A whole-home short-term rental license in San Diego belongs to the host. It does not belong to the house. When a Pacific Beach home sells, the seller asks the City to cancel the license, and the buyer applies for a new one under whatever rules and availability apply at that point. The City's program page states plainly that licenses are not transferable between ownership or location. The municipal code says the same thing. Under San Diego Municipal Code §510.0106(e), the City will not accept a transfer or assignment of a license's ownership or location.
That one rule settles a question that comes up whenever a listing in 92109 mentions rental history. In Pacific Beach, a license is not a scarce asset that a buyer pays extra for. The cap covering Pacific Beach still has room. The cap that is full applies one planning area south, in Mission Beach, and even there the license doesn't go to the buyer.
The License Ends at Closing, So the Buyer Starts From Zero
Pacific Beach falls under Tier 3, which is the City's category for whole-home rentals where the host does not live on site, anywhere outside the Mission Beach Community Planning Area. A buyer who wants to operate a home that way needs a license in their own name. As of the City's October 23, 2026 update, applying looks like this:
- Hold an active Transient Occupancy Tax certificate from the Office of the City Treasurer.
- Have an active, paid Rental Unit Business Tax account for the parcel.
- If the host is not the owner, also obtain a Business Tax Certificate and provide a right-to-occupy document, such as a lease clause or the owner's signed authorization. A City rule dated July 31, 2026 clarifies these applicant requirements, including a minimum host age of 18. It does not change the caps.
- Pay a $41 application fee and a $1,129 license fee. Fees are nonrefundable, and the license expires two years after it is issued.
- Rent the home for at least 90 days each year and file quarterly utilization reports to keep a Tier 3 license in good standing.
None of these steps depends on what the previous owner held. A seller's license, rental calendar and reviews say something about how the home has performed as a rental. None of them gives the next owner a right to operate it that way. Whether a license is worth paying for in a purchase price comes down to one question: can the buyer get their own?
The Cap Over Pacific Beach Has Never Filled
The Tier 3 cap is set at 1% of San Diego's housing units outside Mission Beach, based on SANDAG housing estimates. That cap has had room from the start. When the first application window closed in late 2022, KPBS reported that Tier 3 applications came in at less than half of the 5,416-license citywide cap, and the City dropped the lottery it had planned.
Since then the cap has filled slowly:
| Snapshot | Tier 3 licenses issued | Tier 3 licenses still available | Source |
|---|---|---|---|
| Late 2022 | Applications under half of a 5,416 cap | Lottery not needed | KPBS |
| June 2025 | 4,523 | 1,028 | San Diego Union-Tribune |
| October 23, 2026 | 4,854 | 807 | City of San Diego |
Pacific Beach holds a large share of those licenses. The City's open STRO license dataset, updated November 1, 2026, lists 984 active Tier 3 licenses in the Pacific Beach Community Planning Area. That is roughly one in five Tier 3 licenses citywide. Even so, 807 licenses remain available for the whole city, and as of the October 23 update the Tier 3 application window was open.
Here is what that means for a buyer. As long as Tier 3 has room, a Pacific Beach buyer who meets the requirements can apply for a license without buying a house that already had one. In this part of 92109, the seller's license isn't a scarce asset because the buyer can't inherit it and can apply for their own.
That room is shrinking. Available Tier 3 licenses fell by about 221 between June 2025 and October 2026. The City's lottery rule from June 2025 lays out what happens when the cap is reached. Tier 3 applications close within 45 days, a stratified lottery sets waitlist positions, and the application period reopens once the waitlist drops to 75. A buyer planning to rent their Pacific Beach home should keep an eye on that available count.
One Planning Area South, the Cap Is Full
Mission Beach has its own Tier 4 category with a separate cap of 30% of its housing units. On the City's October 23, 2026 dashboard, Tier 4 shows 1,099 licenses issued, none available, and the application period closed. The waitlist window that opened in 2025 closed on August 15, 2025.
The San Diego Union-Tribune reported in July 2025 that nearly 1,100 Mission Beach licenses were issued by lottery in late 2022 because demand exceeded the cap. The first waitlist had 209 applicants, and 165 of them eventually received two-year licenses as current holders dropped out. Councilmember Jennifer Campbell, whose office drafted the regulations, told the Union-Tribune that the ordinance had done what it was meant to do:
"As a result of this ordinance, we have seen more housing return to the market for San Diego residents, while also providing options for visitors who want to stay in one of San Diego's many vibrant and diverse neighborhoods."
Mission Beach is where the cap is actually binding. Even here the transfer rule still applies. A buyer of a licensed Mission Beach home gets the house and does not get the license, and the Tier 4 window for joining the waitlist was closed as of the City's October 23 update. In both planning areas, the license doesn't come with the sale. The difference is how easily the next owner can get one. In Pacific Beach, a buyer can apply now while Tier 3 has room. In Mission Beach, no applications were being accepted as of the City's last update.
One ZIP Code, Two Different Rules
Both areas share ZIP 92109, and the monthly market report for that ZIP doesn't separate them. For September 2026, the Marketwatch report for metro San Diego ZIP codes put the 92109 median sale price at $1,353,791, down 0.8% from a year earlier. It recorded 24 closed sales, a median of 26 days on market, and sellers receiving 96.8% of original list price.
Compare those 24 monthly sales with the license counts. The ZIP holds 984 active Tier 3 licenses on the Pacific Beach side and about 1,097 Tier 4 licenses on the Mission Beach side, according to the City's November 1, 2026 open data. With that many licensed homes, buyers in 92109 will regularly see listings that mention rental income or a rental history. Every one of those homes falls under the same transfer rule, but the two sides of the ZIP have very different access to a new license. The ZIP median mixes them together.
The City's Community Planning Area map shows which side a given address falls on. In Pacific Beach, a home's rental history shows how it might perform, and the buyer would apply for their own license. In Mission Beach, rental history describes something the next owner can't currently join the waitlist for. In both places, the license isn't part of what the buyer receives at closing.
For wider context, the Greater San Diego Association of REALTORS' September 2026 county report showed a countywide median of $910,000 across all property types and three months of supply. That puts 92109's median well above the county figure.
This post is general information about how the City's program works. It is not legal, tax or financial advice. Confirm the details of your own purchase or rental plans with the City's STRO Administration and the right professionals.
Frequently Asked Questions
Does a short-term rental license transfer when I buy a Pacific Beach home? No. The City states that licenses don't transfer between owners or properties. The seller requests cancellation, and a buyer who wants to operate a short-term rental applies for a new license.
Can I apply for a Tier 3 license right now? As of the City's October 23, 2026 update, Tier 1, 2 and 3 applications were open, with 807 Tier 3 licenses available citywide.
What happens if the Tier 3 cap fills? Under the City's June 2025 lottery rule, Tier 3 applications close within 45 days after the cap is reached, and a stratified lottery sets waitlist positions.
Who answers questions about a specific property? The City's STRO Administration can be reached at 619-615-6120 or [email protected].
If you're comparing homes in 92109 and a listing leans on its rental history, Emily Benito can help you sort out which planning area the home is in and what the license situation means for its price before you write an offer. Let's Connect.
