James Ray Spahn was living in a vacation rental on Santa Barbara’s upper Eastside for a year. Then, he saw a “For Lease” sign on the building.

A few days later, he and his wife, Carolyn, moved in, residents of the just-opened Soltara Apartments in downtown Santa Barbara.

“It’s been a great experience,” Spahn said. “I feel like I am part of an experiment.”

He is.

Spahn is among several dozen residents of Santa Barbara’s newest downtown apartment building, a half-block off the 400 block of State Street.

After years of planning, permits and process, developer Peter Lewis finally opened the Soltara Apartments, a 78-unit project featuring a mix of studios and one- and two-bedrooms.

The apartments are the first large-scale new development downtown and will be a test case for whether urban living is viable for residents, and how it could impact a financially distressed downtown.

The rents range from $2,700 to $6,500, depending on location, size and views. About 10% of the units are below market rate, set aside for people earning “moderate incomes.”

The four-story apartments are designed by local architect Brian Cearnal, with views from the rooftop and communal barbecues, lounge areas and seating. At a time when Santa Barbara, like many coastal communities, is struggling to build enough housing, and housing that is affordable, Lewis said the development aims to help.

“I find more reward in building housing,” Lewis said. “There is plenty of people who want to live here. Demand is not the problem in his town. The problem is inventory.”

The apartments, built on the former Staples building parking lot, are 65% occupied. Lewis said they would be 100% occupied, but he purposely slowed down the leases because things were moving so fast.

He could have built a hotel, but housing is in his heart.

“When you realize how many people need the housing, enjoy the housing and are thankful for it,” Lewis said, “that’s pretty rewarding.”

Spahn and his wife moved from a ski town in Colorado and have been renting on the upper Eastside for the past year. An architectural photographer, he’s traveled the world taking photos of homes, hotels and resorts, but it was Santa Barbara he wanted to move to when he hung up his snow shovel.

In the ski resort town he lived in, Spahn said he and his wife walked downtown and rode bikes but couldn’t do that easily living on the upper Eastside. Moving to Soltara changed that. They can walk downtown now to shop and eat.

Now, he said they really don’t drive unless they go to Target or Trader Joe’s.

Spahn is paying $4,700 — less than the $5,400 for a duplex that he was paying prior.

They have downsized, but now he has a unit on the corner, and “everything is brand new. We love it, and we are super happy. “

Santa Barbara City Councilwoman Meagan Harmon, a downtown resident and persistent advocate for more affordable housing downtown, said the new apartments will help boost the area.

“I’m glad to see Mr. Lewis’ project become a reality,” Harmon said. “When people live downtown, they are more likely to shop, to eat and to recreate downtown, too. This new development will certainly boost our revitalization efforts and be good for the city as a whole.”

Harmon said that for years the city has been beating the drum of “more housing downtown.” It is expensive and difficult to build, she said, so these types of projects should be embraced.

“Of course, it has to be acknowledged that the planned rents are quite high and rent burden is an issue that I’ve been focused on ameliorating through legislation for some time now,” Harmon said. “But these apartments are not designed to be ‘capital A’ affordable apartments.”

The median rent for an apartment in Santa Barbara is $3,172, according to Redfin.

Harmon said housing development in Santa Barbara requires both balance and nuance.

“There is a place for market-rate apartments here,” Harmon said. “Downtown, in a development like Mr. Lewis’, is exactly where they should be.”

Lewis said it is important that the city make the planning and permitting process simpler, because delays lead to rising construction costs, interest rates and financing structures, and hurts the production of housing.

At Soltara, studios range from $2,750 to $3,500, one-bedroom units from $3,500 to $4,100 and two-bedroom units from $4,500 to $6,500.

Beth Seversen and her husband, Mark, pay $5,700 for a fourth-floor apartment. He is the lead pastor at Montecito Covenant Church, and she is a retired associate professor of Christian ministry studies and theology.

They moved in on the first day of September. They previously lived in Montecito. She said she was running to REI to pick up a birthday present when she saw the “For Lease” sign. She received a personal tour, and she was hooked.

“We fell in love with the building,” Seversen said.

She lives with allergies and asthma, so the new building appealed to her. They had been living in church housing, but decided to rent an apartment and free up the home for a younger family with children.

“The church needs a pitter-patter of children in the home,” she said. “We are so delighted that a young family could have a four-bedroom home in Montecito.”

Now, the Seversens, both in their 60s, have a two-bedroom apartment. She said it is well-constructed, and they hear almost nothing from outside the apartment.

“It is an excellent property,” she said. “I can’t say enough about Peter Lewis. Everything is done with excellence. It is very safe and secure. We just need more of it.”

She would like to see Santa Barbara continue to build housing and “find a way forward for affordable housing in Santa Barbara for young professionals.”

She said it is close to Backyard Bowls, Santa Barbara Roasting Co., Helena Avenue Bakery and Dart Coffee, and she can walk to the harbor and back. More people, she said, should be able to experience downtown living.

“We can’t keep medical staff, even doctors in Santa Barbara,” Seversen said. “Something needs to change. I do hope we can have more affordable housing.”

Robin Elander, executive director of the Downtown Association, said the new apartments are a welcome addition to downtown Santa Barbara.

“By adding more housing stock, Soltara not only provides modern, comfortable living options but also helps alleviate some pressure on the limited supply,” Elander said. “While continued focus on affordable housing is also important, new developments like this are critical in addressing the growing demand for housing at all levels, and this one helps to foster a vibrant walkable downtown community. I hope this beautiful project continues to pave the way for more housing developments downtown.”

Lewis, one of Santa Barbara’s most connected and engaged housing providers, said he likes to meet his tenants, learn their stories and understand their interest in living downtown. Santa Barbara needs more housing, he said, and he hopes his apartment building is part of the solution to the housing crisis.

“It’s nice to have it done,” Lewis said. “It’s nice to see people enjoying it and building community.”