San Diego County, California Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in San Diego County, California?

Short-term rentals through platforms like Airbnb and VRBO have become increasingly popular in San Diego County. However, there are a number of regulations that hosts must follow in order to legally operate a short-term rental business. Here's an overview of the key rules and requirements.

Starting a Short-Term Rental Business in San Diego County

To legally operate a short-term rental (defined as a rental for less than 1 month) in the City of San Diego, hosts must:

• Obtain a Transient Occupancy Registration Certificate and collect and remit Transient Occupancy Tax (TOT). This applies to all types of short-term rentals, whether rented directly by the owner, through a property management company, or via an online platform.
• Pay annual Rental Unit Business Tax if renting the property for more than 6 days in a calendar year.
• Obtain a STRO license starting May 1, 2023. The license fee is $250 and must be renewed annually.

Hosts are limited to operating only one short-term rental unit at a time in most areas of the city. The total number of whole-home rentals available for over 20 days per year is capped at 1% of the city's housing stock (around 5,400 units total).

Mission Beach has a higher cap - 30% of housing units can be short-term rentals there due to its popularity with tourists.

The city has established a new enforcement division to ensure compliance with the regulations. Fines for violations start at $1,000.

Some property owners have found ways to obtain multiple short-term rental licenses, such as by designating proxy hosts who have the "right to occupy" the unit. However, the city intended the rules to allow only one license per person in most cases.

Over 1,300 short-term rental licenses are still available under San Diego's cap as of July 2023, so the new regulations seem to be accomplishing the goal of limiting the total number of vacation rentals in the city.

Hosts who don't want to manage short-term rentals themselves can hire a property management company to handle bookings, cleanings, and guest communications. The property manager can also serve as the required "local contact" to respond to any neighborhood complaints within one hour.

In summary, while it takes some work to get properly licensed and set up, operating a short-term rental business is still very much possible in San Diego under the new regulations. The key is understanding and closely following all the requirements.

Short-Term Rental Licensing Requirements in San Diego County

Unlike the City of San Diego, the County of San Diego does not require a business license for short-term rentals located in unincorporated areas of the county. These unincorporated communities include:

Alpine, Bonsall, Bonita (91902), Borrego Springs, Boulevard, Campo, Crest, Cuyamaca, Dehesa, Descanso, Dulzura, Fallbrook, Granite Hills, Harbison Canyon, Hidden Meadows, Jacumba, Jamul, Julian, Lake Morena, Lakeside, Pala, Pauma, Pine Valley, Potrero, Rainbow, Ramona, Rancho Santa Fe, Rancho San Diego, San Dieguito, Spring Valley, Sweetwater, Tecate, Twin Oaks Valley, Valle de Oro, Valley Center, and Warner Springs.

However, short-term rental operators in these areas must still follow all other applicable rules and regulations for their business. This may include obtaining any necessary permits, following zoning ordinances, and paying transient occupancy taxes.

Cities within San Diego County have their own licensing and permit requirements for short-term rentals. Hosts should check with the specific city where their rental is located for detailed requirements. For example:

1. The City of Carlsbad requires all short-term rental operators to have a valid business license.
2. Encinitas requires hosts to submit a short-term rental permit application annually for each rental unit. Permit application fees are non-refundable.
3. Oceanside and Carlsbad collect city-specific transient occupancy taxes on Airbnb reservations.

Failing to comply with a city's short-term rental ordinances can result in fines, penalties, and legal action against the property owner. Potential consequences vary by city.

In summary, while San Diego County itself does not require licenses for short-term rentals in unincorporated areas, hosts must still follow all other applicable regulations. Individual cities within the county have established their own licensing and permitting requirements that short-term rental operators must adhere to. Researching and complying with local city ordinances is critical for hosts.

Required Documents for San Diego County Short-Term Rentals

The specific documents required to operate a short-term rental vary depending on the city within San Diego County where the property is located. Here is an overview of common requirements:

Business License/Permit: Many cities, such as Carlsbad, require short-term rental operators to obtain a valid business license or permit from the city. This registers your rental business with the local government.

Transient Occupancy Tax (TOT) Certificate: If you are renting out your property for periods less than one month, you must register for a TOT certificate with the city. This allows you to collect and remit the required occupancy taxes from guests. Some platforms like Airbnb may collect and remit these taxes on your behalf in certain cities.

