The City of Santa Barbara is looking to hire private investigators and possibly criminally prosecute illegal operators of short-term vacation rentals.
The city’s three-member ordinance committee tackled the proposal this week and voted to send a $1.4 million, yearlong pilot project to the full City Council for consideration.
“This is something that I have heard over and over and over again, not just from residents in my district, but from across the city how problematic these illegal short-term rentals are,” Councilwoman Meagan Harmon said. “We have tried so many different ways to get a handle on them.”
It is estimated that under the supervision of the Finance Department, the collection of ongoing annual transient occupancy taxes, business license taxes and other revenues for Coastal Zone short-term rentals previously not registered with the city could range from $150,000 to $320,000.
As part of the pilot program, the city wants to hire private investigators and researchers to find owners who are not paying hotel bed taxes, and hire a prosecutor to go after individuals for running illegal short-term vacation rentals.
Currently, vacation rentals, where people can stay for up to 30 days, are allowed only in areas of the city where hotels are allowed. City planners and members of the City Council say that vacation rentals in neighborhoods eat up parking and create noise and havoc for nearby residents.
In addition, at a time of a housing crisis, officials would like to see people rent their extra rooms and guest houses to members of the community who need housing.
“We do know, and the city attorney’s office is very aware, that there is a housing crisis in this city,” City Attorney Sarah Knecht said, “and we do know that one of the things that is amplifying this housing crisis in this city is the proliferation of operating short-term rentals.”
Knecht said the only way the city can get a handle on the number of illegal short-term vacation rentals and return them to long-term available on the rental market is to strengthen enforcement and hire investigators.
About 90 operators in the Coastal Zone are registered with the city and are paying transient occupancy taxes.
The pilot program also consists of hiring outside legal counsel services, at about $125,000, to assist with criminal prosecutions.
If the program continues beyond the yearlong pilot program, the city would consider hiring a full-time prosecutor.
Although Harmon said she wholeheartedly supports the program, she expressed some pause over criminal prosecutions.
“Whenever we have issues managing municipal compliance, I always have a significant amount of discomfort when we take the criminal prosecution route in the first instance,” said Harmon, an attorney. “It is just fundamentally something that I am not philosophically oriented toward, to have criminal prosecution in the first instance be the approach of city government.”