Overview: Are Short-Term Rentals Allowed in San Diego?

YES, short-term rentals are allowed in San Diego, CA, but under a highly regulated framework. Short-term rentals are permitted through the city's Short-Term Residential Occupancy (STRO) Ordinance, implemented May 1, 2023. However, the city has implemented strict licensing requirements, operational caps, and comprehensive compliance standards that investors must navigate carefully.

Critical Market Reality: San Diego has implemented one of the most restrictive short-term rental frameworks in California, with:

• Strict licensing caps (1% of housing stock for whole-home rentals outside Mission Beach, 30% cap within Mission Beach)
• Non-transferable licenses (licenses cannot be transferred with property sales)
• Four-tier licensing system with different requirements and limitations
• Mandatory quarterly reporting for whole-home rentals

How to Start a Short-Term Rental Business in San Diego

Step 1: Determine Eligibility and Tier Classification

Before investing, assess your property against the STRO licensing tiers:

Tier 1 - Part-Time (20 days or less per year)

• Rented for 20 days or less annually
• No host residency requirement
• Unlimited licenses available

Tier 2 - Home Sharing (Host resides on-site)

• Rent rooms while living on-site
• Maximum 90 days absent per calendar year
• Host must reside at property at least 275 days annually
• Unlimited licenses available

Tier 3 - Whole Home (excluding Mission Beach)

• Rent entire property when not residing on-site
• Must rent minimum 90 days annually to maintain license
• Capped at 1% of city's housing stock
• Two-night minimum stay required

Tier 4 - Mission Beach Whole Home

• Same requirements as Tier 3 but specific to Mission Beach CPA
• Capped at 30% of Mission Beach housing stock
• Currently closed with waitlist system
• Two-night minimum stay required

Step 2: Property Compliance Verification

CRITICAL: Verify your property qualifies for STR use:

• PROHIBITED: ADUs, RVs, boats, commercial spaces, temporary structures
• RESTRICTED: Live/work units (only residential portion, host must be permanent resident)
• REQUIRED: Proper residential zoning and permits

Step 3: Business Structure Setup

• Host must be a natural person (LLC ownership requires individual host designation)
• Non-owner hosts must obtain Business Tax Certificate
• Only one license per host across entire city

Required Documents, Permits, Licenses, and Guidelines

Primary Licenses and Certificates

1. Short-Term Residential Occupancy (STRO) License

• Application Fees: $33-$41 depending on tier
• License Fees: $193-$1,129 depending on tier
• Validity: 2 years, non-transferable
• Application Portal: Accela Citizen Portal

2. Transient Occupancy Tax (TOT) Certificate

• Cost: FREE
• Application: Online via Transient Occupancy Registration System
• Alternative: Email completed PDF application to sdtot@sandiego.gov
• Rate: 10.5% of rental amount including cleaning fees

3. Rental Unit Business Tax (RUBT) Account

• Applies to: Properties rented more than 6 days annually
• Components: Base fee + per-unit fee
• Verification: Check OpenData RUBT Information portal

4. Business Tax Certificate (if host is not owner)

• Cost: $34 for ≤12 employees, $125 + $5/employee for ≥13 employees
• Requirement: Annual renewal mandatory
• Online Registration: Business Tax Online Registration portal

Documentation Requirements

Pre-Application Prerequisites:

• Active TOT Certificate
• Current RUBT account (if applicable)
• Proof of ownership or lease authorization
• Business Tax Certificate (non-owners only)

Ongoing Compliance Documentation:

• Host signage (8.5x11", black, bold, 20-point font)
• Human trafficking awareness training certificate
• Good Neighbor Policy posting
• Quarterly reports (Tier 3 & 4 only)
• Local contact information posting

Safety and Health Standards

• Smoke detectors, carbon monoxide detectors, fire extinguishers
• Compliance with commercial lodging health and safety codes
• Proper sanitation facilities and secure egress routes

Specific Regulations for Short-Term Rentals

Licensing Caps and Limitations

• Tier 3: Maximum 1% of San Diego's total housing units
• Tier 4: Maximum 30% of Mission Beach housing units
• Current Status (October 2025):
  • Tier 1: 145 licenses issued, unlimited remaining
  • Tier 2: 2,367 licenses issued, unlimited remaining
  • Tier 3: 4,638 licenses issued, 913 remaining
  • Tier 4: 1,097 licenses issued, 0 remaining

Operational Requirements

Host Responsibilities:

• Only one STRO license per host citywide
• Maintain posted signage with required information
• Respond to guest complaints within 1 hour
• Submit quarterly utilization reports (Tier 3 & 4)
• Complete human trafficking awareness training
• Post Good Neighbor Policy and human trafficking reporting guidance

Property Use Restrictions:

• Minimum 90 days annual utilization for Tier 3 & 4
• Two-night minimum stay (Tier 3 & 4)
• No party houses or commercial operations
• Maximum occupancy limits enforced
• Noise and nuisance control mandatory

Guest Requirements:

• Adherence to Good Neighbor Policy
• Noise ordinance compliance
• Parking restrictions
• No local contact required for Tier 1 & 2

Tax Obligations

Transient Occupancy Tax (TOT):

• Rate: 10.5% of gross rental amount
• Collection: Monthly or quarterly remittance
• Platforms may collect on behalf of hosts

Rental Unit Business Tax:

• Applies to properties rented >6 days annually
• Structure: Base fee + per-unit assessment

Business Tax Certificate:

• Required for non-owner hosts
• Annual renewal mandatory
• Based on employee count

Enforcement Mechanisms

Violations and Penalties:

• Operating without license: Immediate violation
• Non-compliance: Notice of Violation with penalties
• Pending enforcement actions block new license applications
• License revocation for repeated violations

Reporting System:

• Get It Done portal for violations
• Building and Land Use Enforcement (BLUE) team oversight
• 1-hour response requirement for local contacts

Contact Information for Local Authority

STRO Administration

• Phone: 619-615-6120
• Email: stro@sandiego.gov
• Website: City of San Diego STRO Portal

Tax Administration

Transient Occupancy Tax (TOT):

• Phone: 619-615-1530
• Email: sdtot@sandiego.gov
• Website: TOT Information

Rental Unit Business Tax:

• Phone: 619-615-1545
• Email: rtax@sandiego.gov
• Website: RUBT Information

Business Tax Compliance:

• Phone: 619-615-1539
• Email: compliance@sandiego.gov
• Website: Business Tax Portal

Enforcement Contacts

Building and Land Use Enforcement (BLUE):

• Phone: 619-533-6489
• Email: dsdstrocomplaint@sandiego.gov
• Online Reporting: Get It Done Portal

Development Services Department

• Virtual Appointments: Schedule Consultation
• Phone: 619-236-5500

Links to Source Pages

Official City Resources

• Short-Term Residential Occupancy Main Page
• STRO License Application Portal
• Transient Occupancy Tax Information
• Rental Unit Business Tax Information
• Business Tax Certificate Information

Application and Compliance Resources

• Transient Occupancy Registration System
• STRO License Application Guide
• Host Operating Requirements Checklist
• Good Neighbor Policy

Data and Reporting

• Active STRO Licenses Database
• TOT Establishments Database
• RUBT Accounts Database
• Business Tax Information Database

Legal Framework

• STRO Ordinance Full Text
• Hosting Platform Requirements
• STRO FAQ Document

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Investment Note: San Diego's STR market presents opportunities but requires careful navigation of regulatory requirements. The non-transferable license structure significantly impacts property values, and the licensing caps create scarcity that benefits existing license holders. Investors should factor these unique characteristics into their investment calculations and consider working with established local operators who understand the regulatory landscape.