San Diego Airbnb Restrictions: Turn Your San Diego Airbnb Into Profitable Long-Term Rental

It’s no secret that San Diego is one of the most desirable tourist destinations on the west coast. With nearly perfect weather, and beaches as far as the eye can see, it’s easy to see why California newcomers would seek to visit sunny San Diego. Thanks to a thriving tourism industry, some San Diego homeowners have chosen to cash in by converting their privately owned properties into vacation rentals through popular sites such as Airbnb or VRBO. During the spring and summer seasons, renting your home to out-of-towners can be particularly profitable. And if you’re fortunate enough to own an oceanfront property, you can count on the cash flowing in when the weather is warm, and beaches are buzzing. 

With summer right around the corner, some San Diego residents are prepping their properties for renting, but a newly proposed ordinance may stand in their way. The San Diego City Council has recently raised questions about capping the number of vacation rental properties. The proposed ordinance would limit the number of short-term rental properties to a mere 1% of the city’s housing supply. Whether or not your property will be allowed as a rental will be left up to a lottery system, with so-called “good actors” allowed priority. 

Details of the Short-Term Rental Ordinance

• Placing a 1% cap on entire-home, short-term rentals at 1%, per the San Diego Planning Commission.
• Reduce the city auditor’s current estimation of 14,700+ short-term vacation rentals. This includes the 1,667 estimated vacation rentals in Mission Beach.
• No limit will be placed on home-sharing short-term rentals.
• Granting part-time, short-term rental property owners access to a license at lower annual rate to accommodate events that yield a high number of visitors.
• The program will be assessed on a yearly basis to evaluate whether it’s efficient and equitable for all. 
• Rental properties will be required to have a local contact who can respond to guest disturbances within one hour or less.
• Granting short-term rental property owners a maximum of one license, per person
• Putting into place a Good Neighbor Policy that’s strictly enforced, with a set standard for violations, and rules in place to justify license revocation. 

To give San Diegans some time to make this transition, the ordinance would not actually take effect until summer of 2022. While the San Diego City Council still must meet for a final vote on the matter, widespread support among council members seems to indicate it’ll pass with ease. 

The Case For and Against Short-Term Rentals

Most San Diego homeowners who choose to lease their property as a short-term rental do so to supplement their normal income. So, it’s no surprise that some San Diegans are concerned not only for the state of their property, but also a source of their usual revenue. And with rent prices at an all-time high, taking away this extra revenue from homeowners will only add to financial insecurity among residents. 

On the opposite side of the argument, some San Diego property owners feel as though their neighborhoods have been overrun by rentals, especially areas such as Mission Beach, Pacific Beach, and Little Italy. These particular pockets of San Diego are hot spots, and are teeming with tourists during every holiday weekend, and all throughout the spring and summer seasons. But one man’s gold mine is another man’s grievance. Longtime residents are less than pleased with rental properties invaded by rowdy vacationers. Some neighborhoods have seemingly been taken over by short-term rental properties, so much so that very few homes actually have long-term residents living in them. 

How San Diego Rental Owners Can Move Forward

It’s undeniable that the real estate market is at an all time high. Offers are flowing in, homes are selling for well above asking price, and there simply aren’t enough properties to go around. And while you may feel like renting your property to out-of-towners is your best option, it may actually be more advantageous to sell your home before it’s too late. 

Though interest rates are reportedly projected to increase ever so slightly by the end of 2021, they’ll remain historically low, likely less than 4%, which will continue fueling this real estate frenzy. Because supply is limited and demand only continues to increase, prospective buyers are willing to do just about anything to procure a piece of property. In some cases, they’re submitting offers without even seeing the residence. Many offers submitted are hundreds of thousands of dollars above asking price. And when you consider some of these offers are all cash, it’s no wonder new home buyers are feeling especially discouraged in their search. While this is unfortunate for those looking to buy a home, it’s advantageous for anyone looking to sell their home for the highest return on their investment. 

San Diego vacation rental owners may soon be out of business, thanks to the proposed ordinance being bounced around the San Diego City Council. If you own a property that doubles as a short-term rental through Airbnb, VRBO, or other vacation rental hosting site, now would be the best time to sell at the top of the market, before it’s up to the county of San Diego whether your vacation rental gets to stay or go. Use our list on the Multiple Listing Service (MLS) to get your property listed on the market today!