San Diego limiting Short Term Rentals

[Mark Frattini]

Mayor Todd Gloria Wednesday signed into law an ordinance capping short-term vacation rentals at 1% of the city’s housing supply and prioritizing “good actors” in a lottery to determine who gets to offer properties for whole-home vacation rentals.

The San Diego City Council passed the ordinance 8-1 on April 6. Gloria’s signature sets in motion a city effort to finalize the lottery process for people renting out their properties.

This means the City of San Diego government will choose which landlords can continue renting their properties, and which ones can’t. A highly controversial style of governance that many San Diegans believe is overreaching. 

[Dan H.]

4 or 5 years ago the city council passed a far more restrictive ban on STRs (basically banned except for owner occupied).   Before it went into affect, a petition gathering to place on the ballot got the required signatures. The city council retracted the ban before it went before the voters.  

So ...

• Anything can happen between now and when it is scheduled to go into affect. 

• I would not be surprised to see a signature gathering to place this proposal on the ballot.   If there is not a petition gathering, a primary reason will be that it is not as restrictive as the proposal from a few years ago.
  at least the proposal is prioritizing ”good actors”.   Our STRs have been professionally managed since 1999.  That is a long history of hopefully outstanding management.

I believe that STRs in San Diego county are high risk and that anyone planning an STR should have a back up plan.

One thing I find really aggravating about this STR regulation is the timing. In 2020, STRs were banned in the county from some point in March to some point in June and again from before thanksgiving through the end of the year. When STRs were not banned, they had reduced occupancy and reduced rents due to many of the tourist attractions being closed. Our STRs were down more than $60k in rents due to the pandemic impacts. Then the city council proposes the 1% threshold. I refer to it as heartless. it will result in forcing many people to have to sell because 2020 consumed a lot of the reserves that owners should have.

What I would have preferred is either a slower phase out of STR or no phase out but instead ban new STRs.