San Diego policy on short term vacation rentals (AirBnBs & VRBO’s) set to change.

The city of San Diego is tightening the regulations around short term vacation rentals, especially regarding entire homes that are rented out. The regulations are in response to the city’s critical housing shortage. Here’s the lowdown:

There will be four types of licenses for all short term rentals. The policy for whole-home rentals would limit the total available to 1% of San Diego’s existing housing stock.* Rough estimates place the current number of whole-home short term rentals available in the city at 16,000 — nobody actually knows for sure.

In any event, 1% of the housing stock comes to around 5,400, far fewer than the current estimated number. Since there will be fewer allowable whole-home rentals, the city is instituting a lottery system to award permits for them. It’s unclear as to how long the permits will be good. Hosts may hold only one permit at a time, and they will not be transferable.

New regulations regarding other types of home sharing will also be implemented, but they are not nearly as far-reaching as those for entire homes. 

You can learn more about all of the new regulations at San Diego.gov.

Short term vacation rentals in San Diego is a lucrative business. Investors see them as cash cows, and that has helped drive up housing prices.  The new regulations should stifle any more investment in this area. While this is bad news for investors, it's good news for homeowners and investors interested in long term rentals. 

 *The area around Mission Beach will be allowed a maximum of 30% of the existing housing stock, but the final number is contingent on approval by the California Coastal Commission.