Doesn't seem too difficult to get a 'free' license and pay the occupancy tax. I've stayed in various beach rentals along the California coast for 2 weeks at a time and have been charged occupancy tax.

http://www.co.monterey.ca.us/taxcollector/TOT.html

At that link, you'll see "Monterey County Planning and Building Inspection Department requires Homeowners wishing to pursue short term residential rentals (7-30 days) to obtain an Administrative Permit."

In other words, you can't just pay the tax.

On http://www.mcar.com/montereycounty.html, we find:

County of Monterey Non-Coastal: Administrative permit required for rentals less than 30 days in R-1 zoning district Minimum rental period 7 days Zoning Ordinance 21.64.280

Coastal: Contact: Planning and Building Inspection Department (831) 883-7500

I'd guess that the county is easier to deal with on this than the various cities (where the hotels and the bulk of the housing are).

In some vacation spots the law is even tougher. Long Beach, NY is worried about people renting a house and having all their friends stay:

Not more than two (2) persons not related to each other by blood, adoption or marriage, living and cooking together in a single dwelling unit.

A lot of towns also expect you to get a rental permit too.