Art. 20 C3, Art. 27, Art. 37 Waterway
3. Lake LAFCo Municipal Service Review, Lake County Sanitation District (2010)
4. CEQAnet SCH 2026020555, CLOCWD Water Infrastructure Rehabilitation Project
5. Lake LAFCo Fire Protection Districts MSR/SOI (2025)
6. Lake County Assessor-Recorder Schedule of Fees and TOT Ordinance

Note: The C3 and PDC article text was not reviewed in detail. Parcel-level zoning in Clearlake Oaks was not confirmed on the county GIS map.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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