SAN DIEGO – San Diegans have to turn in applications to get a short-term rental license by Wednesday at 5 p.m. The city is having a lotto system and will hand out only 6,500 spots for those looking to rent out their home for more than 20 days a year.

As the sun sets on the City of San Diego’s application for a Short-Term Residential Occupancy or STRO application license, landlord and owner of Nancy’s Vacation Rentals in San Diego, Greg Ross, now sits with uncertainty of the future of his business.

“This is a commercial visitor zone and we thought we’re safe from regulations, and I would have to sell. I specifically bought this property because I thought it was going to be safe from regulations,” Ross said.  

New regulations set in place by city suggest otherwise. Landlords like Ross must soon have a license in order to rent out an entire house for more than 20 days a year, cutting the city’s current home vacation rentals in half.

“Now we’ve put a cap on whole home rentals and a cap is 5,400 for the city, 1% of the city’s residences. For Mission Beach, they asked us if they can have a cap of 30% because they were at 6% whole home rentals,” Councilmember Jennifer Campbell explained to FOX 5 in a former interview. Mission Beach’s cap stands at 1,100.

Campbell suggests the cutbacks not only improve the quality of life for neighbors, but also help the long-term renter, giving more housing back to the people of San Diego. 

One expert suggests the new ordinance won’t increase the likelihood of housing.

“I don’t see how that increases the likelihood of someone getting housing. That’s really for someone coming to San Diego to vacation. We’re really talking about the people that rent their homes out and make a little extra money renting it out for a weekend at PB or week in Coronado or two weeks here in there. That doesn’t really speak to the people who are really looking for affordable housing…,” said Gerry Burchard, a realtor with Urban Pacific Realty.

Following Wednesday’s deadline, the fate of Ross and applicants alike will be governed by a lottery system prioritized by what the city calls “good actors” to determine who gets to offer properties for whole-home vacation rentals.

“It’s really organizing those landlords that are making some money on Airbnb and VRBO and the city is saying we want to know who is doing it, we want a piece of the action, we want to tax it, and we want to organize it,” Burchard said.

Landlords argue the lottery system is unfair and ignores their attempts of being a good neighbor and business owners to the San Diego community and beyond.

On the other hand, life-long Mission Beach resident Chris Harton says his hometown no longer feels like home.

“Where you had neighbors and families living, you have people coming for a night or two and then leaving,” Harton said.

Ross, who also owns property in Mission Beach, worries what the cap will mean for the economy as a whole.

“I’m going to have to lay off people, going to have to lay off the cleaners. The main economy here is vacation rentals here in Mission Beach because there really are a few hotels,” Ross explained.

As of Wednesday, the application period for all Short-Term Rental Occupancy or STRO license tiers will close. A host can apply for one of four STRO tiers: Part-Time, Home Sharing, Whole-Home and Mission Beach Whole Home. The license application period for tiers three and four will close on Nov. 30, 2022 at 5:00 p.m. Tiers one and two will remain open indefinitely.

All submissions will then be put into a lottery following the deadline. As for whoever ends up getting a license, they should know by Dec. 16.