"This will attrition units out of the marketplace," Kimberly Jackson, a vacation rental property manager in Del Mar, said earlier this year, describing the city's new short-term rental rules as something close to a de facto ban. She wasn't wrong about the mechanics. She was describing a set of regulations that took effect this year and that most buyers shopping Del Mar for investment income still haven't fully priced into their offers.
If you're underwriting a Del Mar purchase around Racing Season revenue, the assumption behind your spreadsheet changed on February 5, 2026, when the Coastal Commission certified the city's short-term rental ordinance in a 7-2 vote. The math you'd run a year ago, buy near the track, rent it out during the summer meet, collect a seasonal premium, no longer describes how the permit system actually works for anyone buying today without one already attached to the property.
The Premium Everyone Assumes, and the Permit Nobody Mentions
The Del Mar Thoroughbred Club's summer meet runs July 17 through September 7 in 2026, seven weeks that property managers across the city treat as the single most valuable stretch on the calendar. Homes within walking distance of the track and the village can command 40 to 80 percent above standard nightly rates during that window, and that number is the one that shows up in listing conversations and investor pitches.
What doesn't show up as often is that new short-term rental permits in Del Mar are currently unavailable to anyone buying a property without one. The city capped the citywide total at 129 permits, calculated as roughly 5 percent of Del Mar's dwelling units under 2020 Census figures. But 150 short-term rentals had already registered as "Existing STRs" before the cap took effect, which means the program launched already oversubscribed. The city will not issue a single new permit until that number drops below 129 through attrition, and it's currently taking names for a waitlist with no published timeline.
Jackson's argument is that most existing rental owners never lived in the homes they rent out, so a rule requiring six months of owner occupancy will push non-owner-occupied units out of the program one sale at a time rather than banning them outright on day one. Whether or not you agree with her framing, the practical result for a 2026 buyer is the same: if short-term income is central to your offer, you are not buying a permit along with the house. You're buying a place in line.
Three Paths, Not One
Buyers I talk to tend to assume there's a single way to run this deal. There are three, and they have very different timelines.
| Path | What you're actually buying | Realistic timeline |
|---|---|---|
| New STR permit | A spot on the city's waitlist, first-to-apply and first-to-be-eligible once capacity opens | Unknown; tied to attrition of existing 150-permit pool |
| Existing STR permit, verified transferable | Grandfathered status under the ordinance, subject to confirming the permit actually survives the sale | Immediate, if transfer terms hold up |
| Long-term rental | Full exemption from the ordinance entirely | Immediate, standard lease timeline |
The middle path is where most of the risk hides. An active STR listing that advertises Racing Season income doesn't automatically hand that income to you at closing. You need to confirm in writing whether the specific permit transfers to a new owner and under what conditions, because the ordinance's primary residence requirement, six months a year minimum, applies to new operators even when the unit itself was grandfathered under the old rules. A permit tied to an owner who lived there and rented occasionally is not the same asset as a permit you inherit as an absentee buyer.
What the Premium Buys You, If You Can Get It
Say you do land a transferable permit near the track. The economics still come with conditions the marketing copy tends to skip. Del Mar's ordinance sets a three-night minimum stay, a stricter floor than neighboring Encinitas received at the same Coastal Commission hearing, where the two-night minimum was approved based on different local stay-length data. New permits run on a two-year cycle at $815 to apply and $598 to renew, and local reporting has put the transient occupancy tax at 13 percent, though the city recommends confirming the current rate directly with its finance office before you finalize any return model.
Layer those costs onto a seven-week season and the 40 to 80 percent premium starts to look smaller than the sticker version. Property managers who work this market year-round have said as much themselves: most owners who chase Racing Season income end up trading a predictable twelve-month lease for a volatile summer spike that, once turnover costs and off-season vacancy are factored in, often doesn't outperform steady annual rent. That's not a knock on the season itself. It's a reminder that a premium you collect for seven weeks has to cover fifty-two weeks of carrying costs, and the math only works if you've actually modeled the other forty-five.
