In an about-face from its decade-long position, the Santa Barbara City Council on Tuesday moved toward eliminating controversial zoning information reports, which are widely opposed by the real estate community.
The council voted 5-2 to put on next week’s agenda a proposal to eliminate ZIRs.
Santa Barbara Mayor Cathy Murillo urged her colleagues to join her in requesting a report from the city attorney about the effectiveness of ZIRs before moving to repeal them.
“I appreciate the Santa Barbara Association of Realtors looking out for their interests,” Murillo said. “I’m looking out for the interests of the entire city. It would be the Wild West in this climate, in this real estate environment, if we didn’t have this check.”
The real estate community gathered more than 7,000 signatures to qualify a measure for November’s ballot to eliminate ZIRs from the city process.
The council on Tuesday had the option of repealing ZIRs immediately, placing the item on the November ballot or directing City Attorney Ariel Calonne to create a report before moving ahead. Instead, at the urging of Councilman Jason Dominguez, the council plans to take a vote next Tuesday on whether to eliminate ZIRs. It would take five votes to approve the change.
A majority of the council members said they wanted to eliminate ZIRs, despite concerns raised by Calonne during the meeting.
“I am concerned that repealing the ZIR ordinance will be inconsistent with the city’s general plan,” Calonne said, explaining that they are mandatory requirements in the city’s Housing Element.
The information reports are currently required of the homeowner at the time of a sale. They are intended to flag past city permits and approvals of any work done on the property as well as any potential violations of city ordinances on the site. The information reports cost about $500 for an interior review and $400 for an exterior review. The fees are doubled for an expedited rule.
Members of the real estate community, however, say they aren’t as concerned about the costs of ZIRs as they are about the potential harm to a sale. If a ZIR uncovers illegal dwelling units or unpermitted work on the site, the city requires that the work be fixed, repaired or demolished. Such problems often spook potential buyers, who would be reluctant to buy a piece of property with known illegal work that could cost tens of thousands of dollars to repair.
The ZIRs themselves are sometimes flawed. Critics contend that ZIRs are inconsistent. An information report on a property might reveal no permitting issues, but a ZIR on the same property sold decades later could uncover illegal work. The quality of the information reports varies greatly depending on the inspector and whether it’s an interior or exterior review.
Thomas Schultheis, president of the Santa Barbara Association of Realtors, said ZIRs are unreliable. Realtor Bob Hart said flawed ZIRs could cause a home sale to collapse.
“The ZIR has caused irreparable harm, and when there is harm, the level is huge,” Hart said.
Councilwoman Meagan Harmon said the city should streamline the process and do away with zoning information reports.
“I have had more people talk to me about ZIRs than anything else in the past few months,” Harmon said. “I want to increase home ownership, particularly first-time homeowners.”
Murillo tried hard to sway her colleagues not to jump to a quick decision about the ZIRs. She urged them to wait to receive a report from the city attorney. ZIRs, she said, are a useful tool to help preserve the character of neighborhoods. Homeowners could be adding on illegal units and creating unsafe living conditions if the city doesn’t have the ability to review homes at the time of sale. She said she wants to hear from the neighborhood association groups.
“I am a supporter of the ZIR process,” Murillo said. “Since 2009, this council has stood by the ZIR process, including Frank Hotchkiss, who was a real estate agent. Sending this to the ballot will give everyone an opportunity to weigh in.”
She swayed Councilwoman Kristen Sneddon, at least for the time being. Sneddon said during the meeting that she wants to eliminate ZIRs because they are murky and inconsistent, which creates confusion for the buyer and the seller. Still, she sided with Murillo on slowing things down and wanting more information.
“I don’t want to be hasty and ill-informed,” Sneddon said.
Murillo said she was “disappointed” with her colleagues for not seeing the bigger picture and the real estate community’s motives.
“I know it’s unpopular,” Murillo told the dozens of people in the crowd. “It’s your business to sell houses.”
— Noozhawk staff writer Joshua Molina can be reached at jmolina@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.
