May the 4th be with Theo Kracke.
The owner of Paradise Retreats on Tuesday won a five-year case against the City of Santa Barbara over vacation rentals in the coastal zone.
“We’re absolutely thrilled,” Kracke said. “The city fought us every step of the way. Let’s hope city leaders finally accept the fact that short-term vacation rentals are a permissible use in the coastal zone. Now is their prime opportunity to draft fair regulation rather than continue to waste taxpayer money and seek review by the California Supreme Court.”
City Attorney Ariel Calonne did not respond to Noozhawk on Tuesday.
Kracke’s lawsuit alleged that Santa Barbara’s 2015 ban on short-term vacation rentals was illegal and a violation of the California Coastal Act, which requires that the general public must have affordable accommodations within and access to the coastal zone.
The City Council had allowed short-term vacation rentals for years, and collected 12% hotel bed taxes from them. The city, however, as political winds shift, voted to ban vacation rentals in the coastal zone as a way to preserve affordable housing in the city.
They reasoned that property owners would rent the residences to locals instead of to out-of-town vacationers, if short-term vacation rentals were not a legal option.
Kracke first won the suit in February 2019, after Ventura County Superior Court Judge Mark Borrell ruled that Santa Barbara must allow short-term vacation rentals in the coastal zone on the same basis as it had allowed them to operate before banning them in 2015. He also ruled that the city failed to apply for a coastal development permit to ensure that its actions conformed to the state Coastal Act and its own Local Coastal Plan.
The city appealed the decision, and on Tuesday it lost again.
“This published decision has statewide implications,” said Kracke’s lawyer. Travis Logue with Rogers, Sheffield & Campbell. “It’s a major victory for Californians who prefer affordable vacation accommodations along the coast. Our client deserves huge credit for waging this battle. He’s taken arrows from all sides and faced ridicule by the City Attorney’s Office. Anyone who uses or operates STVRs in Santa Barbara should thank him. Given the city’s terrible financial condition and depressed tax revenue, let’s hope the city embraces reasonable regulation. Miracles do happen.”
Short-term rentals, or STRs, are barred in residential zones in the city. In June 2015, the City Council voted to enforce its long-standing zoning regulations after years of turning a blind eye to zoning violations.
STRs are permitted in zoning districts that allow hotels, which are mostly commercially zoned districts.
According to Tuesday’s ruling: “We agree with the trial court that ‘the city cannot credibly contend that it did not produce a change because it deliberately acted to create a change’ in coastal zone usage and access. This change constituted ‘development’ under the Coastal Act and, as such, required a CDP or, alternatively, an LCP amendment certified by the commission or a waiver of such requirement. Without the commission’s input and approval, the court appropriately struck down the city’s STVR regulation in the coastal zone.”
Kracke said the city is responsible for his legal fees.
Santa Barbara Mayor Cathy Murillo said she didn’t have information on the ruling, but offered a general comment about the situation.
“There is such a scarcity of housing in our city that apartments and houses should be available as rentals for working people, as homes for local residents, and not used as commercial enterprises for vacation rentals,” Murillo said. “That said, I’m sure we will meet in closed session as soon as possible to discuss what to do next.”
— 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.