Yes, you need a license
Since the City of San Diego's Short-Term Residential Occupancy (STRO) ordinance took effect in May 2023, any home rented for less than one month requires an STRO license. Booking platforms are required to display valid license numbers, and unlicensed listings can be removed — with fines for non-compliant owners.
The good news: for most owners the process is straightforward once you know which tier you fall into.
The four STRO license tiers
Tier 1
Part-Time
Whole-home rentals for 20 days or fewer per year. No cap on licenses — most owners qualify easily.
Tier 2
Home Sharing
Rent a room (or rooms) more than 20 days per year while you live onsite. No cap on licenses.
Tier 3
Whole-Home (Citywide)
Whole-home rentals more than 20 days per year, outside Mission Beach. Licenses are capped at roughly 1% of the city's housing stock and allocated by lottery.
Tier 4
Mission Beach
Whole-home rentals in Mission Beach, which has its own larger allocation (roughly 30% of the community's units) reflecting its long vacation-rental history.
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The taxes you'll pay
Short-term rental income in San Diego is subject to Transient Occupancy Tax (TOT), collected on each stay, plus a Rental Unit Business Tax. Some platforms collect and remit TOT automatically, but the legal responsibility for compliance stays with the owner — a common and expensive surprise for first-time hosts.
Good-neighbor requirements
STRO licenses come with operating conditions, including:
- A designated local contact who can respond to complaints quickly
- Posting the license number on all listings and advertisements
- Noise, trash, and parking standards for guests
- Keeping guest records available for city review
Violations can mean fines or losing your license — which, for capped Tier 3 licenses especially, is not something you want to risk.
How to get licensed: 5 steps
1. Confirm your tier
Decide how many nights per year you'll rent and whether you'll live onsite.
2. Get a Transient Occupancy Tax certificate
Register with the City Treasurer before applying for your STRO license.
3. Apply for your STRO license
Tier 1 and 2 licenses are typically issued without a cap. Tier 3 and 4 applications enter the city's allocation process when licenses are available.
4. Set up compliant operations
Local contact, noise monitoring, guest screening, trash plan, and record keeping — this is where most self-managing owners get tripped up.
5. List, price, and launch
Professional photography, dynamic pricing, and multi-channel listings (Airbnb, VRBO, direct booking) determine whether you earn average revenue or top-of-market revenue.
Or skip the homework entirely
This is exactly what a full-service property manager is for. Sunset Stays' luxury property management team handles licensing support, tax compliance, good-neighbor requirements, guest screening, and 24/7 operations — owners see a 23% average revenue increase in the first year, with none of the compliance workload.
Frequently asked questions
Do I need a license to rent my San Diego home on Airbnb or VRBO?
Yes. Under the City of San Diego’s Short-Term Residential Occupancy (STRO) ordinance, any dwelling rented for less than one month requires an STRO license. Listings without a valid license number can be removed and owners can face fines.
What are the four STRO license tiers?
Tier 1 covers part-time whole-home rentals of 20 days or fewer per year. Tier 2 covers home sharing where the host remains onsite. Tier 3 covers whole-home rentals over 20 days per year outside Mission Beach and is capped by lottery. Tier 4 covers whole-home rentals in Mission Beach, which has its own higher cap.
What taxes do San Diego short-term rental owners pay?
Short-term rental stays in the City of San Diego are subject to Transient Occupancy Tax (TOT) plus a Rental Unit Business Tax. Platforms like Airbnb collect some taxes automatically, but owners are responsible for ensuring full compliance.
How much could my San Diego property earn as a short-term rental?
Earnings vary widely by neighborhood, size, and quality — beach-area homes in Mission Beach, Pacific Beach, and La Jolla typically command the highest nightly rates. You can get a free instant estimate with our rental income estimator at booksunsetstays.com/rental-estimator.
Can a property manager handle STR licensing and compliance for me?
Yes. A full-service luxury property manager like Sunset Stays handles licensing support, tax compliance, good-neighbor requirements, guest screening, and 24/7 operations so owners stay compliant without the day-to-day work.