San Diego Passes New Vacation Rental Regulations

The San Diego City Council has approved new regulations limiting short-term vacation rentals in the city and imposing new rules and fines for the sector as city leaders struggle to understand the real scope of the short-term rental market in the city. The new regulations will create more effective infrastructure for permitting, regulating, and enforcing the law. Writing for Voice of San Diego, Lisa Halverstadt reports on Council President Jen Campbell's plan to cap whole-home vacation rentals and introduce new regulations, which will go into effect in July 2022.

Last year, Campbell brokered a compromise "with labor groups and a vacation rental platform" to cap whole-home rentals at 1% of San Diego's housing stock and create a new licensing process and more robust enforcement system for vacation rentals. While data discrepancies uncovered by Voice of San Diego and the Office of the Independent Budget Analyst show that the proposal may not meet its stated goals, it is a step towards having a broader understanding of the sector. "Campbell’s team hasn’t attempted to guess how many whole-home rentals there could be in the city, but the Council president’s policy pitch would allow the city to hand out about 5,400 whole-home rental licenses, a figure based on the 540,022 housing units in the city, to operators who want to host guests more than 20 days a year" and unlimited licenses for shared-home rentals.

An estimate for how many short-term rentals exist puts the number at 16,361 listings, with 81% being whole-home rentals. In this case, Campbell's proposal will cut the number of these rentals by half. "The budget analysts also estimated that decrease would bring with it a 14 percent to 23 percent drop in hotel-tax revenue," but this loss would be mitigated by the pandemic-induced reductions in tourism revenue. With vacation rental sites reluctant to share data, getting accurate information can be difficult. The new regulations could help the city more accurately assess the vacation rental market and implement policies to regulate it. "Campbell, Mayor Todd Gloria’s office and city officials pledged to ensure the vacation rental regulations are reviewed annually and tweaked as needed to address lessons the city learns after they are approved."