Good Neighbor Short-Term Rental Ordinance FAQ

General

What is a short-term rental (STR)?

The occupancy of a dwelling unit or part thereof for less than one month.

What is home sharing and how is it different than whole-home rentals?

Home share is the short-term residential occupancy of either the host’s primary residence or a separate dwelling unit on the same premises as the host’s primary residence. Whereas, whole-home rentals are the short-term residential occupancy of the host’s entire dwelling unit while the host is not physically present and residing in the dwelling unit.

The City Council passed new laws regulating STRs, what will they do?

The new regulations will allow a STR host to hold a maximum of one license at any given time in one of the following four license Tiers:

  1. Tier 1 – Occasional Use
    • License holder’s primary or non-primary residence
    • Home share and whole-home rentals allowed
    • No more than 20 booked nights per year
    • No limit on number of permits issued citywide
  2. Tier 2 – Home Sharing
    • License holder’s primary residence only
    • Home share only
    • Allows home sharing for up to 365 nights per year
    • Duplex properties and eligible granny flats are allowed as long as the primary resident lives onsite
    • No limit on the number of permits issued citywide
  3. Tier 3 – Vacation Rental
    • License holder’s primary or non-primary residence
    • Allows whole-home rental for up to 365 nights per year
    • Total number of licenses capped at 1% of total housing units in San Diego, excluding Mission Beach
    • Two-night minimum stay required
  4. Tier 4 – Mission Beach Vacation Rental
    • License holder’s primary or non-primary residence
    • Allows whole-home rental for up to 365 nights per year
    • Total number of licenses capped at 30% of total housing units in Mission Beach
    • Two-night minimum stay required

Who proposed these regulations?

Council President Dr. Jennifer Campbell proposed the Good Neighbor STR Ordinance, which follows a compromise proposed by Unite Here Local 30 and Expedia Group.

Why was it important to pass these regulations now?

A. Share San Diego believes local families and businesses who rely on STRs to make ends meet should be given certainty in knowing that their livelihoods won’t be regulated out of existence overnight.

We’ve spent years working with City leaders, local stakeholders and community groups in the hopes that eventually the City would adopt reasonable regulations. Despite our good faith efforts, some local politicians have used STRs as a scapegoat for all of the City’s problems as they’ve advocated for banning STRs. As a result, local businesses, families and property managers have suffered and frequently dealt with harassment from STR opponents. This ordinance will ensure responsible STR hosts can continue to operate without fear that their businesses being taken away.

When will the ordinance go into effect?

To allow STR hosts and City departments time to prepare, the new rules will begin July 1, 2022, but the City Council will review administrative policies on or before October 15, 2021 and review the ordinance’s effects annually

Where can I find a copy of the ordinance?

Click here to view the Good Neighbor STR Ordinance.

STR Owners

Will the new rules apply to all of San Diego County or just the City of San Diego?

Only the City of San Diego.

I have multiple STRs, can I get multiple licenses?

No. Licenses are limited to one per person.

Where can I apply for a license?

You will be able to apply for a license online through the City of San Diego’s website sometime before the ordinance goes into effect on July 1, 2022.

How many licenses will be available for Tier 3, whole-homes rentals of more than 20 days per year outside of Mission Beach?

Approximately 5,364.

How many licenses will be available for Tier 4, whole-home rentals of more than 20 days per year inside Mission Beach?

Approximately 1,081.

How will Tier 3 and Tier 4 license be distributed?

The City is currently determining a lottery system for Tier 3 and Tier 4 licenses that will give preference to responsible STR hosts who have paid their taxes and have been good actors. The City Council will review proposals for the lottery system on or before October 15, 2021.

Are licenses transferable?

No, and STR hosts must renew their license every two years.

Can I switch to a different license tier if my situation changes?

Yes, an STR host may hold one single license from any tier, so in order to switch to a different tier, the first license will need to be canceled first before applying for another one.

Why didn’t other communities get a higher license cap like Mission Beach?

STRs have existed in Mission Beach for more than 100 years. The community has embraced them and recognize the economic benefits they bring to the region. For that reason, the Council gave preference to Mission Beach by adopting the Mission Beach Town Council’s recommendation to allow up to 30 percent of the housing stock to be used for STRs.

Enforcement

I am opposed to STRs, how will these new rules benefit me?

Council President Jennifer Campbell’s Good Neighbor STR ordinance is a compromise that creates a process by which residents can provide a service to the visitors of San Diego while at the same time protecting the integrity of existing neighborhoods. The regulations establish a mechanism to cite, suspend or revoke the license of hosts not following the City’s regulations, and will return homes to the housing market.

The City of San Diego has a permissive zoning code, so why doesn’t the City just “enforce the code” and make all STRs illegal?

Court case after court case have determined cities cannot ban STRs:

  • City of Del Mar – The City of Del Mar agued that STRs are illegal because they are not listed in the City’s permissive zoning code, but the court rejected this argument because, similar to San Diego, the City had allowed STRs to exist for years.
  • City of Manhattan Beach – The court ruled the City of Manhattan Beach’s STR ban violated the California Coastal Act and could no longer be enforced. Furthermore, courts are questioning the liability of Manhattan Beach towards owners who were prevented from operating STRs.

How will the new regulations limit nuisance STRs?

Hosts are required to provide guests with a Good Neighbor Code of Conduct designed to make guests familiar with trash, parking and other rules of conduct that promote neighborhood cohesion and livability. The Good Neighbor Code of Conduct shall inform guests they are expected to abide by all laws, be respectful, and maintain the residential character of the neighborhood.

What is to stop bad actors from listing their property without a license?

