Mayor Todd Gloria on Wednesday signed legislation to regulate short-term vacation rentals in San Diego, turning the page on an issue that has been hotly debated for years.
The Short-Term Residential Occupancy (STRO) ordinance limits whole-home, short-term vacation rentals to 1% of the city's overall housing stock, except for in Mission Beach where 30% of homes can be rented.
It also requires property owners to obtain a license for vacation rentals and limits them to one rental property within the city of San Diego. Hosting platforms will be required to collect the license number in order to list a property within the city of San Diego, according to the city.
The law requiring a license will go into effect on July 1, 2022. giving homeowners time to go through the process to secure a license, which must still be developed.
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Mayor Gloria said city staff is still working on a plan to distribute licenses and a team to regulate the new regulations. He proposed creating a lottery process for an initial allocation of licenses.
The ordinance, which Campbell called a compromise between property owners and corporate rental services such as VRBO and Airbnb, has drawn its own controversy -- mainly from landlords concerned about the fairness and equitability of the forthcoming lottery system.
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An amendment was added to prioritize "good actors," those who have abided by the city's previous rental laws, when licensing begins later this year.
The legislation also has a good-neighbor policy, in which both hosts and guests could be fined up to $1,000 for violating rental rules. Guests renting a whole home in San Diego will be required to stay for a minimum of two nights.
In July of 2019, there were 16,000 units being used for short-term housing, according to a city auditor's report. Of those, only about 6,600 were paying the required transient occupancy taxes.
Officials said the move would cut the number of vacation rentals to about 5,400 a year.
The law signed by Gloria on Wednesday was introduced by San Diego City Council President Jennifer Campbell and passed by the full council in a 8-1 vote on Feb. 23, with District 1 Councilmember Joe Lacava dissenting. A second vote on April 6 solidified its fate.
"These regulations should have been put in place long ago," Mayor Gloria said. "Thanks to the leadership of Council President Jennifer Campbell, who worked closely with me to get the job done, San Diego finally has a clear set of rules governing short-term vacation rentals."
The ordinance has been in the works for two years, with the debate over what to do about short-term vacation rentals in San Diego going on for years before that.
