Understanding San Diego STRO License Tiers

Understanding San Diego STRO License Tiers: Tier 1, 2, 3 & 4 Explained

If you're considering operating a vacation rental in San Diego, one of the first questions you need to answer is surprisingly simple: Which STRO license tier applies to your property?

San Diego's Short-Term Residential Occupancy, or STRO, regulations divide vacation rentals into four license tiers. The correct tier depends primarily on how many days you plan to rent the property, whether you live there, whether you're renting the entire home, and whether the property is located within Mission Beach.

Those distinctions matter. Choosing the wrong tier isn't simply an administrative mistake—it can determine whether and how you're legally permitted to operate the property as a short-term rental.

Nancy's Vacation Rentals has managed San Diego vacation homes for more than 25 years, long before the current STRO licensing system existed. Today, understanding the licensing rules is an essential part of evaluating any potential San Diego vacation rental.

Here's how the four tiers work in 2026.

First: What Is a San Diego STRO License?

STRO stands for Short-Term Residential Occupancy.

Within the City of San Diego, an STRO license is generally required when a dwelling unit—or part of a dwelling unit—is rented to guests for periods of less than one month.

San Diego's current licensing requirement took effect May 1, 2023.

Important: These rules apply specifically to properties located within the City of San Diego. A "San Diego" mailing address or location within San Diego County does not necessarily mean the property falls under the City of San Diego STRO ordinance.

Cities such as Coronado, Del Mar, Solana Beach, Encinitas and others have their own rules and should be evaluated separately.

The Four San Diego STRO License Tiers at a Glance

Tier Type Basic Requirement Tier 1 Part-Time 20 days or fewer of STRO activity per calendar year Tier 2 Home Sharing More than 20 days per year with the host's primary residence involved Tier 3 Whole Home – Outside Mission Beach More than 20 days per year where the host does not reside onsite Tier 4 Whole Home – Mission Beach More than 20 days per year for qualifying whole-home rentals within Mission Beach

Tier 1: Part-Time Short-Term Rentals

Tier 1 is the simplest category.

It applies when a dwelling is used for short-term residential occupancy for an aggregate total of 20 days or fewer during a calendar year.

Unlike Tier 2, the host does not have to live onsite.

A Tier 1 Example

Imagine you own a home in Pacific Beach that you normally use personally. Each year you leave San Diego for several weeks and decide to rent the property to vacationers for 15 nights.

Because the property's total short-term rental activity remains at or below 20 days for the calendar year, Tier 1 may be the appropriate license.

But if you decide to increase that rental activity beyond 20 days, you could move into an entirely different licensing category.

2026 Tier 1 Fees

Application fee: $33
License fee: $193

Tier 2: Home Sharing

Tier 2 is designed primarily for true home-sharing situations.

It applies when short-term rental activity exceeds 20 days per calendar year and the property qualifies as the host's primary residence.

Under the City's rules, the host must occupy the primary residence for at least 275 days during the calendar year.

A Tier 2 host may rent rooms within the residence while living there. The rules also allow the host to be absent and rent the whole residence for up to 90 days during a calendar year.

A Tier 2 Example

Suppose you live full-time in a three-bedroom home in Point Loma.

You regularly rent a guest bedroom through Airbnb while continuing to occupy the home yourself.

You also take a six-week trip during the summer and rent the entire house while you're gone.

Assuming the other requirements are satisfied, that situation may fit within Tier 2 because the property remains your primary residence and your whole-home rental activity while absent remains within the applicable limit.

2026 Tier 2 Fees

Application fee: $33
License fee: $284

Tier 3: Whole-Home Vacation Rentals Outside Mission Beach

Tier 3 is particularly important for vacation rental owners and investors.

This tier generally applies to whole-home short-term rentals operated for more than 20 days per year when the host does not reside onsite and the property is outside the Mission Beach Community Planning Area.

This could include qualifying properties in communities such as Pacific Beach, La Jolla, Ocean Beach, Point Loma and other areas within the City of San Diego.

A Tier 3 Example

You purchase a two-bedroom condominium in Pacific Beach specifically as an investment property.

You live elsewhere and plan to make the condominium available to vacation rental guests throughout the year.

Because it is a whole-home rental outside Mission Beach, Tier 3 would generally be the relevant STRO category.

