"People are always a little flabbergasted to learn that the amount of physical interaction it requires with essentially strangers," Matt Davis told KSBY in September. Davis is the design and permit lead for Crizer Construction in Los Osos. He was describing the water retrofit a new home has to complete before the County will issue a building permit.
That reaction comes up often among people pricing a vacant lot in Los Osos. A lot can look buildable on paper and still be a long way from a permit. This fall, that gap comes from a specific mismatch. The County has building allocations it expects to go unused, and it has run out of the habitat credits a new home also needs.
Fall 2026: more allocations than the County expected to use
The County's growth management system gives each new home in Los Osos a slot, called a growth rate allocation. For 2026, the Board of Supervisors approved a 0.4% growth rate, which allows a maximum of 25 new dwelling units. The Basin Management Committee had recommended 0%. Cory Hanh, the County's Long-Range Planning Division Manager, described 0.4% as "easing into it." These are the first years of building after a moratorium that started in 1988. The California Coastal Commission lifted it in 2024 and allowed up to 1% growth a year.
Allocations go first to the Waitlist to Build, in rank order. Because of delays, the County notified only its first batch for 2026: single-family ranks 1 through 12 and multifamily ranks 1 through 7. As of September 17, 2026, five properties had received an allocation, all for single-family homes on the waitlist.
The County then announced that starting October 1, unused allocations for the year would open to the entire Los Osos sewer service area, regardless of waitlist position. It expected 15 to 20 to be available. Allocations not used in 2026 can carry over into 2027, and waitlist owners who didn't get one this year keep their place. As of this writing in early October, no County update shows how many of those allocations have been claimed.
The growth cap was the obvious limit, and it turned out to be the loosest one. A cap of 25 homes still had most of its slots open in the fourth quarter.
The habitat credits ran out first
Ground disturbance in Los Osos also has to be covered under the Los Osos Habitat Conservation Plan, a 25-year plan that balances new development with protection for endangered species. A project needs a Certificate of Inclusion and has to pay the fees before the permit is issued.
On May 1, 2026, the County released about 55,000 habitat mitigation credits from a habitat restoration project it had completed. By September 17, every one of them was reserved. Thirteen projects had received credits, including single-family homes, guest houses, additions, infrastructure and emergency septic and electrical work. Six of them had received building permits. The County's guidance is to "check back in December 2026 for updates about credit availability."
That explains why so many allocations went unused. An allocation lets an owner submit for a building permit. Habitat coverage is what lets the County issue one. In fall 2026, the second supply is empty.
The fee side is easier to read. Ordinance 3522 prints a mitigation fee of $1.95 per square foot of ground disturbance, made up of $1.72 for restoration, management and administration plus $0.23 for habitat protection. At that printed rate, a project disturbing 5,000 square feet would owe $9,750. The ordinance requires annual adjustments starting July 1, 2026, and the current adjusted amount isn't printed in the FY 2026–27 fee schedule. Treat that figure as a floor to confirm with the County.
Here is where the three main permissions stood in mid-September 2026:
| Permission | What it is | Status as of September 17, 2026 |
|---|---|---|
| Growth rate allocation | One of 25 slots for new homes in 2026 | Five issued; 15 to 20 expected to open to the sewer service area October 1 |
| Habitat mitigation credits | Coverage under the Los Osos Habitat Conservation Plan | All 2026 credits reserved; next update expected December 2026 |
| Title 19 water certificate | Proof of retrofits that offset twice the home's water use | Available now, tied to the parcel, no expiration |
The one step an owner can finish now
The water certificate is the only part of this an owner controls. The County's November 2025 status report pointed vacant-lot owners to it for that reason. While development waited on habitat credits, owners could work toward a Title 19 Retrofit-to-Build certificate. That certificate doesn't expire, stays tied to the parcel, and is required before permit issuance but not to apply.
The rule exists because the groundwater basin has been in overdraft. Under the County's Title 19 LOGWB Retrofit-to-Build Requirement, new development has to replace fixtures in existing homes and businesses at a 2:1 ratio to offset its own water use. A new single-family home served by a water purveyor has to show 256 gallons per day of savings. Claire Momberger, a County senior planner, said that "averages out to maybe 10 toilets, three clothes washers, and one shower head." Replacement toilets have to use 1.0 gallon per flush or less, showerheads 1.5 gallons per minute or less, and new washers must be Energy Star-listed. Applicants send the County photos of the old and new fixtures and the purchase receipts.
