City Council OKs short-term rental regulations

Written by Brandon Lee Romo

The San Diego City Council has voted 8-1 to pass a regulation on short-term vacation rentals in the county. This ordinance would limit the number of short-term vacation rentals to 1% of the city’s overall housing stock. Officials have predicted that this would cut the number of vacation rentals in half, to around 5,400 units.

Mission Beach is an exception, where short-term rentals can not reach even 30 percent of the housing available. The ordinance would also include a good-neighbor policy, in which up to $1,000 could be charged for breaching rental laws for both hosts and guests. For vacation rentals of over 21 days, property owners would need a permit, but room rentals under 21 days would not require a permit.

These regulations on vacation rentals are a major infringement on the rights of property owners. Those who own these vacation properties have paid several hundred thousands of dollars, if not millions, to own them, with the expectation that they would be making it back by renting them out. Regulating the number of units that can be rented is an unexpected burden that may drive people away from investing in the city. Investors will see San Diego’s vacation rental sector as a thing of the past with too little reward for such high risk.

Also, with a smaller supply of rentals available for tourists, the city can expect to bring in less revenue through tourism. Tourists can also likely expect prices of rental properties to skyrocket as there will be a large demand with a significantly reduced supply.

A second vote at a future council meeting, likely in October, will be necessary for final approval of the ordinance. If this vote passes, the ordinance would likely take effect at the beginning of 2022.