Tier 3 Has a Two-Night Minimum

Tier 3 properties are subject to a requirement that the same guest stay for at least two consecutive nights.

That's an important operational distinction because it affects how the property can be marketed and how small calendar gaps can be filled.

2026 Tier 3 Fees

Application fee: $41
License fee: $1,129

Tier 4: Whole-Home Vacation Rentals in Mission Beach

Tier 4 is essentially the Mission Beach counterpart to Tier 3—but the distinction is extremely important.

It applies to qualifying whole-home vacation rentals within the Mission Beach Community Planning Area that operate for more than 20 days per calendar year.

Like Tier 3, Tier 4 requires a minimum stay of two consecutive nights by the same guest.

Why Mission Beach Has Its Own Tier

Mission Beach historically has one of San Diego's greatest concentrations of vacation rentals.

When San Diego created its current STRO framework, Mission Beach was therefore treated differently from the rest of the city.

Tier 4 licenses are limited separately from Tier 3 licenses, making the property's exact location especially important.

2026 Tier 4 Fees

Application fee: $41
License fee: $1,129

Tier 3 vs. Tier 4: The Difference Can Be a Few Blocks

This is one of the most important concepts for prospective San Diego vacation rental buyers.

Consider two investment properties.

One is located in Pacific Beach and the other is located just south in Mission Beach.

Both are two-bedroom homes. Both will be rented to vacationers year-round. Neither owner lives onsite.

The Pacific Beach property would generally fall under Tier 3.

The Mission Beach property would generally require Tier 4.

That geographic distinction can materially affect the property's ability to operate as a vacation rental.

Are San Diego STRO Licenses Still Available in 2026?

This is where the current numbers become particularly important.

According to the City of San Diego's STRO program statistics updated August 28, 2026:

Tier Licenses Issued Licenses Available Tier 1 137 Unlimited Tier 2 2,357 Unlimited Tier 3 4,853 808 Tier 4 1,099 0

At that time, the City reported that applications were open for Tiers 1, 2 and 3, while the application period for Tier 4 was closed.

That makes Mission Beach fundamentally different from much of the rest of San Diego when evaluating a potential vacation rental investment.

Investor Tip: Never assume that because a property is currently being advertised as a vacation rental, a new buyer will automatically be able to continue operating it in the same manner.

Can a San Diego STRO License Transfer to a New Owner?

This is an especially important issue when buying or selling a San Diego vacation rental.

STRO licenses are not transferable between hosts, ownership or property locations.

In other words, buying a property with an existing STRO license does not mean that license simply becomes yours at closing.

The incoming owner needs to understand what license would be required and whether that license is available.

This deserves particular attention with Tier 4 Mission Beach properties because licenses are limited and, as of the City's August 28, 2026 update, none were listed as available.

One Host Cannot Simply Hold Unlimited STRO Licenses

Another common misconception is that an investor can purchase multiple properties and simply obtain a San Diego STRO license for each one under their own name.

The City's rules state that a host may hold only one STRO license at a time and may not operate more than one dwelling unit for STRO at a time.

The rules do contain situations in which another person with the legal right to occupy a dwelling may qualify as the host.

But this isn't something investors should structure casually. Ownership, leasing, right-to-occupy documentation and host requirements need to be evaluated before assuming a multi-property strategy will work.

STRO License Does Not Mean Your HOA Allows Vacation Rentals

This may be the single most important distinction for condominium buyers.

City approval and HOA approval are two different things.

A property may potentially qualify for a City of San Diego Tier 3 license while the condominium association's CC&Rs or rules prohibit rentals shorter than 30 days.

In that situation, having—or being eligible for—a City STRO license does not necessarily give the owner the right to violate the HOA's restrictions.

Conversely, an HOA allowing vacation rentals doesn't eliminate the City's licensing requirements.

You need to evaluate both.

Before Applying for an STRO License

Obtaining the correct tier is only part of the process.

The City currently requires applicants to have several items in place before submitting an STRO application, including:

An active Transient Occupancy Tax (TOT) Certificate
An active and paid Rental Unit Business Tax account when applicable
Required host and property information
Documentation establishing the host's right to occupy when applicable
Property-owner authorization when the host is not the owner

Requirements can vary depending upon the circumstances, so owners should confirm the current application checklist directly with the City before applying.

