What to Know About San Diego's Rental Laws for Multi-Family Properties

San Diego’s rental market is vibrant and diverse, particularly along the coast where multi-family properties are in high demand. From Oceanside to La Jolla to Pacific Beach, these high-value properties attract a wide range of tenants—including students, military families, and long-term renters. But with the appeal of owning or managing coastal multi-family real estate in San Diego comes the responsibility of navigating a complex web of local and state rental laws.

If you manage or own multi-family properties in San Diego County, especially in coastal areas, understanding the legal landscape is essential to avoiding costly penalties, maintaining good tenant relationships, and staying compliant. Below, we’ll walk through the key rental regulations that apply to multi-family units and highlight how they impact coastal landlords and property managers.

1. Statewide Rent Control: The California Tenant Protection Act (AB 1482)

In 2020, California enacted the Tenant Protection Act, also known as AB 1482, which brought major changes to rent control and just cause eviction laws across the state.

Key Provisions:

• Rent Cap: Annual rent increases for qualifying properties are capped at 5% plus the local CPI (inflation), not to exceed 10% total per year.

• Just Cause Eviction: Landlords must provide a valid reason (just cause) to evict tenants who have lived in the unit for 12 months or more.

• Notice Requirements: If you're terminating a lease under just cause, you may need to provide relocation assistance (usually equivalent to one month's rent) or a rent waiver.

Applicability to Multi-Family Units:

Most multi-family properties built before 2005 are covered by this law. Newer construction (within the last 15 years), owner-occupied duplexes, and single-family homes (unless owned by large corporations) are typically exempt.

For coastal multi-family buildings that are over 15 years old, this law likely applies—meaning landlords must calculate rent increases carefully and document reasons for evictions.

2. San Diego's Tenant Protection Ordinance

In addition to AB 1482, the City of San Diego passed its own Tenant Protection Ordinance in 2023. This local law is designed to go above and beyond state protections.

Key Provisions:

• Requires 30-day written notice for terminations without cause, even during the first year of tenancy.

• Extends protections to tenants of any length of residency, not just after 12 months.

• Relocation assistance is required for all “no-fault” evictions, including owner move-ins and major renovations.

This law applies to all rental units within San Diego city limits, including coastal areas like Mission Beach, Point Loma, and Pacific Beach. For multi-family property owners, this means that eviction decisions must be made cautiously and with legal guidance to avoid compliance issues.

3. Coastal Zone Regulations and the California Coastal Act

Managing a multi-family property in a coastal area means additional layers of oversight due to the California Coastal Act. Much of the western edge of San Diego—including La Jolla, Ocean Beach, and Imperial Beach—falls within the California Coastal Zone, which subjects landlords to unique development and zoning rules.

Impacts on Multi-Family Rentals:

• Short-Term Rentals: Coastal properties often attract Airbnb-style operators, but San Diego's short-term rental ordinance, along with the Coastal Commission’s authority, limits this in multi-family units. In most coastal neighborhoods, only one short-term rental license is allowed per host.

• Renovations and Redevelopment: Any major structural changes, additions, or demolitions to a building in the coastal zone typically require a Coastal Development Permit (CDP).

• Affordable Housing Restrictions: The Coastal Act emphasizes maintaining affordable housing in coastal communities. Converting long-term rentals to vacation units or removing them from the market may trigger compliance or mitigation requirements.

If you manage or own a coastal multi-family building, always check with the San Diego Planning Department and Coastal Commission before making substantial changes.

4. Security Deposit Rules

As of July 1, 2024, California has implemented updated security deposit laws under Assembly Bill 12 (AB 12), affecting both landlords and tenants. 

Security Deposit Limits

• General Rule: Landlords can charge a maximum of one month's rent as a security deposit, regardless of whether the unit is furnished or unfurnished. 

• Exceptions for Small Landlords: Landlords who own no more than two residential rental properties, collectively including no more than four dwelling units, may charge up to two months' rent as a security deposit. To qualify, the owner must be a natural person, a limited liability company with all members as natural persons, or a family trust.

San Diego does not have more restrictive local caps, but landlords must comply with the state’s return deadlines: 21 days after move-out, with an itemized statement and receipts for any deductions over $125.

For multi-family property owners managing dozens of units, standardizing this process with clear documentation and timelines helps avoid disputes and claims in small claims court.

5. Habitability and Inspection Requirements

Landlords in California must provide safe, habitable living conditions, including:

• Functioning plumbing, heating, and electrical systems

• Proper weatherproofing and structural integrity

• Working smoke detectors, carbon monoxide detectors, and locks

In multi-family buildings, compliance is more strictly enforced. San Diego County can conduct periodic inspections for large complexes, especially if past violations exist.

Additionally, San Diego’s Lead Hazard Prevention Program may require inspection or abatement for properties built before 1978. Coastal areas often have older housing stock, so multi-family owners should factor this into maintenance plans.

6. Rental Registration and Local Fees

San Diego’s Residential Rental Registration Program, though currently limited in scope, may expand in the future. At present, multi-family properties are subject to business taxes and may be required to register if used for short-term rental purposes.

Also note:

• Trash Collection: Multi-family buildings (5+ units) must contract private trash service—the city does not provide waste collection.

• Water Billing: Many coastal landlords use RUBS systems (Ratio Utility Billing System) to split water/sewer costs among tenants. Make sure your lease clearly discloses how utilities are allocated to remain in compliance.

7. Anti-Discrimination and Tenant Screening

California’s Fair Employment and Housing Act (FEHA) and federal laws prohibit discrimination based on race, religion, gender, family status, source of income, and other protected classes.

For San Diego landlords, there are specific local ordinances that expand protections:

• Source of Income Protection: You must accept Section 8 and other housing vouchers if a tenant meets your standard screening criteria.

• Military Tenants: Given the presence of military bases, landlords should be familiar with additional rights for service members, including early lease termination under federal law.

Tenant screening practices for multi-family properties must be standardized and non-discriminatory. Avoid blanket policies that could lead to disparate impact claims—such as rejecting all applicants with any criminal history.

8. HOA Rules and Zoning Restrictions

If your multi-family building is part of a homeowners association (HOA), those rules can override or supplement local laws regarding leasing duration, pet policies, and noise enforcement. In coastal neighborhoods with special zoning overlays, there may be limits on adding new units or converting garages into ADUs (Accessory Dwelling Units).

Always check with a local land use attorney or zoning planner before making changes to your rental strategy.

Conclusion

Managing multi-family properties in coastal San Diego can be rewarding, but it also comes with intricate legal obligations. Between statewide rent control, local eviction protections, coastal regulations, and tenant rights, landlords must stay informed and proactive.

Partnering with a professional property management company can help ensure you remain compliant while maximizing returns on your coastal investment. Whether you're overseeing a small fourplex in Ocean Beach or a 20-unit complex in La Jolla, knowledge and preparation are key to long-term success.

If you have questions about rental compliance or need help managing your San Diego properties, reach out to our team at LRA Property Management. We specialize in coastal and multi-family property management throughout San Diego County—and we’re here to help you navigate the ever-changing rental landscape.