For anyone who hopes to use their property as a short-term rental in the City of San Diego, now is the time to ensure you have the proper licensing.
As of Monday, property owners within the city’s limits need to have gone through the Short-Term Residential Occupancy (STRO) application process, and been selected as well as be in compliance with all STRO host requirements, to rent to guests for less than one month stays.
There are four types of licenses including Tier 1 for part-time rentals, Tier 2 for rentals that are a portion of a home, Tier 3 for whole-home rentals not including Mission Beach and Tier 4 for whole-home rentals only in Mission Beach (see detailed breakdown below).
As of Apr. 21, 2023, the City of San Diego’s STRO webpage said 7,162 total applications for short-term rentals were received. Of those who applied, 6,635 licenses were issued.
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The majority of applicants, 3,845, were for Tier 3 which is referred to as “rentals for more than 20 days per year where the owner or permanent resident does not reside onsite.”
In Mission Beach, which is Tier 4 — where up to 30% of housing can be short-term rentals compared to 1% throughout the rest of San Diego — 1,290 applications were received. Of those who applied, 1,082 were issued.
Tier 4 is currently the only tier that does not have any remaining licenses available. There are more than 1,800 licenses available for whole-home rentals not in Mission Beach, and unlimited licenses available for Tier 1 and 2.
The process for choosing who to grant licenses to in Tier 3 and 4 followed a “good actor” policy. According to a Jan. 7, 2022 memorandum, the city planned to take the following factors into consideration: hosts who paid transient occupancy tax (TOT), had recent booking activity and less than three verifiable complaints.
While it is too late to apply for a license to rent a whole-home in Mission Beach, there is still time to submit an application for Tiers 1, 2 and 3. Here is how to do it.
Step 1: Get a Transient Occupancy Tax Certificate
According to the city’s website, the first step is for applicants to make sure they have a Transient Occupancy Tax Certificate. It’s required for short-term resident occupancy properties, like houses, condos and rooms. That information can be found by clicking here.
Step 2: Make Sure You're in "Paid Status"
Next, applicants need to be sure their rental unit business taxes for their property are in paid status.
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Step 3: Decide Which Tier to Apply For (Tier 1, 2 or 3)
To apply for a license, there are four tiers to consider based on your property and what you wish to rent out in a short-term capacity.
Tier 1 is for properties that are rented 20 days or less per year. While guests are present, the owner doesn’t need to be there. Tier 2 is for property owners who rent a room or rooms more than 20 days a year as long as the owner or permanent resident is onsite. Tier 3 is for whole-home applicants who do not have their home in Mission Beach.
For license holders under Tiers 3 and 4, a two-night minimum stay is required.
With the above information, applicants can start the application process. Hosts should be prepared to enter information like the address and number of bedrooms in your property, contact information, as well as tax information too. Plus, hosts will be asked to estimate the number days they plan to rent out their property and where guests can book to stay there.
The Office of the City Treasurer provided a checklist for applicants that can be found by clicking here.
