SAN DIEGO – For rental hosts looking to use their property as short-term rentals in the city of San Diego, they can now apply for a license to offer stays of less than a month, although it’s not guaranteed for all who apply. Applicants will be entered into a lottery system that prioritizes what the city calls “good actors.” 

By May 1, 2023, property owners who are looking to use their space as a short-term rental must have a license. It’s something vacation rental hosts tell FOX 5 they’re frustrated with, calling the new ordinance unfair.

The city, however, suggests this will help long-term renters and buyers maneuver their way back into a volatile and competitive housing market. 

Nancy Kramer has been renting her San Diego beach front property at Capri by the Sea out short term since 2002. Twenty years later, she says her business could reach a screeching halt.

I feel like all of a sudden they’re pulling the rug out from under me…Now I don’t even know if I’m going to be able to do it anymore in a few months,” Kramer said. 

Greg Ross works with Kramer and manages more than 80 properties throughout the city.

“My owners are really really stressing out. I get calls every day, we’re helping them out with the application process, we’re finding a lot of property management companies are not helping their owners out,” Ross said.

This, followed by new regulations from the city requiring rental hosts to obtain a license through a lottery system based off of merit, while cutting the city’s current whole home vacation rentals in half. 

It’s something Councilmember Jennifer Campbell celebrates.

“Now we’ve put a cap on whole home rentals and a cap is 5,400 for the city, 1% of the city’s residences. For Mission Beach, they asked us if they can have a cap of 30% because they were at 6% whole home rentals,” Campbell said.

Campbell suggests the cutbacks not only improve the quality of life for neighbors, but also help the long-term renter, giving more housing back to the people of San Diego. 

One expert we spoke to says otherwise, noting the homes in the last market cycle which were bought in the last downturn of the economic cycle, were not bought by private personal investors, but rather by bigger companies.

“We saw all of these bigger companies go and snatch all the available homes and now there’s not a lot of homes available, and even with this ordinance, I doubt it will have much of an impact on the market,” said Tanya Hertz, a real estate professor with San Diego State University. 

As of Monday, the application period for all Short-Term Rental Operators or STRO license tiers is open. A host can apply for one of four STRO tiers: Part-Time, Home Sharing, Whole-Home and Mission Beach Whole Home. The license application period for tiers three and four will close on Nov. 30, 2022 at 5:00 p.m. Tiers one and two will remain open indefinitely.

You can find a link to the application here.