City of San Diego, CA

04/07/2021 | Press release | Distributed by Public on 04/08/2021 14:13

Short Term Vacation Rental Ordinance FAQ's

What does this ordinance do?

The intent of the proposed Short Term Residential Occupancy (STRO) regulations are to help preserve the availability of housing by reducing the number of dwelling units currently used for STRO by more than 70 percent, limiting the maximum number of licenses that any natural person can be issued to one and placing caps on whole home STRO licenses.

For whole home STRO licenses outside of the Mission Beach Community Planning Area, the total number of whole home licenses available will equal 1 percent of the total number of residential units in the City, excluding those in the Mission Beach Community Planning Area. Within the Mission Beach Community Planning Area, the total number of whole home licenses available will equal 30 percent of the total residential units within the Mission Beach Community Planning Area.

These actions will help protect the livability of residential neighborhoods by requiring Good Neighbor policies; and will allow the diversification in economic opportunity that STRO enables, both for hosts and for guests. These actions will further help preserve low cost accommodations typically associated with the Mission Beach area. The intent of the regulation for the STRO platforms is to ensure that hosts are properly licensed and registered with the City.

What do the different tiers mean?

Tier One - Part-Time STRO rented for an aggregate of 20-days or less per year. The owner or permanent resident does not need to reside onsite during the STRO.

Tier Two - Home sharing. Renting a room or rooms in the home for more than 20 days per year so long as the owner or permanent resident resides onsite during the STRO, but the owner or permanent resident may be absent from the permanent residence during the STRO for up to 90 days per calendar year. Home sharing includes duplex properties and eligible accessory dwelling units and granny flats when the host resides onsite.

 Tier Three - Whole home rentals for more than 20-days per year where the owner or permanent resident does not reside onsite. The amount of whole home STRO licenses will not exceed 1 percent of San Diego's total housing units outside the Mission Beach Community Planning Area according to SANDAG's annual Demographic and Socioeconomic Housing estimates. This amount is equivalent to 5,400 licenses today. Tiers One, Two and Four are not counted in the 1 percent cap. Tier Three license holders must require a two-night minimum stay for guests.

Tier Four - Mission Beach whole home rentals for more than 20 days per year STRO. Consistent with recommendations from the Mission Beach Town Council, the amount of whole home licenses in the Mission Beach Community Planning Area will be up to 30 percent of the community's total housing units for according to SANDAG's annual Demographic and Socioeconomic Housing estimates. This amount is equivalent to 1,081 licenses today. Tier Four license holders must require a two-night minimum stay for guests.

Why was there a 'carve out' of Mission Beach?

With its unique peninsular geography, high density units sandwiched by the Pacific Ocean to the west and serene Mission Bay to the east, Mission Beach has long been a haven for STROs. While there are permanent residents who make Mission Beach their home, a large percentage of the dwelling units in the area have been a combination of monthly and weekly STRO for decades. 

A widely known rental model in Mission Beach is a combination of short term and long-term rental; nine months or longer during the fall, winter and spring, and weekly during the summer. Due to the limited visitor accommodations in one of San Diego's most unique and coveted beach areas, the STRO regulations include the recommendations proposed by the Mission Beach Town Council allowing for up to 30 percent of the total housing units in the community to be used for whole home STRO. Today this amount would equate to 1,081 whole home STRO units. Whole home STRO units in Mission Beach shall not be counted in the citywide whole home cap.

A restriction on STRO units in Mission Beach could have an adverse impact on public access and visitor- serving opportunities in this area. STRO units have historically provided and continue to be an important source of visitor accommodations by increasing the available supply of overnight accommodations. STRO units provide amenities that distinguish them from other types of overnight lodging such as hotels and may make them a more affordable option for overnight stays on the coast, particularly for groups and families. Affordable access to lodging near the coast is legally required by the California Coastal Commission.

Why can't we just 'enforce the code'?

Since we have no regulation specifically defining short-term vacation rentals, the City must instead go to court and rely on existing laws that deal with nuisance, trespass, noise, and other legal theories. It's neither quick nor easy. Litigation can take years, which is of no consolation to impacted neighborhoods.

How will this ordinance work?

Program Overview

The STRO regulations provide the City the mechanism to cite, suspend, or revoke the license of hosts not following Municipal Code including the City's STRO regulations.

  • A license or registration will be obtained prior to STRO use. STRO licenses must be renewed bi- annually. Hosts will be required to obtain a Transient Occupancy Tax Certificate. The TOT certificate number shall be posted on all advertisements for the STRO.
  • The City will maintain a Registry of all STRO licenses or registration locations and will provide the information to the SDPD.
  •  Complaint calls will be received 24 hours per day, seven days per week. An online portal to report violations will also be created.

In addition to the Municipal Code's general enforcement mechanisms, STRO enforcement specifically can include:

  • A first response notice constitutes a 'warning'.
  • A second and subsequent response notice may result in the property's responsible person or primary resident being issued an administrative citation or notice of violation.
  • A third response notice (citation) within a 12-month period may result in the STRO license revocation for no less than a 12-month period for the premises for which the license was originally issued.
  • The City will be responsible for enforcement including notice of violations, administrative citations, and revocation of licenses. If a violation is found during the tax compliance audit process, a referral will be made to the City for enforcement.
  • The City will continue to monitor websites to ensure that STROs operators are paying TOT. Violators will be reported to the City Attorney for action.

On top of the enforcement above, STRs will also be required to have stay up to date on the following items - 

  • Good Neighbor Policy - The Good Neighbor policy shall inform guests they are expected to abide by all laws, be respectful, and maintain the residential character of the neighborhood. It also includes information regarding the maximum number of occupants and the City noise limits. The Good Neighbor policy must remind guests that violation of the noise ordinance can result in individual administrative citations to both the guest and the host, of up to $1,000.  
  • Local Contact - A critical component for enforcement of the regulations is the requirement of local contact available to respond to neighborhood disturbances within one hour. All hosts must post a notice in a visible location (from the sidewalk or public right of way) containing contact information for a designated local contact who shall be responsible for actively discouraging and preventing any nuisance activity at the premises, pursuant to Municipal Code Chapter 5.

What are the steps to create this kind of enforcement? 

  • Hire Code Enforcement officers
  • Establish digital license and registration system that interfaces with City databases and
  • allows pass through registration with platforms.
  • Program Enforcement costs will be covered by the General Fund, offset by
  • corresponding STRO generated revenue.
  • Hire the following: 1 Program Manager, 1 Fiscal Analyst, Plan Review Specialists, and 4 Code Enforcement Officers

What is the fee structure?

Biannual license or renewal fees shall be assessed at varying rates based on estimated services requirements and costs to the City. Historically, part time (Tier One) and home sharing (Tier Two) STRO units have not required as much enforcement as whole home STRO units (Tiers Three and Four). Council will be asked to adopt fees before January 1, 2022.

When does this go into effect?

First, The ordinance will return to City Council in October for updates on the lottery and prioritization related to licensing. Then full compliance with every section in the ordinance will be required by hosts and STRO platforms by January 1, 2022. Once the ordinance is approved by Council, City staff will create administrative regulations that will detail how licenses will be issued. 

How is the lottery being set up?

The lottery system is currently being designed and more information will be provided upon it's completion before October.

How does this impact ADUs?

ADU's built before September 2017 are eligible to be STVRs. Any unit built after that is not eligible to be used as an STVR or for entrance into the lottery.