If you are a San Diego homeowner who uses airbnb or Vrbo or want to undertake a San Diego short-term rental in the future, there are new regulations about to come into play. Always a hot button topic, the new regulations capping short-term rentals was voted on and approved by the Coastal Commission on March 2022.
Here’s what you need to know:
Any owner who rents out a space for less than 30 days is subject to the new regulations. However, not all short-term rentals will fall under the same guidelines.
Short-term rentals have been divided into four tiers.
Tier 1 encompasses part time short-term rentals. If you rent for an aggregate of 20 days or less per year, you fall into the Tier 1 category. Owners do not need to reside on the property.
Tier 2 consists of home sharing rentals such as renting out a room or another unit on the property. Homeowners must use the home as a permanent residence and are not allowed to be gone more than 90 days of the year.
Tier 3 and Tier 4 are for whole home short-term rentals rented for more than 20 days of the year. Owners do not reside on the property. Tier 3 is designated for homes outside of Mission Beach and will allow up to 1% of San Diego’s total housing units (does not include Mission Beach). Tier 4 (specifically created for Mission Beach) allows licenses to be issued at a quantity of up to 30% of the total housing in Mission Beach. Both Tier 3 and 4 require a minimum two night stay.
New regulations allow home owners one license at a time in the tier of their choice. This means, you cannot rent out a bedroom in your home as a short-term rental under Tier 2 and also rent a separate property under Tier 3 or 4 at the same time.
How quickly do I need to apply?
Tier 1 and Tier 2 can apply at any time and will not be restricted in number. Tier 3 and 4, will be allocated by a lottery system. Owners have until November 30, 2022 to submit their application to enter the lottery. After the lottery has been conducted and closed, there is no telling when the application period for Tiers 3 & 4 will open back up. A waitlist is highly anticipated.
How long will my short-term rental license be valid for?
Once an owner is selected and approved, their license will be valid for two years. Owners will be able to renew each two year term without re-entering the lottery.
My Advice:
Committed to undertaking a short-term rental venture under Tier 3 or 4? Check out the San Diego Council District Map to see if your home is located in the city of San Diego. Apply as quickly as possible. Should you not win the lottery or miss the November 30, 2022 deadline, submit your name on the waiting list to be next in line for consideration.
While you wait, do not sit idle. Consider other areas around San Diego for your short term rental. Regulations are being enacted for the city of San Diego, not the county.
One of the benefits, along with the main purpose of enacting San Diego’s short-term rental restrictions is… more livable housing for all of us residing in San Diego. If you have multiple short term rentals or do not win an allocation in the the short-term rental lottery, take a look at renting your home out long term or selling to see a return on your investment.
I anticipate seeing more long-term rentals and homes for sale next year as the new San Diego short-term rental regulations take effect. Keep your eyes peeled for your dream home and Contact Me for any of your real estate related needs.
Still have questions? For more detailed San Diego short term rental information, visit https://www.sandiego.gov/treasurer/short-term-residential-occupancy.
