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Santa Barbara Vacation-Rental Conversion Sparks Housing Controversy

Man seeks permission to legalize vacation rental and gets denied by Historic Landmarks Commission

The Santa Barbara City Council will hear an appeal Tuesday regarding a plan to to legally convert a fourth-floor residence into a short-term vacation rental/hotel at 101 W. Anapamu St. Click to view larger
The Santa Barbara City Council will hear an appeal Tuesday regarding a plan to to legally convert a fourth-floor residence into a short-term vacation rental/hotel at 101 W. Anapamu St. (Joshua Molina / Noozhawk photo)

Since 2010, a single 1,007-square-foot residence on the fourth floor of a downtown building has quietly existed as a short-term vacation rental.

The owner had a business license, paid hotel bed taxes to the city, and the property received no complaints from neighbors.

But when property owner Dan Cattaneo went before the city’s Historic Landmarks Commission to legally convert the residence into a short-term rental/hotel, the panel slammed the door in his face.

The reason?

Santa Barbara suffers from a housing shortage, and apparently there isn’t even one residential unit to spare. Or is there?

The Santa Barbara City Council will decide the fate of the proposal at Tuesday’s City Council meeting after Cattaneo and a group of others concerned about the outcome appealed the HLC’s decision.

“If it is the city's intent to not approve 'even one' short term rental, then that should be very clearly communicated to the public so that property owners do not waste countless months and thousands of dollars going through a process that has no chance of yielding an approval,” said Eva Turenchalk, a land-use planner representing Cattaneo.

In her appeal letter to the City Council, Turenchalk said: “Mr. Cattaneo was perplexed when he was told that he was operating his short-term rental 'illegally' regardless of the fact that the city had issued him a business license for a short term rental, and accepted his TOT for 7 years.”

Santa Barbara in 2016 banned short-term vacation rentals unless they are in areas where hotels are allowed. The council also stated that those vacation rentals in commercial-hotel zones would need to become legal and seek formal approval.

The HLC voted 6-0 that the project is inconsistent with “the principles of sound community planning” because it would result in the loss of one housing unit from the city’s housing stock. Santa Barbara has a 0.5 percent rental vacancy rate.

The city states that a short-term rental/hotel conversion from a residential use to a non-residential use requires compliance with the city’s Nonresidential Growth Management Program.

The residence sits atop three stories of commercial at 101 W. Anapamu St.

Jarrett Gorin, principal of Vanguard Planning Inc, noted in his appeal letter that the conversion requires no physical development or exterior alterations or modifications. He also pointed out that the Hotel Conversion Ordinance states that proposals involving only one unit "shall not be considered a conversion."

Gorin represents property owners in similar situation who worry that denying the conversion in an area zoned for hotels could set a bad precedent.

“Opponents of future proposals that are desirable and beneficial to the city will exploit the "sound community planning" finding, and the HLC's arbitrary interpretation and application of that finding in this case, to obstruct the development and/or operation of land uses the city is attempting to provide through the SBMC and its general plan,” Gorin said.

The conversion attempt comes at a time when the city is facing a citizen lawsuit over the deletion of short-term vacation rentals in residential zones, and massive public interest in the issue of workforce and affordable housing.

Between January 2015 and February 9, 2017, about 370 above-moderate income units were constructed or issued permits in the city, If that trend continues, according to a city staff report, the city will be home to 1,480 new above-moderate residential units by 2023.

In addition, another 348 market-rate units were approved as of June 2017 under the city’s Average Unit-Size Density Incentive Program.

The City Council hearing begins at 2 p.m. at Santa Barbara City Hall.

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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