Commercial Real Estate in San Gregorio: Rural Service Center Rules, Agricultural Permits and Coastal Limits

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

San Gregorio is a small unincorporated village on the San Mateo County South Coast, where Highway 84 from La Honda meets the coast near Highway 1. Commercial property here means a handful of village parcels, ranches and farms with roadstands or processing, and the occasional rural lodging or recreation use, all inside the Coastal Zone and served by private wells and septic systems. The County, not a city, decides what is possible, so confirm the zoning and any permit history with San Mateo County Planning and Building before relying on this page.

Who controls the parcel

San Gregorio has no city government. Land use is governed by Title 8 of the County Code, the Zoning and Development Code, together with the County’s Local Coastal Program. The Board of Supervisors and the Coastal Commission approved the LCP in late 1980, and the County began issuing its own Coastal Development Permits in April 1981. Because the whole area is in the Coastal Zone, nearly any new commercial building, change of use or land division needs a Coastal Development Permit in addition to zoning approval. County Environmental Health reviews wells and septic systems. For countywide rules, see our San Mateo County commercial guide.

San Gregorio zoning for commercial, agricultural and visitor uses

The village and the land around it fall under the County’s rural Coastal Zone districts, plus the LCP’s Rural Service Center policies. The County zoning map and the LCP Land Use Plan Map show which applies to a given parcel.

What business uses the County allows here

Village commerce. LCP Policy 1.12 calls for infill and use of the existing Rural Service Centers to supply commercial facilities that support agriculture and recreation, and to meet housing needs created by local jobs. Uses must match the LCP Land Use Plan Map and its density tables. In practice, that favors a general store, a cafe, farm supply, or services for beach and ranch visitors over offices or general retail aimed at a wider market.

Farm and ranch uses in PAD. Chapter 8.106 is written to keep farmland in production.

• By right. Farming, accessory farm buildings and temporary seasonal roadstands under 200 square feet that can be moved.
• By Planned Agricultural Permit on prime land. Permanent roadstands (with conversion capped at a quarter acre), agricultural processing, storage and shipping, and ancillary agricultural uses, which together are capped at 3 acres of prime land.
• By permit on other lands. Wineries, commercial recreation, aquaculture, research facilities and kennels.
• Who decides. Planned Agricultural Permits go to the County Planning Commission under use permit procedures, with written findings.

Height. Commercial and residential buildings in PAD are limited to three stories or 36 feet unless a use permit allows more.

Lodging, short-term rentals and the coastal limits

Rural lodging cap. LCP Policy 1.24(b) caps hotel, motel and country inn rooms across the County’s rural Coastal Zone at an interim total of 600 lodging units; once that total is reached, more require an LCP amendment. Ask Planning how many remain before planning an inn.

Short-term rentals. In the Coastal Zone, Chapter 8.368, adopted by Ordinance 4777 in 2017, requires a three-year permit from the Planning Director for each address. Rentals are capped at 180 nights a year, with nights the owner is present excluded, and second units defined in the County’s ADU chapter are carved out of the definition, so confirm with the County before renting an ADU nightly. Operators register for and pay transient occupancy tax.

Building permit limits. The LCP’s Table 1.4 allows the San Gregorio watershed four building permits a year for new rural homes. The table is written for new residential construction, so it matters for any caretaker or employee home built with a business; affordable and farm labor housing are exempt under Policy 1.24(a).

Water, septic and land division

• Wells. In PAD, each new non-agricultural parcel must show a safe, adequate well on that parcel; a well on the parent property can serve no more than four new parcels, and farm and habitat water supplies must not be reduced.
• Water budgets. Non-farm uses must hold enough density credits, which the code ties to water use, figuring 315 gallons a day for a home in the two peak months. Credits run one per 160 acres of prime land and one per 40 acres of other land.
• Septic. New non-agricultural parcels must include an on-site sewage disposal area, and the LCP requires septic systems to avoid adding nutrients and pathogens to ground and surface water.
• Monitoring. LCP Policy 1.26 calls for watershed-by-watershed water monitoring to decide how much new development each can support.

Transfer tax, business tax and property tax

The County Recorder charges documentary transfer tax at $0.55 per $500 of value, less assumed liens. There is no city tax in unincorporated San Gregorio; the Recorder names only the City of San Mateo as adding its own. We did not verify an unincorporated business license tax. A change of ownership generally triggers Proposition 13 reassessment, and land under a Williamson Act contract is assessed on its farm income instead, so check for a contract.

Due diligence that matters in San Gregorio

Start with our commercial due diligence checklist, then add:

• Pull the zoning map and LCP land use designation, and confirm whether the parcel is in the Rural Service Center.
• Request the Coastal Development Permit and use permit history for the existing business.
• Have the well tested for yield and quality and the septic system inspected for the intended use.
• For lodging, confirm the remaining room count under the 600-unit rural cap.
• On PAD land, check for agricultural easements and whether prime soils limit building sites.
• Confirm fire access and road standards with the fire authority for any public-serving use.

Questions people ask

Sources & notes

1. San Mateo County Title 8, Zoning and Development Code (GoCodebook)
2. Chapter 8.106, PAD Planned Agricultural District
3. Chapter 8.368, Short-Term Rentals (Coastal Zone)
4. Chapter 8.252, CD Coastal Development District
5. San Mateo County Local Coastal Program page
6. Local Coastal Program Policies (2021 edition)
7. San Mateo County, transient occupancy tax
8. San Mateo County Clerk-Recorder, documentary transfer tax

Note: We did not confirm which district is mapped on each village parcel, read the RM-CZ, TPZ-CZ, C-1 or CD chapters beyond their titles, or confirm how many rural lodging units remain under the 600-unit cap. The Williamson Act note is general state law, not verified for any parcel.

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

Related: San Gregorio real estate guide · Multifamily property in San Gregorio · Commercial real estate services