Santa Barbara is ramping up efforts to shut down illegal vacation rentals and is even considering a new home-sharing ordinance to help soothe concerns in neighborhoods.

The desirability of Santa Barbara, a coastal community prized across the country and internationally, has resulted in hundreds of legal and illegal short-term vacation rentals in the city. Santa Barbara, however, is suffering from a housing crisis, and the proliferation of illegal short-term vacation rentals has put a further squeeze on housing availability.

“It is taking housing stock out of the neighborhoods,” Councilwoman Kristen Sneddon said. “That is not what these neighborhoods were intended to be. It wrecks the fabric.”

Members of the Santa Barbara City Council directed staff to require vacation rental owners to obtain a business license, increase fines for illegal homes, allow for inspections and verify the amount of transient occupancy tax they collect.

Short-term vacation rentals are currently allowed in areas where hotels are zoned and in the city’s coastal zone.

Santa Barbara has collected $823,795 in outstanding taxes, interest, penalties and fees from short-term vacation rental owners since it began the enforcement program in 2019. That includes $487,393 from properties in the coastal zone and $336,402 from properties in the inland area.

The city had compliance from 94 short-term vacation rental owners at the end of fiscal year 2024.

“The allowing of short-term rentals is not really providing any additional benefit to the city,” Councilwoman Wendy Santamaria said. “The additional benefit is to the owner because they are making additional profit.”

Santamaria said that if an owner chooses not to rent their property to a local resident for a long-term tenancy that is their choice, and that there should be a vacancy tax for such units to benefit the city.

“If you as an owner would rather sit on that property and not rent it and not get any income, that is a personal choice,” she said, “but you could still rent it as a long-term rental so the city is not prohibiting you from doing any of that.”

Santamaria said every vacation rental owner should have a business license and it should be displayed in their Airbnb advertisement.

“We have too many workers and families crammed into apartments and housing because there just isn’t enough housing stock for them to go out and get apartments of their own,” Santamaria said. “Every rental in our city is a business and operates as a business, and they should have a business license.”

Georgia Strickland said she has lived on the Mesa for 44 years and owned her home for the past 34 years. She said that up until a couple of years ago, the neighborhood was quiet and peaceful. People looked out for one another, bringing in neighbors’ trash.

That’s changed, she said, adding that investors are buying homes to make a buck.

“These property purchases are doing solely as a money-making venture with no regard for the neighbors,” Strickland said.

She said there are four short-term vacation rentals within one block of her home. The sounds from the homes are constantly disruptive, she said, adding that a few weeks ago, a live rock-‘n’-roll band played at a wedding reception at one of the rentals.

“The feel of the neighborhood has changed, and it is a sad thing for Santa Barbara homeowners,” Strickland said.

The city’s proposed home-sharing ordinance would require the owner of the house to be on site during the short-term stay.

Councilman Mike Jordan said it was “high time” to address the issue. He said he has chickens in his yard, and his neighbor has a boat. They work it out.

With short-term vacation rentals, however, there is little opportunity to work things out because no one is accountable, he said, alleging that illegal short-term vacation rentals erode the neighborhoods.

“You work those things out when it is a neighbor,” Jordan said. “You have no opportunity to work things out in the situation that is out there in the neighborhoods.”

The City Council took no action Tuesday, but the issue is expected to return for a vote next year.