Short-Term Rental Permit: Some cities, like Encinitas, require an annual permit specifically for short-term rentals. You must submit an application, pay a fee, and renew the permit each year. The permit ensures your rental meets all local regulations.

Property Management Agreement: If you use a property manager or management company to handle your short-term rental, you may need to provide a copy of the management agreement to the city. This documents the responsible party for the rental operations.

Liability Insurance: While not always required by law, it is highly recommended to have liability insurance that specifically covers short-term rental operations. You may need to provide proof of insurance to the city or your hosting platform.

Government-Issued ID: Some cities require proof of host identity, such as a driver's license or passport, as part of the permit or license application process. This verifies that the host is a real person who can be held accountable.

Proof of Ownership or Right to Rent: You may need to provide a property title or lease agreement showing you have the legal right to rent out the property on a short-term basis. Some cities do not allow renters to sublease without explicit permission.

Check with your specific city for detailed requirements, as they vary across the county. Most cities have information on short-term rental regulations available on their websites, often under the planning, zoning, or development services departments. Be sure to submit all required documents and fees to the correct city office to obtain your license or permit.

San Diego County Short-Term Rental Taxes

Short-term rental operators in San Diego County must collect and remit several types of taxes:

Transient Occupancy Tax (TOT): This is a tax on short-term rentals less than one month. The TOT rate for properties in unincorporated areas of San Diego County is 8% of the rent. The tax must be collected by the operator from the guest and remitted to the County Treasurer-Tax Collector's Office on a quarterly basis.

Tourism Marketing District (TMD) Assessment: The City of San Diego levies an additional 2% TMD assessment on short-term rentals of less than one month. This assessment funds tourism promotion efforts. It is collected along with the TOT.

Rental Unit Business Tax: Property owners who rent out all or a portion of their property for more than 6 days in a calendar year must pay an annual Rental Unit Business Tax to the City of San Diego. The amount varies based on the number of units rented.

Personal Income Tax: Short-term rental income is taxable and must be reported on your federal and state income tax returns. The tax rate depends on your total taxable income for the year.

Incorporated cities within San Diego County may charge their own transient occupancy taxes in addition to the County TOT. For example, the City of San Diego's TOT rate is 10.5%.

Cleaning fees are subject to TOT and TMD taxes if they are a non-refundable charge to the guest. Refundable security deposits are generally not taxable.

Deductions and Write-Offs

Short-term rental operators can deduct many of their expenses to reduce their taxable rental income. Potential tax deductions include:

1. Mortgage interest
2. Property taxes
3. Rental unit maintenance and repairs
4. Utilities paid by the host
5. Host service fees charged by platforms like Airbnb
6. Depreciation on the rental property
7. Supplies, linens, and other consumables for guests
8. Insurance for the rental activity

Consult with a tax professional to determine which deductions apply to your specific situation and how to maximize your write-offs. Proper expense tracking is key.

In summary, San Diego County short-term rentals are subject to transient occupancy taxes, tourism assessments, business taxes, and income taxes that can add up to a significant percentage of the rent. However, many of the expenses incurred in running a short-term rental are tax deductible.

California Wide Short-Term Rental Rules

While many short-term rental regulations are set at the city or county level in California, there are a few state laws that San Diego County hosts need to be aware of:

TOT Collection: The California Revenue and Taxation Code (Section 7280) authorizes cities and counties to collect transient occupancy taxes (TOT) on short-term rentals. San Diego County's TOT rate is 8% for rentals in unincorporated areas. Hosts are responsible for collecting this tax from guests and remitting it to the county, unless the booking platform like Airbnb collects it on their behalf.

Business Licenses: California requires all businesses, including short-term rentals, to have the necessary licenses and permits. San Diego County itself does not require business licenses for STRs in unincorporated areas, but individual cities within the county may have their own licensing requirements that hosts must follow.

Rental Agreements: California Civil Code (Sections 1940.20 and 1954.603) mandates that short-term rental hosts provide guests with a rental agreement spelling out the terms of the stay, including the nightly rate, occupancy limits, and house rules. The agreement must be signed by both the host and guest.

