The Mayor Faulconer Proposed Compromise on Short Term Rentals

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    pr With the goal of reaching a solution that allows the home-sharing economy to grow while protecting quality of life in San Diego’s neighborhoods, Mayor Kevin L. Faulconer today announced a new set of proposed regulations on the short-term residential occupancy (STRO) industry that will be considered by the City Council next month.

    Mayor Faulconer’s proposal would create the City’s first license-based system to manage short-term rentals; charge cost-recoverable fees to administer licenses and enforce code violations; establish a “Good Neighbor” policy to preserve neighborhood quality of life; hire additional staff to respond to complaints about nuisance properties; and implement a per-night fee that would generate an estimated $3 million annually for affordable housing projects.

    “This is a balanced approach that establishes clear rules of the road for short term rental hosts and guests while protecting neighborhood quality of life through increased oversight and enforcement,” Mayor Faulconer said. “This is a fair compromise that allows the home-sharing economy and our neighborhoods to co-exist and gives everyone clarity moving forward. I look forward to working with the City Council on passing these proposed regulations.”

    BALANCED PROGRAM WITH CLEAR RULES

    Mayor Faulconer’s proposal controls STRO use by requiring an annual license for rentals when the host is not present (known as a “whole home” rental) and allows a host to have guests when they are physically present (known as a “home share” rental) without a license year-round for stays of less than one month.

    “The heart of the compliance angle lies within the good neighbor requirements provided to each guest for each visit. The policy outlines expectations for behavior during each stay so guests maintain respect for neighbors,” said Bob Vacchi, the City’s Development Services Department Director.

    A maximum of two licenses can be issued to a host – one for their primary residence and one additional license for a secondary residence. There are no limitations, however, on the number of licenses available to hosts within Mission Beach given the long history of vacation rentals and unique character of the community. Regulations would require a three-night minimum stay for coastal and downtown communities. Units with five or more bedrooms will first be required to obtain a Neighborhood Use Permit from the Development Services Department.

    All hosts are required to:

    • Register with or be licensed annually by the City
    • Secure a Transient Occupancy Tax (TOT) certificate
    • Pay TOT and the Affordable Housing Impact fees monthly
    • Obtain a Neighborhood Use Permit for dwellings with five or more bedrooms
    • Advertise a STRO license number on all advertisements
    • Comply with “Good Neighbor” policies, including posting local contact information on property
    • Collect and maintain detailed records on each STRO transaction for a period of three years

    All platforms are required to:

    • Provide notice of the STRO and TOT requirements to each host prior to their listing
    • Collect TOT and Affordable Housing Impact fees at the same time rent is collected
    • Ensure only licensed or registered hosts are using the booking service on the hosting platform
    • Collect and maintain detailed records on each STRO transaction for a period of three years

    ENFORCEMENT, COMPLIANCE AND NEW ONLINE TOOL FOR COMPLAINTS

     Mayor Faulconer is committed to active enforcement to ensure hosts, guests and online platforms for short-term rentals are in compliance with the proposed regulations. The Mayor’s plan calls for a new team of police and code enforcement officers to work evenings and weekends to address code complaints. The proposal would also create a license and registration system that interfaces with City databases, and the creation of a complaint hotline or mobile application for residents to report violations.

    “The San Diego Police Department will work hand-in-hand with Code Enforcement Officers to ensure active and proper enforcement of the proposed regulations,” said Assistant Police Chief Albert Guaderrama“These new rules will allow us to keep nuisance properties in check and improve the quality of life in our neighborhoods.”

    Enforcement is based on an inter-departmental strategy that includes the Code Enforcement Division, the City Treasurer’s Office, the City Attorney’s Office and the San Diego Police Department (SDPD).

    The enforcement program will:

    • Maintain a database of all licensed or registered STRO locations within the City Treasurer’s Office that will provide information to the SDPD.
    • Issue notices of violations, administrative citations, fines and revocation of licenses.
    • Create a STRO Code Enforcement, SDPD and City Attorney team for proactive enforcement in the areas with most frequent violations. The team will work evenings and weekends to target disturbances.
    • Monitor websites to ensure hosts are paying TOT; violators will be reported to the City Attorney.
    • Receive complaint calls 24-hours per day, seven days per week; an online portal will be created to report violations.
      • First notice of violation is considered a “warning”
      • Second notice of violation may result in citation
      • Third notice of violation within 12-month period may result in revocation of STRO permit

    SUPPORTING AFFORDABLE HOUSING

     The proposal also includes a new Affordable Housing Impact Fee of $2.76 per rental night, paid for by hosts. Implementation of the fee is expected to generate $3 million per year for the Affordable Housing Fund, which is administered by the San Diego Housing Commission and is used to pay for affordable housing-related projects.

    The City Council will consider the Mayor’s STRO proposal at a hearing scheduled on Tuesday, July 16, at noon. For more information, visit www.sandiego.gov/STRO.

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