STRO Licenses Don't Last Forever

San Diego STRO licenses expire two years from the date they are issued.

They may be renewed subject to the City's requirements.

The current renewal fees are the same basic application and license amounts listed above for each tier.

Owners should therefore treat STRO compliance as an ongoing operational responsibility rather than something completed once when the property begins operating.

Tier 3 and Tier 4 Owners Have Additional Reporting Requirements

Hosts operating under Tier 3 or Tier 4 are required to submit quarterly reports to the City.

Tier 1 and Tier 2 hosts are not currently subject to that same quarterly reporting requirement.

This is another reason professional vacation rental management involves considerably more than putting a property on Airbnb and responding to guest messages.

Which San Diego STRO Tier Do I Need?

A simplified way to think about the decision is:

Will you rent for 20 days or fewer per year?
You may fall under Tier 1.
Will you rent more than 20 days and is this your primary residence?
You may qualify for Tier 2.
Will you operate a whole-home vacation rental for more than 20 days outside Mission Beach?
You may require Tier 3.
Will you operate a whole-home vacation rental for more than 20 days inside Mission Beach?
You may require Tier 4.

That's a useful starting point—not a substitute for evaluating the property's specific circumstances.

Buying a San Diego Vacation Rental? Check the License Before the Revenue

Investors understandably want to know how much a vacation rental can earn.

But there's a more fundamental question:

Can you legally operate it the way your financial projections assume?

A spreadsheet projecting $120,000 in annual vacation rental revenue isn't particularly useful if the property cannot legally be operated as the short-term rental assumed in the projection.

Before purchasing a property based on vacation-rental income, investigate:

The property's jurisdiction
The appropriate STRO tier
Current license availability
HOA and CC&R restrictions
Minimum-stay requirements
Existing license status
Whether a license survives a change in host or ownership
TOT and tax-registration requirements
Realistic vacation-rental revenue

Frequently Asked Questions About San Diego STRO Tiers

Do I need an STRO license to Airbnb my San Diego property?

If the property is within the City of San Diego and you're renting a dwelling unit or part of it for less than one month, the City's STRO licensing requirements generally apply. The appropriate tier depends on the way the property is operated.

What's the difference between Tier 3 and Tier 4?

Both generally apply to whole-home vacation rentals operating more than 20 days per year where the host does not reside onsite. Tier 3 applies outside Mission Beach, while Tier 4 applies within the Mission Beach Community Planning Area.

Are Tier 3 licenses available?

As of the City's August 28, 2026 update, 4,853 Tier 3 licenses had been issued and 808 remained available.

Are Tier 4 Mission Beach licenses available?

As of August 28, 2026, the City reported 1,099 Tier 4 licenses issued and zero licenses available. The Tier 4 application period was closed at that time.

Can I buy a Mission Beach property that already has a Tier 4 license?

You can purchase the real estate, but you should not assume the existing STRO license transfers with the property. San Diego states that STRO licenses are not transferable between ownership, hosts or dwelling-unit locations.

How long does a San Diego STRO license last?

STRO licenses expire two years after issuance and may be renewed subject to the City's requirements.

Does an STRO license override my HOA rules?

No. City licensing and private HOA restrictions are separate issues. Owners should review both before operating or purchasing a property for short-term rental use.

Can one person have several San Diego STRO licenses?

The City's current rules generally limit a host to one STRO license and one dwelling unit operated for STRO at a time.

Local Knowledge Matters More Than Ever

San Diego vacation rental regulations have changed dramatically during the more than 25 years Nancy's Vacation Rentals has managed homes here.

Today, evaluating a vacation rental requires understanding far more than nightly rates and occupancy.

A property's neighborhood, STRO tier, HOA, license availability, physical characteristics and historical performance can all affect whether it makes sense as a vacation rental investment.

That's particularly true in coastal communities where properties only a short distance apart can operate under different rules.

Considering a San Diego Vacation Rental?

Before buying a property—or changing how an existing property is operated—understand the complete picture.

Nancy's Vacation Rentals can help owners and prospective buyers evaluate a property's vacation-rental potential based on its location, property characteristics, HOA considerations, licensing environment and realistic revenue opportunity.

Request a complimentary property analysis and let us help you evaluate the opportunity before you make the investment.

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