The City of Santa Barbara is looking to legalize short-term vacation rentals nearly citywide, but make it much harder to operate them.
On Tuesday, the City Council is to discuss a program that regulates short-term rentals with flat fees, performance standards and on-site inspections, among other new rules.
Currently, short-term vacation rentals, where people stay for no more than 30 days, are only allowed in zones where hotels are permitted. But homeowners are operating vacation rentals all over the city, and officials are only collecting transient occupancy taxes from about 101 operators.
Santa Barbara has about 1,560 advertisements on web-based rental platforms, which represents 1,119 unique short-term rental units citywide, according to a staff report for the meeting.
That represents a 27% increase in the number of short-term rentals from the previous year. Of those, 19 legal rentals and 82 unpermitted rentals are paying transient occupancy taxes to the city.
For many homeowners, renting out their houses as a weekend or weeklong destination is a quick and easy way to make money, and pay for monthly mortgages or property taxes.
But Santa Barbara is also experiencing a housing crisis, and city officials would prefer that residences with availability be rented to locals.
“Operating a residential unit as a short-term rental is typically far more lucrative than renting the unit on a long-term basis, which can encourage the loss of long-term housing, increase real estate speculation and inflate housing costs,” Timmy Bolton, project planner for the city, wrote in a staff report.
“Short-term rentals also increase the demand for services and low-income housing because of the associated support network of cleaning and maintenance staff. There is a perception that all visitors, including those using short-term rentals, use more resources and are less concerned with local environmental measures like water conservation.”
According to the proposal, residential units would only be eligible for short-term rental if the unit is otherwise occupied by the owner as a primary residence, the unit is not deed-restricted affordable housing or a type of housing that prohibits short-term rental, the unit is located outside of High Fire Hazard Areas, and there are no open or pending enforcement cases involving the property.
The short-term rental permitting program would operate on an annual basis with flat fees, performance standards and on-site inspection, according to the staff report.
The permit would be issued to a specific person who must have a business license, sign an affidavit stating that all applicable regulations will be followed, retain records for auditing, share the nuisance response plan with neighbors, and post the permit number in all short-term rental listings.
In addition, the city would hire a “a web monitoring firm” that would identify illegal listings, and require that hosting platforms delist illegal rentals. Short-term rentals would be required to have a surety bond and pay the same transient occupancy tax as hotel operators. The city’s hotel bed tax is 12%.
The other proposed requirements include maintaining occupancy limits that are based on bedroom count; having sufficient off-street parking; maintaining a nuisance response plan with host-provided 24/7 response; not allowing special events and commercial activities, like weddings and corporate retreats; following quiet hours; providing a code-of-conduct to guests and posting an information packet; only renting out the entire unit to one group of guests at a time; having low-flow plumbing fixtures; and only allowing a total rental period of 90 days per year.
City Councilwoman Meagan Harmon said the city must take action to regulate short-term vacation rentals.
“The proliferation of short-term rentals in Santa Barbara has had a severe negative impact on not only the availability and affordability of housing stock here, but on the fabric of our neighborhoods,” she told Noozhawk.
“Regulation in this area is complicated, both practically and legally, but it is essential that we move forward to develop a workable policy that minimizes the existence of short-term vacation rentals to the greatest extent possible.”
Harmon said Tuesday’s meeting is the start of the conversation and that the proposed framework is on target.
“It totally prohibits housing units used solely as short-term vacation rentals, while allowing residents the freedom to rent out their primary home,” she said.
“As always, the devil is in the details, but I’m glad we’re focusing on this policy now. I don’t believe we’ll be able to make any truly lasting headway on our housing crisis without it.”