Short-term vacation rental owners in Goleta could face new regulations.

The Goleta City Council on Tuesday unanimously approved proposed edits to Goleta’s short-term vacation rental ordinance. 

Many of the edits limited non-hosted vacation rentals. 

A non-hosted rental means the owner or long-term tenant is not in the residence at the same time as the guests who booked the property. 

Before the proposed definition amendment, Goleta did not have a distinction between hosted or non-hosted vacation rentals in its ordinance, unlike other cities, according to Anne Wells, Goleta’s advanced planning manager. 

The edits would prohibit properties from being used as non-hosted short-term vacation rentals within 24 months of a no-fault eviction, apply a waiting period before recently purchased properties can be used as vacation rentals and limit the number of cumulative nights they can be rented each year. 

“The best time to have created a sensible short-term vacation rental policy would have been 20 years ago. The next best time is now,” Councilman James Kyriaco said. 

The goal of making the changes is to hold on to the city’s current housing stock, according to Wells. 

In some ways, short-term rentals could pose a risk to the number of homes available to local residents, she added.

However, she said a short-term vacation rental and underused housing stock report showed that vacation rentals are not a significant driver of Goleta’s long-term housing shortage.

Kyriaco also said he would like to better understand how property owners are renting out short-term rentals. 

“How many of the short-term rentals are people living in their primary residence and renting it out sometimes?” he asked. “That is an important question to get to the bottom of.”

Under the proposed edits, property owners must wait 24 months after a no-fault eviction at a property before converting it to a non-hosted vacation rental. 

“The purpose is to disincentivize removing a long-term tenant to convert a dwelling unit into a short-term vacation rental,” Wells said. “We are trying to keep our long-term tenants in place.” 

To enforce the rule, the city would require a statement from the property owner regarding any no-fault evictions. 

Councilwoman Jennifer Smith voiced a concern about owners potentially being dishonest when submitting statements and asked about enforcement practices.

“Unfortunately, there are still some bad actors out there,” she said. “I know to some degree it is just a matter of trust.”

Wells said city staff do get notifications of no-fault evictions if it involves substantial remodel.

“Maybe we will get more because notices are required for those, but right now we don’t have any plans to go beyond just that signature line,” she said. 

Additionally, before newly purchased property can be eligible for a non-hosted vacation rental permit, owners would have to wait 24 months after purchasing.

That limitation is to prevent homes from being bought just to be turned into vacation rentals, according to Wells.

Property owners would be required to submit the property title and deed transfer to Goleta.

Alongside those limitations, it also was proposed that non-hosted vacation rentals may not be rented out more than 120 cumulative nights per calendar year. 

Wells said city staff wanted to give flexibility to owners, even though trends show city vacation rentals are offered mostly for 90 nights per year. 

However, the annual limit would not apply to hosted vacation rentals. 

“The thinking is that our residents that are living here might need additional supplemental income so we don’t want to penalize them if they need that,” Wells said.

The ordinance also would prohibit corporations or limited liability companies from getting a short-term vacation rental permit. 

“This is intended to help us maintain our community character and focus on protecting our housing,” Wells said.

One Goleta resident took issue with that change.

Nicolas Scozzaro said he recently obtained a vacation rental license for a unit on his property that he owns through an LLC and has invested $1 million in investments. 

The changes would “pull the rug and retroactively undermine that investment,” he wrote in a letter to the City Council.

“When I distributed the required flyers to my neighbors for my own permit, many were pleased to have a local option for their visiting relatives,” he said on Tuesday.

Councilwoman Luz Reyes-Martín sympathized with him and other people who will be impacted “in a way they don’t like.”

“But I have heard a lot of feedback from folks in my district who are supportive of the council reviewing the ordinance and making updates with all that we know about short-term vacation rentals,” she said.

Mayor Paula Perotte also said it’s critical to make them now.

“We may not have a problem now, but it is coming, I guarantee you,” she said. 

Goleta resident George Relles also spoke in favor of the changes on Tuesday. 

He said the city will see an increase of non-hosted short-term vacation rentals as neighboring cities are restricting their rental vacation homes. 

Owners who receive three violations or “three strikes” within a year could have their license suspended for 24 months.

The edits to the ordinance need to be formally adopted at a future Goleta City Council meeting. Once adopted, the changes would go into effect 15 days later.