On Monday, July 16, San Diego City Council nixed Mayor Kevin Faulconer’s short-term vacation rental proposal by a 6-3 tally, then voted 6-3 for a more-restrictive proposal favoring residents and allowing primary-residence-only rentals with a six-month maximum.
The landmark counterproposal was co-authored by Council members Barbara Bry of District 1 and Lorie Zapf of District 2, whose coastal districts have a preponderance of short-term rentals.
Dissenting votes were cast by Council members Scott Sherman, Chris Cate and David Alvarez.
A “carve-out” of Mission Beach in the mayor’s proposal was defeated. Existing Mission Beach rentals will also not be grandfathered into the city’s new ordinance. Mission Beach has the highest number of short-term rentals — upwards of 40 percent — along the beachfront.
A cornerstone of Faulconer’s proposal, the so-called “plus one” provision allowing people to rent out their own residence, and one additional place, was also denied. In its place was inserted a condition allowing one more additional dwelling unit on the same parcel as the owner’s primary residence.
The City Council, however, left the door open for future discussion of granny flats and duplexes possibly qualifying as short-term rentals. Under the new ordinance, short-term rentals will have to have licenses that will be non-transferable.
In the aftermath of the City Council vote, some speculated its net effect will be to end renting out of all second homes or investment properties as short-term vacation rentals.
Both votes came after five hours of public testimony for and against Faulconer’s proposal. The City Council deadlocked after similarly long public debate on short-term rentals last December. 
Those favoring stricter regulations were elated, especially its originators.
“The primary-only solution puts San Diegans first and protects our housing stock from investors while preserving the roots of the home sharing economy,” said Bry.
Noting the other California cities, including San Francisco, Pasadena and Hermosa Beach, have passed similar regulations to reign-in short-term rentals, Bry added, “We have the obligation to preserve our housing stock prioritizing housing San Diegans.”
“I wasn’t elected to serve the interests of out-of-town investors, I was elected to serve the needs of my constituents,” said Zapf. “This makes the most sense for our communities. “This is not the perfect solution, but I have been working on this for the last four years, and the City Council must provide some relief for the residents in my district. This final plan will fund enforcement to penalize bad actors, so we can preserve the quality of life in our neighborhoods,” she said.
District 3 Councilmember Chris Ward, whose stance on rentals changed since December, said the vote “demonstrates a clear commitment to prioritizing the needs of our neighborhoods” characterizing it as “a starting point” that “leaves the window open” to possible future amendments.
Faulconer was conciliatory following the vote.
“I introduced my compromise proposal to help the City Council find enough common ground so they could pass comprehensive short-term rental laws, and with the additional amendments made today, we’ve finally achieved that goal,” he said. “The most important thing is that we have an established set of rules that protect neighborhood quality of life through increased oversight and enforcement. I want to thank the City Council for working collaboratively with my office to get this across the finish line.”
The HomeAway/VRBO platform was displeased by the Council outcome issuing the following statement, “HomeAway is extremely disappointed in the City Council’s decision to ignore the mayor’s compromise and effectively ban short-term rentals in the City of San Diego. This outcome will not only negatively impact the local economy but will deny many San Diegans their private property rights. We plan to evaluate next steps in the coming days to determine an appropriate path forward.”
At least one Peninsulan was pleased by the vote.
“I think the City Council got this one right,” said David Dick, a Peninsula Community Planning Board member. “Absent-owner, short-term rentals are inconsistent with the rights of property owners who have purchased properties in communities and neighborhoods. “I share the concern that the ordinance may not withstand a legal challenge. And I’m sure the interests aligned with Airbnb and VRBO will put up a substantial, well-funded fight. But that’s a battle for another day. For now, the City Council is on the right track,” Dick said.
District 7 Councilmember Sherman hinted the short-term rental battle may not be over.
“This is not a compromise,” Sherman said. “We’re abusing our discretion by restricting property rights, punishing people who can least afford it. What’s next? Banning dogs barking next door, or month-to-month rents?”