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Santa Barbara City Council Blocks Short-Term Vacation Rental Conversion

Majority of council says housing crisis is too big to lose even a single residence

The Santa Barbara City Ccouncil voted 5-2 Tuesday to deny a property owner from converting a fourth-floor residence at 101 W. Anapamu St. to a vacation rental. Click to view larger
The Santa Barbara City Ccouncil voted 5-2 Tuesday to deny a property owner from converting a fourth-floor residence at 101 W. Anapamu St. to a vacation rental. (Josh Molina / Noozhawk photo)

Santa Barbara’s housing crisis is too severe to allow the conversion of a residence to a short-term vacation rental near downtown Santa Barbara, the City Council decided on Tuesday.

The council voted 5-2 to deny a property owner from converting a fourth-floor residence at 101 W. Anapamu St. to a vacation rental.

Council members Frank Hotchkiss, who is running for mayor, and Randy Rowse, sided with the property owner.

“We are in a housing crisis,” Councilman Jason Dominguez said. “We cannot provide housing for the employees who perform the basic services for the city. Teachers, police and firefighters; we are not able to house people who grew up in Santa Barbara and want to stay here.”

Councilman Harwood “Bendy” White agreed that all housing matters.

“The housing crisis is upon us,” White said. “Every unit counts.”

Since 2010, Dan Cattaneo has operated a 1,007-square-foot residence as a short-term vacation rental. He paid hotel bed taxes to the city and took out a business license.

Beginning in 2015, however, the city moved to ban vacation rentals in single-family residential zones.

The city allows short-term rentals in commercial zones, but considers them hotels, and each project application must still get approval from the city.

Even though Cattaneo had been quietly operating a short-term rental, the council’s crackdown on vacation rentals forced him to seek a conversion from residential to commercial. The Historic Landmarks Commission denied the conversion in April, and Cattaneo appealed to the City Council.

However, the project became entangled in a wider community debate about housing affordability.

Even though Cattaneo and a group of other property owners who appealed the denial of the project hung their hats on the fact that a single unit, one way or the other, isn’t going to solve or exacerbate the problem, others disagreed.

“I think there are some bigger issues here,” said Sheila Lodge, a former Santa Barbara mayor. “Allowing the conversion of residential to non-residential aggravates both the lack of housing and the surplus of commercial zoning in the city.”

Lodge said there is a housing crisis, but no shortage of hotel rooms, with several in the pipeline for approval.

Lindsey Baker, president of the League of Women Voters, said that converting one vacation rental could lead to more.

“Single units mount up, and a precedent becomes established,” Baker said.

Santa Barbara resident Anna Marie Gott also blasted the attempted conversion. She said doctors, firefighters, teachers, workers in the service industry — all cannot find housing because short-term vacation rentals are “sucking” the housing away.

She said people are purchasing residences for the specific purpose of converting them to short-term rentals. She said there are 8,900 residential units in the R4 zone (where residential and commercial are both allowed).

“They are eating into the housing stock by purchasing these units to be converted into short-term vacation rentals,” Gott said. “Housing is critical to the businesses that operate here.”

Jarrett Gorin, principal of Vanguard Planning Inc, who represented property owners in favor of the vacation rental conversion, dismissed Gott’s claim at the meeting.

“We all took economics, right, in high school or college,” Gorin said. “Every single unit in the R4 zone isn’t going to turn into a short-term rental”

If so, he said, the law of supply and demand would mean that short-term rentals would then sell for $10 a night.

Gorin said that it is unfair for the city to deny the conversion when short-term vacation rentals are allowed in R4 zones.

“The city can’t be arbitrary and capricious,” said Gorin, who hinted at taking legal action against the city if it denied the conversion.

Mayor Helene Schneider disagreed with his statement.

“If you go through the process, there is not a guarantee of a specific result,” Schneider said.

Eva Turenchalk, a land-use planner representing Cattaneo said the housing crisis existed before vacation rentals became popular.

“Short-term rentals did not create our housing crisis and, frankly, banning them isn’t going to solve it,” Turenchalk said.

Cattaneo also said a long-term rental of his property isn’t going to address the housing problem because he could rent the apartment monthly for between $4,000 and $5,000.

During the meeting, Cattaneo said, “As your constituent, I feel betrayed.”

Councilman Rowse said he didn’t understand why the city was interjecting a broader housing discussion into a vote on a single project.

“This is a really unfortunate discussion,” Rowse said. “I am very disappointed in the outcome on this."

Hotchkiss also expressed outrage.

“We should not do anything but uphold this appeal,” Hotchkiss said. “Mr. Rowse is damn right that you can’t change the rules in the middle of the game.”

Noozhawk staff writer Joshua Molina can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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