The County program fee is $528.95 for the first appliance and $321 for each additional one under the FY 2026–27 fee schedule. If Momberger's rough mix of 14 fixtures were each counted as an appliance, County fees alone would come to about $4,700. That's before the fixtures, the installation and the time spent finding hosts. No local reporting in 2025 or 2026 has put a number on that all-in cost.
Finding hosts is the hard part. Davis said most applicants contact neighbors on social media, send postcards or post flyers around town, and out-of-town owners have the toughest time. The County keeps a list of people interested in receiving retrofitted appliances. Since 2009, the program has issued 66 certificates.
Your water provider decides where you can find hosts
A recent change to the program matters most for buyers comparing lots. Retrofits now count only if they're in the same water purveyor's service area as the proposed home. Los Osos has three purveyors. The Los Osos Community Services District serves Baywood Park. S&T Mutual Water Company serves Sunset Terrace near Sea Pines Golf Course. Golden State Water Company serves the rest of Los Osos. The LOCSD links a service-area map where you can check any address.
So two lots a few blocks apart can draw on very different pools of host homes. A lot in the Golden State Water area can look for hosts across most of town. A lot in Sunset Terrace can only use homes inside S&T Mutual's boundary. The sources reviewed don't give an effective date for the change, so ask whether any retrofits a seller has already lined up meet the current rule.
This is also why a lot with a finished Title 19 certificate is a different asset from the empty lot next door. The certificate stays with the parcel and doesn't expire, so the owner who did the work passes the most time-consuming step on to the buyer.
The land-use permit runs on its own clock
Projects that need a discretionary land-use permit have to get it before they apply for a construction permit. Habitat credits can be requested once the County accepts the land-use application for processing. A couple shows how long that stage can take. They bought their lot in 1973 and were at the top of the single-family waitlist in May 2026. They've gone through three sets of building plans and were still preparing their land-use permit application.
Commercial lots follow the same sequence. Alex Benson's two-story mixed-use project at 1300 2nd Street in Baywood Park would have ground-floor retail and three small apartments upstairs. A hearing officer approved it in April, and the Board of Supervisors denied an appeal on September 1. The Coastal Commission's appeal deadline was September 29, and as of September 28 the County didn't know whether an appeal had been filed.
What gets decided in December
Two decisions in December 2026 will shape next year. The Board of Supervisors is scheduled to vote on the 2027 Los Osos growth rate. Title 26 sets 0.8% for 2027, subject to the Board's adjustment, and the Basin Management Committee's September draft letter still had a placeholder where its recommended rate would go. The County also plans its next habitat credit update in December, and it expects more credits in early 2027.
A third change is further off. The County is preparing a nexus study on whether an in-lieu fee could replace the individual retrofits. The Water Resiliency Intertie Project is the main project being studied, and the Sunnyside Recycled Water Connection and Upper Aquifer Treatment projects may also be looked at. All three Los Osos water purveyors said in an August 2026 comment letter that they "do not presume that an in-lieu fee is warranted." Any fee would need its own public process. Davis told KSBY that some clients have held off on retrofits to see whether the County's requirements change. As of October 2026, the retrofit is still the only way to comply.
Questions buyers ask about Los Osos lots
How long is the waitlist? The County's posted single-family roster runs through rank 361. KSBY reported 256 people on the list in May 2026. Neither source explains the difference, so ask the County for a lot's current rank.
Does an addition or guesthouse trigger Title 19? Additions of 120 square feet or more, including guesthouses, have to retrofit fixtures in the existing structure before the building permit is finaled. The County's page doesn't name ADUs as a separate category.
What should I ask a seller about a vacant lot?
- Does the parcel already have a Title 19 certificate?
- Which water purveyor serves it?
- Where is it on the waitlist, and is it inside the sewer service area?
- Has a land-use application been accepted, or have habitat credits been reserved?
If you're looking at a vacant lot in Los Osos, I can help you find out where that parcel stands on each of these permissions before you set your offer. Barbara Letty Carstensen will go through the County records with you, explain each step in plain language and keep you updated as the December decisions come in. Schedule a Meeting to talk through a specific lot.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
