Commercial Real Estate in La Honda: Village Center Zoning, Rural Resource Lands and Use Permits

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

La Honda is a small unincorporated mountain town on La Honda Road (Highway 84) in the Santa Cruz Mountains, between Woodside and the San Mateo coast. Its commercial property is a short list: the village center along La Honda Road, with a grocery, post office and a few service and food businesses, plus scattered rural parcels where the County allows farming, recreation, small wineries and lodging by use permit. Every commercial use here runs through San Mateo County permits, on-site septic and small private water systems. Confirm the zoning and service details for each parcel with County Planning and Building.

Who controls the parcel

La Honda is not a city. San Mateo County zones it under Title 8, the Zoning and Development Code. Use permits for village businesses are heard by the County’s Zoning Hearing Officer.

Several other reviewers also weigh in. A November 20, 2025 County staff report on a La Honda Road restaurant proposal shows the usual list:

Building Inspection and the Drainage Section
Environmental Health Services, for septic
the San Mateo County Fire Department
the state Division of Drinking Water, which regulates the center’s public water system
state Alcohol Beverage Control, for any liquor license

That report also states that the village center parcel is outside the Coastal Zone. Parcels farther west toward San Gregorio may be inside it, so check each parcel.

La Honda zoning for commercial and rural business use

District	Intended uses	Notes
H-1 Limited Highway Frontage	Roadside commercial: retail, restaurants, offices, lodging and service stations	Most uses by use permit. Crop farming by right. Housing by use permit. Applied at the village center with an S density district
RM Resource Management	Open space, agriculture, homes and resource uses	Restaurants, lodging, clubs, commercial recreation and small wineries by use permit. 36 ft. Development Review Permit required
TPZ Timberland Preserve and PAD Planned Agricultural	Timber and agricultural lands	Chapters 8.142 and 8.106 (not reviewed); confirm on the zoning map
Home occupations	Small home businesses	Permitted in RM as an accessory use

The village center and the H-1 district

The County’s staff report describes the La Honda Center parcel at 8865 La Honda Road. The 2.5-acre site is zoned H-1 with an S density district and designated Neighborhood Commercial in the General Plan. It holds a separate grocery building and a multi-tenant building with a post office, a dental office and a former market space, with upstairs residential space. The report reviewed a use permit and parking exception to turn the former market into a restaurant and wine bar. We have not confirmed the hearing outcome, so treat it as an example of how the process works rather than an approved use.

What H-1 allows. Under Chapter 8.60:

By right. Only crop and tree farming and truck gardening.
Use permit. Restaurants, refreshment stands, retail stores, business and professional offices, hotels, inns and auto courts, mobile home parks, nurseries and gas stations. B&B inns need one too, and are allowed only outside the Coastal Zone.
Housing. One-family, two-family and multifamily homes also need a use permit.
Not listed. Bars and nightclubs.

A use permit can set conditions on site area, parking and architecture.

Signs and yards. Business signs are capped at 100 square feet per face and 150 square feet total unless a use permit allows more. Freestanding signs need a use permit. Side yards are at least 5 feet and rear yards 20 feet unless the zoning map says otherwise, and front yards come from the S district or map.

Parking. The restaurant proposal needed an off-street parking exception because the shared lot could not meet the code count. Expect parking to limit any change of use in the center.

Rural business uses under RM

Much of the land around La Honda carries rural districts. In RM, agriculture, farm product sales, nurseries, grazing, homes, public recreation and home occupations are permitted.

Use permit uses.

hotels, motels and restaurants
churches, schools and private clubs
commercial recreation such as stables, golf courses and campgrounds
research facilities and veterinary hospitals

Small wineries. A winery needs a use permit and is capped each year at 10,000 gallons of storage, 5,000 gallons of fermentation and 2,500 cases bottled. Retail sales are limited to wine made on site.

Timber. Commercial timber harvesting is restricted within 1,000 feet of homes that existed on June 18, 1991.

Review. Most RM development needs a Development Review Permit. The Health Officer confirms water supply and sewage disposal, the County Engineer reviews roads, drainage and grading, and fire authorities recommend protection measures. Height is three stories or 36 feet, with 50-foot front and 20-foot side and rear yards.

La Honda Road, septic and water

Scenic corridor. The village center is in the La Honda Road County Scenic Corridor, which can bring added design and sign review.
Water. The center is served by its own small public water system regulated by the state Division of Drinking Water. Rural parcels typically rely on wells or small systems, so confirm the source, its permits and its capacity.
Septic. Businesses use on-site septic systems approved by County Environmental Health, and septic capacity often caps how many seats or rooms a use can have.
Fire. The San Mateo County Fire Department sets conditions on address signs, exits, Knox boxes, extinguishers and kitchen hoods for commercial occupancies.
Lodging tax. Inns and short-term rentals register for transient occupancy tax through the County’s contractor, HdL.

Transfer tax, business tax and property tax

The San Mateo County Assessor-County Clerk-Recorder collects documentary transfer tax at 55 cents per $500, or $1.10 per $1,000, at recording. La Honda has no city tax. Assumed liens may be deducted, and exempt transfers need a transfer tax affidavit. We did not verify a County business license tax. A sale generally triggers Proposition 13 reassessment.

Due diligence that matters in La Honda

Start with our commercial due diligence checklist, then add:

Confirm the base and S districts on the County zoning map and whether the parcel is in the Coastal Zone.
Pull every use permit and parking exception for the building.
Get water system permits and septic records, and test capacity for any intensified use.
Check scenic corridor sign and design limits.
For a winery or lodging use on rural land, confirm the use permit limits and Development Review Permit status.
Confirm road access and fire conditions for customer traffic.

Questions people ask

What is the zoning at the La Honda village center?

The County staff report lists the La Honda Center parcel as H-1 with an S density district and a Neighborhood Commercial General Plan designation.

Can I open a restaurant in La Honda?

Restaurants need a use permit in H-1 and RM, plus Environmental Health, fire and, for alcohol, state ABC approvals.

Is La Honda in the Coastal Zone?

The County says the village center parcel is not. Some rural parcels toward the coast may be, so check each one.

Can I run a small winery near La Honda?

In RM, with a use permit, up to 10,000 gallons of storage, 5,000 gallons of fermentation and 2,500 cases a year, selling only wine made on site.

What limits a La Honda business most?

Usually septic capacity, water supply and parking.

Is there a local transfer tax?

No city tax; the County rate is $1.10 per $1,000.

Does Diamond handle commercial property in La Honda?

Contact Matthew Martinez to discuss buying, selling or leasing commercial property in La Honda.

Sources & notes

Note: The staff report lists the zoning as both H-1/S-10 and H-1/S-1; confirm with the County. We did not review the zoning map, the TPZ and PAD chapters, the scenic corridor rules or the outcome of the 2025 use permit hearing.

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

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