Planning to buy a San Diego condo and rent it by the night? Before you count on that income, two rulebooks apply: the City of San Diego's short-term rental licensing, and your building's HOA rules. Here's what each one says, in plain language, with links to the official sources.
- Renting a home for less than one month in the City of San Diego requires a license [1].
- Whole-home licenses outside Mission Beach (Tier 3) are capped. As of Oct 9, 2026, 802 remained citywide [1].
- A host can hold only one license, and licenses don't transfer to a buyer [1].
- Your HOA can lawfully ban rentals of 30 days or less [2].
What counts as a "short-term rental" in San Diego?
The City calls it short-term residential occupancy (STRO): renting a home, or part of one, for less than one month. Since May 1, 2023, operating a STRO without a city license has been unlawful. The rules apply to every dwelling in the City of San Diego regardless of zoning [1].
The four license tiers
| Tier | What it allows | Key limits |
|---|---|---|
| Tier 1 Part-time | Short-term rental for 20 days or less per year in total | Host doesn't need to live on-site |
| Tier 2 Home sharing | Renting rooms for more than 20 days a year while the host lives on-site | Host may be away during whole-home stays for up to 90 days per calendar year |
| Tier 3 Whole home (outside Mission Beach) | Whole-home rentals for more than 20 days a year, with the host not on-site | Capped at 1% of the city's housing units outside Mission Beach. Must be used at least 90 days a year. Two-night minimum stay. |
| Tier 4 Mission Beach whole home | Whole-home rentals in Mission Beach | Capped at 30% of Mission Beach housing units. Waitlist application period closed. |
Source: City of San Diego, Office of the City Treasurer [1].
The numbers that matter (as of October 9, 2026)
| License | Issued | Remaining | Fees (application + license) |
|---|---|---|---|
| Tier 1 | 135 | Unlimited | $33 + $193 |
| Tier 2 | 2,336 | Unlimited | $33 + $284 |
| Tier 3 | 4,859 | 802 | $41 + $1,129 |
| Tier 4 | 1,099 | 0 | $41 + $1,129 |
Licenses expire two years after they're issued and can be renewed. Fees are non-refundable [1].
Five rules that surprise investors
- Licenses don't come with the property. They aren't transferable between hosts, owners, or units, so a condo that "already has a license" doesn't pass it to you [1].
- One host, one license, one unit. A host must be a natural person (not an LLC), may hold only one license at a time, and may operate only one unit at a time [1].
- 21 to 89 days a year isn't allowed. More than 20 days of whole-home rental needs a Tier 3 or 4 license, and those must be used at least 90 days a year, with quarterly reports to the City [1].
- ADUs are generally off-limits. Accessory dwelling units can't be used for short-term rental, except companion units permitted before October 15, 2017 [1].
- Taxes come first. You need an active Transient Occupancy Tax certificate and a paid Rental Unit Business Tax account before you can apply [1].
The HOA layer: what California law allows
For condos, the city license is only half the picture. Under California Civil Code §4741, an HOA generally cannot prohibit or unreasonably restrict owners from renting their units, and cannot cap rentals below 25% of the units. It can, however, adopt and enforce rules that prohibit transient or short-term rentals of 30 days or less [2].
In practice, read the CC&Rs and any rental rules, and ask the HOA for its current rental policy in writing, before you remove contingencies.
How we'd underwrite a San Diego condo
Underwrite on a 12-month lease as the base case. Treat short-term income as upside only after (1) the HOA allows it in writing and (2) a license is actually issued to you. If the deal only works at nightly rates, it's a speculation on licensing, not an investment.
A practical checklist before you write an offer:
- Confirm the property is inside the City of San Diego. Neighboring cities have their own rules.
- Get the CC&Rs, rental rules, budget, reserve study, and recent board minutes.
- Check current Tier 3 availability on the City's STRO page [1].
- Model the deal on long-term rent, HOA dues, taxes, insurance, and a vacancy allowance.
- Ask your lender how it treats rental income for the loan you're considering. For investor rentals, a DSCR loan qualifies on the property's cash flow rather than your personal income.
Talk it through. Brenda Le Jones, Founder & Principal Broker, USIG LLC (CA DRE #01365151) — (657) 222-9788. For deeper analysis, try the Residential Investment Analyzer — free 7-day trial, no credit card required to sign up.
Sources
- City of San Diego, Office of the City Treasurer — Short-Term Residential Occupancy (STRO), updated October 9, 2026. Full ordinance: SDMC Chapter 5, Article 10, Division 1.
- California Legislative Information — Civil Code §4741 (amended by AB 1584, effective January 1, 2022).
Accessed October 23, 2026. This article is general information, not legal or tax advice. Rules and license counts change, so confirm with the City and a qualified professional before relying on them.
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