Council adopts updated short-term rental fees to reach near full cost recovery

The City Council adopted revised fees for Short-Term Residential Occupancy (STRO) licenses after a staff presentation and public comment.

SDR program manager Matt Wood presented a fee-study update that recalculated staffing, software, enforcement and non-personnel costs for the program and projected two‑year costs of about $8.9 million. The study estimates the number of licenses by tier and proposed fee adjustments intended to recover program costs without exceeding them, consistent with Proposition 26. Wood explained specific changes: tier 1 and tier 2 application fees increase (from $25 to $33), tier 3 and tier 4 application fees decrease (from $70 to $41), tier 1 license fee increases from $100 to $193, tier 2 from $225 to $284, and tier 3/4 license fees increase from $1,000 to $1,129. Staff projected the proposed fee package would be “99.9% cost recoverable” for the two‑year period under analysis.

Councilmembers and members of the public raised questions about benchmarks, whether public safety costs could be included, and the transparency of the benchmark comparisons with other cities. Commander Dan Grubbs of San Diego Police Department told the council the department had examined its data and legal guidance and concluded it currently lacks the ability to show that calls for service at short‑term rental addresses are consistently above neighborhood norms in a way that would justify a public-safety cost component. San Diego Fire Department staff said annual inspection processes already recover their costs where applicable.

After brief debate and follow-up questions, Council Member Campbell moved and Council Member Elo Rivera seconded the staff recommendation. The council adopted the fee schedule and directed the Department of Finance to amend the rate book; staff noted the fees were set to take effect March 1, 2025.