The ordinance makes it illegal for hosting platforms such as Vrbo and Airbnb from processing any booking service for a STR without a valid license, and hosting platforms are required to remove listings that have had their license revoked.

What are the repercussions for guests and owners who flaunt the rules?

Verified violations may results in fines of up to $1,000 for guests and hosts. Hosts who repeatedly break the rules may have their license revoked.

What happens when police officers are too busy to respond to nuisances?

A critical component for enforcement of the regulations is the requirement of a local contact available to respond to neighborhood disturbances within one hour. All hosts must post a notice in a visible location containing contact information for a designated local contact who shall be responsible for actively discouraging and preventing any nuisance activity at the premises.

Additionally, license fees and fines from STRs will fully fund a robust night and weekend code enforcement program to rapidly respond to complaints instead of police officers. Other cities that have adopted similar enforcement regulations saw complaints drop by 90% or more.

Setting the record straight on Short Term Rentals in San Diego

There are some misconceptions about short-term rentals that have created false narratives. We think it’s important to set the record straight so that San Diegans have all the facts about the importance of short-term vacation rentals in our City.

FALSE: San Diego zoning already prohibits whole-house vacation rentals in residential neighborhoods. The City must enforce the existing law.

This is a summary of former City Attorney Jan Goldsmith’s position on why we cannot use a permissive interpretation of existing law to conclude that short term rentals are prohibited just because they are not expressly permitted:

  • Current language in the Municipal Code also doesn’t explicitly permit long-term rentals, OR owner-occupied either, OR even guests, so would they also be illegal occupants?
  • Current zoning ordinance calls for ‘single-family dwelling unit only’, no language covering legal basis for occupancy
  • Permissive zoning ordinances has to fit within RS zone definitions and the current definition is vague.

Because this language is too vague, it would never hold up in court.

This is why Share San Diego advocates for a fair and reasonable ordinance that does clarify the zoning language so that it is no longer vague. We do want regulations around STR’s, just one that strikes a reasonable compromise that protect private property rights, stops out of town investors and creates a streamlined registration process for second home vacation rentals.

FALSE: Short-term vacation rentals (STVRs) are Visitor Accommodations and are prohibited in residential zones.

The “visitor accommodations” ordinance adopted in 1997 bars residential uses that “provide lodging… primarily to visitors and tourists.”

The following is a summary of former San Diego City Attorney Jan Goldsmith’s stance on this topic:

  • Investigators can’t determine what constitutes what ‘primarily’ means. Let’s say we interpret it to mean ‘more than 50% of the time’. But over what period does that include? One year? Two years?
  • Also ‘visitor’ is not clearly defined. Is someone coming from Mira Mesa to rent a house for a family reunion in Mission Beach considered a visitor?

In summary, if zoning enforcement officers were to try to enforce the code ‘as it’s written’, they will have to know where occupants renting a home come from, what they are doing, and why they are there. These would be very long, complicated cases that would require them to stake out a house for a long time, get search warrants, etc. wasting tax dollars.

As a result, it’s no surprise that there have been no cases brought to city attorney office since the adoption of the visitor accommodations ordinance.

FALSE: We must stop big corporations from buying out apartment buildings and converting them to illegal hotels.

We agree that out of town investors and bad actors should be banned in San Diego. That’s why we support fair, reasonable regulations that protect private property and ensure that the city continues to benefit from the millions of dollars in tourism taxes and visitor spend that short-term rentals bring each year. Moreover, we think that a process which includes enforcement funding and streamlined registration is essential to success in regulating short-term rentals.

There are already rules and regulations against this notion of buying out an apartment building to convert into a hotel (San Diego Municipal Code §113.0103, which defines when a short-term rental would be officially considered a hotel), so there is no need to define new regulations to ‘stop’ this from happening. Existing code already prohibits this, and we do not support anyone, whether it’s a corporation or an individual, engaging in this activity illegally.

FALSE: Operating a short-term rental is a business activity that should be outlawed in a residential zone.

The current commonly-accepted definition of a short-term rental is one that accommodates stays of less than 30 days. Meanwhile, a long-term rental is 30 days or more. A short term rental is no more a business activity than a long-term rental if the only difference is 29 vs. 30 days.

But a short-term rental is something that a teacher could rent out for most of the summer if they travel, a retired couple could rent out for a few weekends a year to supplement a fixed income, or people with an inherited home like to keep flexible for family and friends who visit throughout the year.

That’s why we strive to strike a reasonable compromise to create a fair and balanced ordinance for the coexistence of both short-term and long-term rentals in the City of San Diego.

FALSE: Short-term rentals are primarily responsible for the current housing crisis in San Diego

San Diego is an increasingly expensive city and the housing affordability crisis has been building up for years as a result of several factors, including lack of new development and halting of development underway.

In reality, short-term rentals are what help many long time San Diego residents stay in the city because they’ve come to rely on the important income generated by sharing their homes.

This recent article from the San Diego Union Tribune shows new housing unit development by decade in San Diego. It’s clear that the reason we have a shortage of housing stock currently is due to the City of San Diego’s failure to approve an adequate amount of development over the past decade. According to the article, we are currently about ~80,000 units behind where we need to be to keep up with demand.

The real culprit here are the ‘not-in-my-backyard’ constituents such as Save San Diego Neighborhoods, who have done everything they can to stop the increase of height limits on buildings for example.

FALSE: Banning short-term rentals will make homes and rents more affordable again in San Diego

While it’s easy and convenient to jump to this conclusion, there has been no evidence supporting this hypothesis in any other city. Housing affordability is a very complex issue that does not have a simple answer.

We understand concerns around housing affordability and homeless in San Diego – and want to play a part in finding a solution. That’s why we support reasonable regulations that would include funding for affordable housing and would stop out of town investors.

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