SAN DIEGO (NEWS 8) — A federal appeals court recently upheld Santa Monica’s strict vacation rental rules.

Just this past week, a three-judge panel of the Ninth U.S. Circuit Court of Appeals upheld the Santa Monica rule prohibiting vacation-rental stays unless a resident is present.

The ruling is a blow to short-term vacation rental services like Airbnb, HomeAway and Vacation Rental By Owner (VRBO). Those companies are also held responsible if a rental doesn't have the proper licensing. The decision has many wondering what could happen to short-term vacation rental rules in other cities like San Diego.

San Diego City Council Pro Tem President Barbara Bry says regulations are key. 

"What I'm most concerned about is having hotels in our residential neighborhoods," said Bry. 

Bry said she applauds the decision to uphold Santa Monica's strict rules. But some renters don't agree especially with having the host stay in the rental while they are there. 

Last year, the San Diego City Council voted to implement strict regulations on short term rentals. But after some back and forth, the council ultimately rescinded that decision with plans to go back to the drawing board sometime this year.

Bry said she expects a newly drafted ordinance by the fall saying she doesn't anticipate it looking like what Santa Monica has implemented. 

There are currently an estimated 6,000 Airbnb properties around San Diego.