When you buy a Pacific Beach home that's already listed as a vacation rental, the license doesn't come with the house. San Diego's short-term rental licenses can't be transferred to a new owner or a different dwelling unit. A host can also hold only one license at a time. In Mission Beach that rule leaves a buyer stuck, because the Tier 4 pool there is full and the application period is closed.
One planning area north, it works differently. As of Oct. 9, 2026, the city reported 4,859 Tier 3 whole-home licenses issued and 802 still available. Tier 3 covers every part of the city outside Mission Beach, and its application period is open. A Pacific Beach buyer can still apply for a license of their own. What gets harder is keeping the license, using it, and making sure the specific unit qualifies at all.
The pool has grown
Since 2023 the city has posted Tier 3 counts on its Short-Term Residential Occupancy page, and archived copies show how the numbers moved. In the table below, the implied cap is simply issued plus available.
| City snapshot date | Tier 3 issued | Tier 3 available | Implied cap |
|---|---|---|---|
| June 16, 2023 | 4,036 | 1,383 | 5,419 |
| April 12, 2024 | 4,608 | 895 | 5,503 |
| March 14, 2025 | 5,118 | 385 | 5,503 |
| May 9, 2025 | 4,466 | 1,085 | 5,551 |
| March 27, 2026 | 4,711 | 895 | 5,606 |
| Oct. 9, 2026 | 4,859 | 802 | 5,661 |
The municipal code sets Tier 3 at 1 percent of the city's housing units outside Mission Beach, using SANDAG housing estimates. It calls for an update every two years and says the count can't drop below the prior period's number. The city's posted figures have actually moved more often than every two years. Its page still cites a SANDAG report last updated in March 2024 and doesn't explain the smaller adjustments since then. Either way, the ceiling has only gone up.
You may have seen a larger cap figure quoted. In February 2025, the San Diego Union-Tribune reported 6,592 citywide slots with 436 available. The city's Tier 3 rows from that period add up to 5,503, and adding roughly 1,089 Tier 4 licenses gets close to the higher total. That suggests the article combined both tiers. For Tier 3 alone, use the city's own table.
Spring 2025, when 652 licenses left the count
One row in that table matters most for a buyer. Between March 14 and May 9, 2025, the number of Tier 3 licenses issued fell by 652, and available licenses jumped from 385 to 1,085.
The timing points to a likely cause. Licensing became mandatory on May 1, 2023. Each Tier 3 license expires two years after it's issued and has to be renewed. The drop came almost exactly two years after that first wave. The city hasn't said whether the 652 were expirations, revocations, cancellations or data cleanup. Still, the pattern fits licenses dropping out at their first renewal, and those openings are part of why the pool stayed open through 2026.
So for an investor, a license is a two-year permit you have to keep earning, not a one-time win. The city emails renewal notices 60 days before a license expires, and the Tier 3 renewal fee matches the initial fee.
What it takes to keep a Tier 3 license
The city ties keeping a license to how you actually use the property. Three requirements matter most for second-home buyers in particular:
- Rent it short term at least 90 days a year. The ordinance requires Tier 3 and Tier 4 holders to use the license at least 90 days each year of its term. The city's page states that this is required to maintain the license.
- Report it every quarter. Hosts file quarterly reports showing how many days the unit was rented short term.
- Respect the two-night minimum. Every guest stay has to be at least two consecutive nights.
The 90-day floor is the one that catches lifestyle buyers. If you plan to spend the summer in a Pacific Beach cottage and rent it out "when we're not there," you'll need to fill at least 90 short-term days on top of your own time. Otherwise you risk the license that made the purchase work on paper.
If someone other than the owner will be the host, such as a manager or a family member, a Treasurer regulation dated July 31, 2026 spells out what's needed. The host must be at least 18 and must provide a right-to-occupy document and a Business Tax Certificate. The city publishes an owner's authorization form for this.
Pacific Beach started with about a fifth of the citywide pool
The 90-day minimum matters more in Pacific Beach because so many licensed homes there compete for the same guests. In June 2023, the Pacific Beach Town Council's license review counted 1,076 licenses in PB as of June 2, 838 of them whole-home. It also found 154 of those Tier 3 licenses spread across just 49 parcels.
Two weeks later, the city reported 4,036 Tier 3 licenses issued citywide. That puts Pacific Beach at roughly a fifth of every whole-home license outside Mission Beach in the program's first months. The city's active-license dataset, updated Oct. 18, 2026, lists every current license if you want to check a particular block. A new PB license joins a crowded field of competing listings, and it has to reach 90 rented days a year in that market to survive renewal.
Some Pacific Beach properties can't use a license at all
An open pool doesn't help if the unit you're buying isn't eligible. Since 2017, San Diego has prohibited renting new accessory dwelling units for fewer than 30 days. The Town Council's 2023 review listed ADUs, JADUs and garage conversions among the units excluded from licensing.
Enforcement has tightened recently. In September 2025, inewsource and KPBS reported that the city had approved licenses on properties with ADUs, starting with two homes in Pacific Beach. They found as many as 170 other properties with both a license and an ADU. The same report said the city had only just set up a system to block those applications before a license is issued. Earlier listing history is no guide here. A backyard unit that once took nightly bookings may not pass the city's current screening.
Another rule may change soon. In July 2026, inewsource reported that Councilmember Jennifer Campbell's office was planning amendments to close a gap that let a short-term rental license follow a no-fault tenant eviction. If you're looking at a tenant-occupied building with plans to convert it, keep an eye on that.
What a license costs to hold
The direct costs are modest next to Pacific Beach prices:
- License fees: Tier 3 costs a $41 application fee plus a $1,129 license fee for the two-year term. This has been in effect since March 1, 2025, and renewal costs the same.
- Transient Occupancy Tax: Under Measure C, rates effective May 1, 2025 are 11.75, 12.75 or 13.75 percent depending on zone. The city's tax zone lookup map gives the rate for a specific address.
- Prerequisites: Before applying, a host needs an active TOT certificate and an active, paid Rental Unit Business Tax account.
One proposal that could have raised these costs went nowhere. In January 2026, Times of San Diego reported that a proposed tax on vacation rental operators died 3–2 in the City Council's Rules Committee.
Quick Answers
Can I apply for a Tier 3 license on a Pacific Beach home I don't own yet?
Before anyone applies, the city requires an active TOT certificate and an active, paid Rental Unit Business Tax account. A host who isn't the owner also needs a right-to-occupy document and a Business Tax Certificate. Check the timing with the STRO Administration at [email protected] before you build it into an offer.
Could the open Tier 3 licenses run out?
Yes. Availability has ranged from 385 to 1,383 since 2023. If the cap is reached, the city's rules provide for a waitlist and a lottery by community planning area.
Does owning two Pacific Beach properties mean two licenses?
No. A host can hold only one license and operate only one dwelling unit as a short-term rental at a time.
This post is general information, not legal, tax or financial advice. Please confirm the details of your own property and plans with the city and a qualified professional before you rely on them.
If you're weighing a Pacific Beach purchase around a Tier 3 license, I can help you check the unit's eligibility, map out the 90-day requirement against your own calendar and build revenue projections that account for the competition from neighboring licensed homes. Emily Schaefer brings hospitality-trained operations to every STR purchase. Schedule a personalized consultation and we'll review the license math before you write an offer.