Fire Safety: The California Fire Code (Section 320) requires all short-term rentals to have working smoke alarms, carbon monoxide detectors, and fire extinguishers on the property. Hosts must also provide guests with an emergency exit plan.

ADA Compliance: The California Fair Employment and Housing Act requires that short-term rental hosts do not discriminate against guests on the basis of race, religion, disability, and other protected characteristics. Hosts should be aware of Americans with Disabilities Act (ADA) requirements for accessibility if applicable to their rental.

Insurance: While not legally required, California strongly recommends that short-term rental hosts carry liability insurance to protect themselves in case a guest is injured on the property. Certain hosting platforms provide some coverage, but hosts should review the terms carefully.

It's important to note that these state-level regulations are in addition to any rules set by San Diego County or the specific city where the short-term rental is located. Hosts are responsible for understanding and complying with regulations at all levels of government.

Does San Diego County Strictly Enforce STR Rules?

Based on discussions from hosts on forums like Reddit and Bigger Pockets, it appears that San Diego County has become much stricter in enforcing short-term rental regulations in recent years, especially after the new licensing system went into effect in May 2023. The county is no longer as Airbnb-friendly as it used to be.

The City of San Diego in particular has cracked down on unlicensed rentals. Since the new rules took effect, the city has removed thousands of illegal Airbnb listings, issued tens of thousands in fines to non-compliant hosts, and has open cases investigating hundreds of properties for violations. The city is actively responding to complaints submitted by residents about unlicensed rentals or nuisance issues.

However, some hosts are still finding loopholes to operate STRs despite the rules. Tactics include using fake license numbers, naming friends or family members as proxy "hosts" to get around the license limits, or simply not registering and hoping to fly under the radar. But the city seems to be investigating many of these cases when reported.

Overall, while there are still some scofflaws, San Diego County and especially the City of San Diego appear to be strictly enforcing the new short-term rental regulations now. Hosts can no longer operate with impunity like they could a few years ago. The county has definitely shifted to a less Airbnb-friendly stance in an effort to crack down on STRs and preserve housing for long-term residents. Operating an unlicensed short-term rental in San Diego today comes with a real risk of fines and legal action.

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

Starting a short-term rental business in San Diego County requires careful planning and adherence to local regulations. Follow these steps to successfully launch your rental:

Research local regulations: Familiarize yourself with the specific short-term rental rules for the city where your property is located. Requirements vary across the county, so it's crucial to understand the regulations that apply to your property. Check the city's website or contact their planning department for detailed information on permits, licenses, and zoning restrictions. Stay up-to-date on any changes to local laws that may impact your rental business. Regulations can change frequently, so regularly review city and county websites for updates.

Obtain necessary permits and licenses: Apply for the required permits and licenses based on your property's location and rental tier. In the City of San Diego, this includes a Transient Occupancy Registration Certificate, a Short-Term Residential Occupancy (STRO) license, and potentially a Rental Unit Business Tax certificate. Other cities in the county may have different requirements. Begin the application process early, as it can take several weeks or months to receive approval. Ensure all application materials are complete and accurate to avoid delays.

Register for tax collection: Register with the appropriate tax authorities to collect and remit transient occupancy taxes (TOT) and tourism marketing district (TMD) assessments, if applicable. In some cases, hosting platforms like Airbnb may collect and remit these taxes on your behalf, but it's your responsibility to ensure compliance. Keep detailed records of all tax payments and filings. Consult with a tax professional to ensure you are meeting all tax obligations and maximizing deductions.

Prepare your property: Ensure your rental meets all safety requirements, such as smoke detectors, carbon monoxide alarms, and fire extinguishers. Furnish and equip the space to provide a comfortable and inviting experience for guests. Consider hiring a professional photographer to showcase your rental in the best light. Focus on creating a unique and memorable experience for guests. Highlight local attractions, provide thoughtful amenities, and create a detailed house manual to help guests feel at home.

Create a listing: Choose a hosting platform like Airbnb or VRBO and create a compelling listing that accurately represents your property. Craft an enticing description, highlight unique features, and set competitive rates. Be transparent about any rules or restrictions, such as occupancy limits or quiet hours. Research similar listings in your area to ensure your pricing is competitive. Consider adjusting rates based on seasonality and demand to maximize occupancy and revenue.

