How the Fees and Lottery Could Work to Regulate Vacation Rentals | Voice of San Diego

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How the Fees and Lottery Could Work to Regulate Vacation Rentals

Officials are set to brief the City Council Monday on an application process for vacation rental licenses, fees for licenses and the lottery process the city will use to decide which operators get licenses.  

Mission Beach / Image via Shutterstock

More than seven months ago, the City Council approved long-elusive vacation rental regulations to allow the city to limit the number of rentals and crack down on problem properties.  

At the time, city officials pledged to come back this fall to explain how those regulations will work in practice. Officials are now set to brief the City Council Monday on an application process for vacation rental licenses, fees for licenses and the lottery process the city will use to decide which operators get licenses.  

Refresher: The City Council-approved regulations cap whole-home vacation rentals rented more than 20 days annually at 1 percent of the city’s housing stock and create a licensing process and a bolstered enforcement system allowing the city to issue fines and revoke licenses. The policy would also provide an unlimited number of licenses for home-sharing operations, where the homeowner usually remains on site, and for both whole-home and home-sharing hosts who welcome guests fewer than 20 days a year. 

The Proposed Fees: City staff are proposing $1,000 fees for two-year licenses whole-home operations rented out more than 20 days a year and for properties in Mission Beach to cover the city costs tied to the new regulations, including about 14 new positions at the city. Operators who rent out their properties less than 20 days a year would pay $100 for a two-year license while home sharers who do business more than 20 days a year would pay $225 per the staff proposal. 

The Lottery: Per city staff’s recommendation, the city treasurer’s office would conduct a mostly random lottery for rentals that operate more than 20 days a year. Outside Mission Beach – where rentals are capped at a higher 30 percent of the longtime tourist mecca’s housing units – the city is planning a “stratified lottery.” There will be neighborhood-by-neighborhood lotteries that match up with the total percentage of license applications that came from each neighborhood. So if 22 percent of applications came from North Park, rental owners there would compete for a 22 percent share of city rental licenses in areas other than Mission Beach. 

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