The Rent You Can Count On Without a Permit
If short-term income isn't guaranteed, the long-term rental market becomes the floor your deal needs to clear on its own. Del Mar's rental comps as of mid-2026 run roughly $3,300 a month for a one-bedroom apartment, $4,500 for a two-bedroom, $7,000 for a three-bedroom, and $13,000 for a four-bedroom single-family home. Citywide vacancy sits around 4 percent, tight enough that a well-priced rental in most pockets of the city won't sit long.
That said, "most pockets" hides real variation. Standard two- and three-bedroom rentals in the village and the family neighborhoods tend to lease in 21 to 35 days at market price. Oceanfront properties along the coast take longer, often 30 to 60 days, because the pool of qualified tenants is smaller and approval leans heavier on income verification for that price tier. If you're targeting family tenants specifically, activity concentrates March through July, tied to the local school enrollment calendar rather than the racing calendar.
Two Different Maps of the Same City
Here's where buyers get their wires crossed. The STR ordinance divides Del Mar into three zones for permit-cap purposes: North Beach at 77 permits, South Beach at 32, and the Hills at 19. That's the map that determines whether you have any shot at a future permit even after the citywide cap loosens.
It is not the same map real estate uses to talk about rent. The neighborhood submarkets that shape long-term rental value, the oceanfront Beach Colony, walkable Olde Del Mar near the village and the track, the larger-lot Del Mar Heights with its school demand, and the inland Del Mar Mesa with newer construction and lower rents, cut across those zone lines differently. A property can sit in a zone with permit headroom and still be in a rental submarket where the numbers only work as a long-term lease. Before you assume a location works for STR income, check the zone cap. Before you assume it works as a rental, check the neighborhood comp, because those are two separate questions with two separate answers.
Before You Write an Offer
A few things worth confirming before short-term income shows up as a line item in your underwriting:
- Ask whether the property carries an active, registered STR permit and get written confirmation of transferability terms, not a verbal assurance from the listing agent.
- Check both the citywide cap and the specific zone's sub-cap. A property in a maxed-out zone may have no realistic path to a new permit even if the citywide number technically has room.
- Model the deal on long-term rent as your baseline. Treat any Racing Season income as upside that only counts if the permit is already secured.
- Confirm the current TOT rate and Rentalscape registration requirements directly with the city's finance division rather than relying on last year's numbers.
- If you're leasing long-term to a family, plan your listing and move-in timeline around the March-through-July school enrollment window in Del Mar Heights and Olde Del Mar rather than the summer race meet.
A Few Questions Worth Asking Directly
Does an existing STR permit automatically transfer when I buy the home? Not automatically. The ordinance grandfathers "Existing STRs" as a category, but a new owner who won't occupy the home as a primary residence for at least six months a year may not be able to carry that permit forward in the same form. Verify this in writing before you count the income.
What if I decide to just rent long-term instead? Long-term rentals are fully exempt from the STR ordinance. Any lease of more than 30 days, or a rental running from the start to the end of a calendar month, falls outside the permit system entirely.
Is the citywide median home price telling me anything useful right now? Del Mar's median list price ran about $3.47 million in August 2026, down roughly 10 percent per square foot from a year earlier. That's a citywide figure and it moves around by neighborhood and zone the same way rental value does, so use it as a starting point for a conversation, not a substitute for a comp pulled on the specific property you're considering.
Del Mar's permit system is going to keep shifting as the existing 150 registered rentals turn over, sell, or drop out of the program. If you're weighing a purchase here with income in mind, the smartest move is running both scenarios, STR and long-term, before you write the offer, not after you own the outcome. That's the kind of underwriting conversation I have with investor clients every week, and it's worth having before the ink dries rather than after.
Ready to pressure-test a specific Del Mar property against both scenarios? Ben Smith can walk through the permit status, the zone cap, and the realistic rent comp together, so your offer reflects what the property can actually deliver in 2026, not what the listing description implies.
