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Time is running out to apply for San Diego's short-term vacation rental license lottery

Hosts that rent their whole homes out to visitors in the city of San Diego have to apply for a license by Nov. 30 at 5 p.m. Then, they'll have to wait to see if they get chosen in a city-run lottery.

“Well everybody is worried because nobody knows. It feels like luck of the draw,” Paul Becker said.

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He’s the president of Bluewater Vacation Homes, a San Diego company that manages vacation rentals.

Becker is concerned how the new ordinance will limit whole-home rentals to 1% of the city’s total 540,000 housing units.

“I don't think that cutting this off is the way to go. I think what they should have done is grandfather in and get to that cap over time through attrition,” he said.

The lottery system gives the highest priority to “good actors:” longer-tenured rental operators who have no code violations over the last two years.

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Becker said enforcement is the first challenge, and the second is "making sure that there's not neighbors that are NIMBYs that don't want short term rentals no matter what. There's been false complaints, there's been a lot of challenges that we've had.”

Vacation rental hosts who plan to rent their entire home more than 20 days out of the year will find out if they were chosen to get a license by Dec. 16.

Those who operate vacation rentals less than 20 days a year or rent out only part of their home while present still have to get a license, but will not be part of the lottery system.

The city of San Diego said that enforcement can include warnings, citations of up to $1,000 and civil penalties of up to $10,000 per violation. In a written statement, the city also warned, "Unpaid penalties or continuing violations may also result in a property lien with the County of San Diego.”

Before beginning the application process, hosts need an active Transient Occupancy Tax certificate and to make sure all Rental Unit Business Taxes are in active paid status.

Becker said the new regulations could impact the region’s tourism industry. “I think if the enforcement was done before we got to this point we would be in a much better position, rather than cutting property rights and cutting off potential short term rentals for guests coming to San Diego.”

All licenses will be valid for a two-year period.

Enforcement of unlicensed or improperly licensed properties operating as a Short-Term Residential Occupancy in the City of San Diego will begin on May 1, 2023.