San Diego ordinance that dramatically reduces the number of short-term rentals signed into law

A San Diego ordinance that will dramatically reduce the number of short-term vacation rentals in San Diego was signed into law by Mayor Todd Gloria on Wednesday.

The Short Term Residential Occupancy Ordinance (STRO) will separate the city’s short-term rentals into four different categories: part-time rentals rented 20 days a year, roommate rentals, whole house rentals and whole house rentals in Mission Beach.

The number of short-term whole-home rentals will be capped at 1% of the city’s housing stock under the ordinance, significantly reducing the number of whole-home rentals from approximately 14,700 to 5,400. Mission Beach, a more requested vacation area, will have a special ceiling of 30%. Landlords will now also need to obtain a vacation rental license if they want to continue renting it, limiting each person to just one rental property in the city. Rental platforms such as Airbnb will, in turn, need to obtain the license number in order to list the property for rent on their site.

Additionally, part-time short-term rental operators could be licensed at lower annual fees to host high-attendance events such as Comic-Con and sporting events. Local contact will also be required by owners to respond to emergencies within an hour or less.

The law is expected to come into full effect by July 1, 2022, along with the holiday permit requirement. Although the licensing process itself is not currently in place, an amendment to the ordinance said tenants who have correctly followed San Diego rental laws in the past will be given priority.

The issue of short-term vacation rentals has been hotly contested for years. Many lawmakers want more regulations to curb the rental market and increase housing stock to tackle a growing problem of homelessness. Renters want to be able to continue to earn a living by renting out their property and offering hotel alternatives to vacationers.

It was such a contentious issue that Governor Gavin Newsom signed AB 1731a bill that prevents short-term rental companies such as Airbnb from renting “vacation” rentals in San Diego County for more than 30 days a year, unless the full-time resident lives there, in law last year.

The number of short-term rentals in the city will be halved

The issue remains how exactly the licensing lottery system will work, leaving many San Diego homeowners and landlords hanging in the balance. But supporters celebrated the signing on Wednesday. Mayor Gloria noted after signing that he now hopes to improve the quality of life in neighborhoods now that short-term vacation rentals will be cut by two-thirds in the city.

“These regulations should have been put in place a long time ago,” Mayor Gloria said Wednesday. “Thanks to the leadership of Board Chair Jennifer Campbell, who worked closely with me to get the job done, San Diego finally has a clear set of rules governing short-term vacation rentals. Now the job looks to thoughtful implementation, faithful application, and careful monitoring to improve the quality of life in our neighborhoods.

City Council Speaker Campbell agreed with Gloria, saying the homes would now return to the San Diego housing market.

“I am grateful to the mayor for signing this ordinance, which will end the unchecked growth of short-term rentals, return homes to the San Diego housing market, and bring peace and quiet to our neighborhoods,” said Campbell added.

The signing of the ordinance, which had already passed the city council 8-1 earlier this month, left many homeowners and landlords frustrated. Some independent tenants who had several rentals at the same time to generate income now find themselves at a crossroads in the city.

“I have three houses to rent,” Sebastian, a multi-home owner in San Diego who has been renting homes since 2004, told The Globe on Thursday. “A lot of families don’t want hotels or an Airbnb mother-in-law suite. They want, or should I say, need housing in many cases simply because of the size of their family, or because several families would stay there.Thus reducing the number of short-term rentals in the city, the city now forces renters to choose between an expensive hotel or an Airbnb.Not a house to use.

“And the rental rules are crazy. It’s a per person rental, so if there’s a family with multiple house rentals in town, they can easily put a house under different family member names and move on, while landlords like me are stuck with just one. It’s a completely unfair system, but as the vote showed, the city just doesn’t seem to care.

The reduced number of rentals should also reduce taxes from rental use. According to the San Diego Office of the Independent Budget Analyst, the city’s transitional occupancy tax is expected to increase from $7.3 million per year to $4.4 million per year.

A more detailed overview of the rental lottery is expected to be released by the city later this year.