Santa Barbara’s contentious short-term vacation rental ordinance is moving forward to the City Council after multiple rounds of discussion by the Ordinance Committee.

The committee approved a revised ordinance in a 2-1 vote. The changes include a ban on short-term rentals and homeshares in high fire hazard areas, a minimum two-night stay requirement and removal of the on-site parking requirement.

Councilman Oscar Gutierrez abstained from the vote, explaining that he doesn’t want to allow short-term rental companies such as Airbnb if they aren’t transparent about discriminatory business practices.

Gutierrez shared a personal anecdote during the meeting about an incident from 10 years ago in San Diego where he couldn’t find any operators willing to rent to him, but they were willing to rent to his friend with the last name of Schneider.

However, after they met with the owners, he said, they were told that the price would be doubled.

“It’s just a big concern for me,” Gutierrez said. “I know that back in the day, people of color were denied hotels. I haven’t really heard of that happening in a very long time, but I am hearing it happening when it comes to short-term vacation rentals.”

When asked how the city could ensure that rentals aren’t discriminatory, Tava Ostrenger, the city’s chief assistant city attorney, explained that they wouldn’t have a way to track that issue but would investigate any claims of discriminatory practices.

“I’ve asked Airbnb for specific information, current information about Santa Barbara, and they refused to do it, and to me that’s a huge red flag about what kind of business model it is and who they’re really serving and whether or not we’re going to enable that,” Gutierrez said. “Because we have an obligation to be as equitable as possible and to make sure that public safety is our No. 1 priority.”

The proposed ordinance is meant to create a streamlined process for short-term rental licenses and preserve the housing stock for long-term rentals. 

Under the ordinance, short-term rentals and homeshares would be allowed only in certain zones of the city.

Specifically, short-term rentals would be prohibited in all inland residential zones and high fire risk areas, and allowed only in non-residential zones or mixed-use residential zones, including the downtown corridor, the Milpas Street corridor and Upper State Street.

Under the proposal, homeshares would be allowed in all residential and non-residential zones of the coastal zone, which includes the waterfront, the Funk Zone and the Coast Village Road area.

Resident Theo Kracke argued that there was no data to support the added fire hazard area restrictions and raised concerns about the negative financial impact of the ordinance. 

City staff estimated that the city could lose roughly $2.7 million annually in transient occupancy tax revenue if the ordinance is adopted. 

“We’ve already seen cuts to services to balance the 2027 budget. What important services will be cut next when a huge percentage of revenue generated by short-term rentals are gone due to the restrictive ordinance?” Kracke said.

Councilwoman Kristen Sneddon said she’s more concerned about preserving units for long-term housing.

“This is about so much more than the TOT bottom line, and $2 million is really not a big enough number to be selling out our neighborhoods,” Sneddon said.

She also strongly supported the new fire hazard area restrictions, noting that the city fire marshal supported that restriction as it would help with evacuations in the case of an emergency, according to the city staff report.

Councilman Mike Jordan also argued that protecting TOT revenue shouldn’t come before protecting neighborhoods. 

“We will find a couple million dollars, maybe we won’t find a couple million dollars, but we will have an entire set of neighborhoods that are thankful for having their neighborhood protected,” Jordan said.

Mesa residents have been the most vocal supporters of the ordinance, sharing stories about dealing with loud parties, unsafe parking conditions and litter — all from short-term vacation rental guests.

Georgia Strickland, a Mesa resident since 1982, argued that it would be better for visitors to stay in hotels and other areas designed for tourism rather than residential neighborhoods.

“Those who oppose this recommendation are looking out for their pocketbooks, their livelihoods, not the city of Santa Barbara budget,” Strickland said. “Those who support this ordinance are looking out for their homes, families and community.”

The committee did ask staff to bring a few options to the full council regarding how many short-term rentals a person can own and operate and options regarding insurance status and proof of insurance.

The ordinance is expected to go to the full City Council by September.