SAN DIEGO — The City of San Diego planned to hold a lottery to determine which short-term rental owners would receive a permit, but the applications fell short of the maximum short-term rentals allotted under the new regulations.

The city had said they expected this application process to cut the short-term rentals in half, but after the application deadline, the city did not reach its maximum of 5,400 rentals in the city. The city said there is now no reason for a lottery drawing. They are currently weeding out any applications that were duplicates, incomplete, etc., and will reopen the application for more people to apply until they reach the maximum.

The city put a cap on short-term rentals, with 5,400 in the city and about 1,100 in Mission Beach. The applications for Mission Beach short-term rentals exceeded the 1,100 limit and will now be sent to a lottery.

For property owners, this announcement is a weight lifted off their shoulders.

“I have a huge sense of relief,” owner of Nancy’s Vacation Rentals Greg Ross said in response to not having a lottery for a majority of his rental properties. “I know I won’t have to lay off my employees, I know my vendors are still going to have work to do and I will still have a business.

Ross says his company got a number each time an application was submitted, but they were very low, averaging about 100-150 applications a day. He added that he was anticipating a low number of applications after submitting his own dozens of applications.

The city, on the other hand, was surprised at the low turnout.

“I think we are a little surprised, we’ve heard from a lot of community folks, so many people for so many years that there were an invasion of short term rentals,” Councilmember Jennifer Campbell’s Chief of Staff Venus Molina said.

But this application process turned out to prove otherwise.

Ross owns Nancy’s Vacation Rentals and manages about 80 short-term rental properties — 60 of them are likely approved already, since they are in San Diego city. But now, he is awaiting the outcome of the other 20 in Mission Beach.

On the other hand, owners in Mission Beach are still awaiting their fate.

“Mission Beach has been historically a short-term rental community so it doesn’t surprise us,” Venus added.

There were more than the 1,100 allotted applications for Mission Beach short-term rentals, which means a lottery will be held.

“I feel terrible for those owners, I’m concerned for them,” said Ross, whose 20 rentals in Mission Beach are still up in the air. “I’m hopeful that most of our owners will make the cut, I don’t know what happens if they don’t. I guess it’s just hurry up and wait.”

The city plans to enforce the new regulations May 1, 2023.