Manage your rental: Establish systems for handling bookings, guest communication, cleaning, and maintenance. You can choose to manage the rental yourself or hire a property management company to handle day-to-day operations. Respond promptly to guest inquiries and prioritize providing excellent customer service. Automate as much of the rental process as possible, such as using smart locks for self-check-in or scheduling regular cleanings between guests. This will save you time and ensure a consistent experience for guests.

Comply with ongoing regulations: Regularly review local laws and ordinances to ensure your rental remains compliant. Renew permits and licenses as required, maintain accurate tax records, and address any neighbor complaints or issues promptly. Failure to comply with regulations can result in fines and legal consequences. Join local host communities or industry associations to stay informed about regulatory changes and best practices. These groups can provide valuable support and resources as you navigate the short-term rental landscape.

By following these steps and prioritizing compliance and guest satisfaction, you can successfully launch and operate a short-term rental business in San Diego County.

Who to Contact in San Diego County about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in San Diego County, here are some key contacts and resources:

City of San Diego

For properties within the City of San Diego, contact:

Development Services Department

1. Phone: (619) 446-5000
2. Email: dsdweb@sandiego.gov

Short-Term Residential Occupancy (STRO) program

1. Email: dsdstrocomplaint@sandiego.gov
2. Phone: (619) 533-6489

County of San Diego (Unincorporated Areas)

For properties in unincorporated areas of San Diego County, contact:

Department of Planning & Development Services

1. Zoning Information: (858) 694-8985
2. Code Compliance: (858) 694-2705

Housing and Community Development Services

1. Phone: (858) 694-4801
2. Toll Free: (877) 478-5478

Other Cities in San Diego County

For properties in other incorporated cities within San Diego County (e.g. Carlsbad, Oceanside, Chula Vista, etc.), contact that specific city's planning, zoning, or development services department directly. Check the city's website for the appropriate contact information.

Online Resources and Communities

1. City of San Diego STRO program
2. San Diego County Planning & Development Services
3. Airbnb Help Center - San Diego
4. BiggerPockets San Diego Short-Term Rental Forum
5. Reddit r/AirBnB_Hosts San Diego discussions

These government agencies can provide the most up-to-date and authoritative information on short-term rental rules. The online forums and communities are also great places to connect with other local hosts, ask questions, and share experiences navigating the regulations in San Diego County.

What Do Airbnb Hosts in San Diego County on Reddit and Bigger Pockets Think about Local Regulations?

Airbnb hosts in San Diego County have mixed feelings about the local short-term rental regulations, according to discussions on Reddit and BiggerPockets forums. Here are some key takeaways:

Frustration with New City of San Diego Rules: Many hosts expressed frustration and concern when the City of San Diego passed strict new regulations in 2022 that limited STRs to only the host's primary residence and capped the number of whole-home rentals. Some felt the city was unfairly blaming hosts for housing affordability issues. However, others supported the changes as a way to crack down on "mini-hotels" and preserve neighborhood character.

Considering Switching to Long-Term Rentals: With the new San Diego city rules making STRs more difficult, some hosts on Reddit debated whether it made more sense to convert their properties to long-term rentals instead. Factors in the decision included potential rental income, wear and tear on the property, and the hassle of complying with STR regulations.

Navigating County Zoning Codes: Aspiring hosts on BiggerPockets sought advice on how to comply with San Diego County's complex zoning rules for STRs, particularly for properties with accessory dwelling units (ADUs) or junior ADUs. The consensus was that the regulations are complicated and vary by area, so it's important to research the specific rules for your property.

Exploring Neighboring Cities: Some hosts looked to neighboring cities in San Diego County with less restrictive STR rules as an alternative to operating in the City of San Diego. Carlsbad, Oceanside, and Escondido were mentioned as potential options, though hosts cautioned that regulations can change quickly.

Hiring Property Management: Several San Diego hosts on BiggerPockets recommended hiring a local property management company to handle STR operations, especially for hosts who travel frequently or live out of the area. This can help ensure compliance with local rules and provide peace of mind.

Overall, San Diego County hosts seem to be adapting to the evolving regulatory landscape, but there is definitely some frustration and uncertainty. The key themes are doing thorough research on local rules, considering alternative rental strategies, and seeking support from property managers or host communities.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.