Faulconer’s short-term rental proposal includes ‘good neighbor’ policy

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SAN DIEGO - San Diego Mayor Kevin Faulconer proposed short-term rental regulations Thursday that include mandatory licensing, a "good neighbor" policy and fees to fund code compliance and affordable housing projects.

Short-term vacation rentals, offered through platforms such as Airbnb and VRBO, have vexed residents and city officials alike for several years. So far, the City Council has been unable to pass a regulatory framework for home- sharing.

Rental properties provide owners a revenue stream in high-cost cities and they give visitors an alternative to expensive coastal hotels. However, neighbors have complained in recent years that short-term rentals can alter a neighborhood's character with over-crowding and disruptive guests.

Under Faulconer's proposal, all rentees would be required to register with the city, and those with dwellings of five or more bedrooms would need to acquire a neighborhood use permit. There would be a two-license maximum per host: one for a primary residence and another for a secondary home.

There would be no license limits in Mission Beach, however. Faulconer said short-term rentals are already part of that community's history and character.

All coastal and downtown communities would require three-night minimum stays.

Homeowners would be required to continue paying transient occupancy taxes, and they would pay an additional $2.76 per rental night, which would generate roughly $3 million annually to be spent solely on affordable housing projects.

Those who offer whole-home rentals when the owner isn't present would also pay a $947 annual fee.

Owners would have to provide guests with a list of rules to ensure good behavior. The policy would be enforced by 16 new staff members across the Code Enforcement Division, Treasurer's Office, City Attorney's Office and San Diego Police Department.

Signs with owner contact information would be posted outside of each rental property in case of a complaint; the contact would be required to respond to an incident within one hour.

The City Council is expected to vote on the proposal July 16. After several failed starts by city officials, Faulconer said his proposal strikes a balance for stakeholders.

"The home-sharing economy and protecting our neighborhoods' quality of life -- that can co-exist," he said. "This is all about a compromise to get clear rules of the road to move this issue forward. And this is the fair plan our neighborhoods deserve."

Under the proposal, rental platforms would be required to ensure hosts are registered with the city. They would also gather TOT and affordable housing fees at the same time rent is collected.

If approved, licensing would begin October 2019, in order to provide time to hire staff and set up systems. Full compliance would be required by January 2020.


A complaint hotline or mobile application would be created to report violations, which would be addressed by compliance and police officers working nights and weekends.

Officers would issue warnings and citations from $500 to $1,000, or more for "repeated, egregious violations."

License and fees would be expected to cover the cost of new compliance personnel.

“This will create not only clear rules of the road for guests, clear rules of the road for the hosts as well as set the expectations for the platforms like Airbnb that they can only list those folks licensed with the City of San Diego,” said Elyse Lowe, Director of Land Use & Economic Development Policy.

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