Success in Short Term Rental Lawsuit against City of Santa Barbara!

We have excellent news in our battle against the City of Santa Barbara!

As you know, in November 2016, Theo Kracke of Paradise Retreats World Class Vacation Rentals personally sued the City of Santa Barbara, alleging that its prohibition of Short Term Rentals violated the California Coastal Act…and we finally won!

After 2 ½ years of tough litigation where the City filed 3 motions to dismiss our case, we finally had our day in court. After trial, we achieved our goal of preventing the City of Santa Barbara from enforcing its ban against short-term vacation rentals in the Coastal Zone of Santa Barbara City.  The victory has been highly publicized in legal circles and will influence STR policy and judicial decisions throughout California. I would like to take this opportunity to acknowledge the excellent legal analysis & litigation skills of our attorneys: Travis Logue & Jason Wansor of Rogers, Sheffield, and Campbell.  This was a monumental effort; the cost of which exceeded $300,000.  It has all paid-off in the satisfaction that justice prevails when facts & evidence are presented to a rational decision-maker. A special Thank You to the Honorable Judge Mark Borrell.

The first ruling (filed on March 8, 2019) finds that the City violated the CA Coastal Act by illegally banning STRs in the Coastal Zone.  This ruling states that a writ shall issue ordering the City to once again allow STRs in the Coastal Zone of Santa Barbara as it did prior to June 2015 until such time as the City obtains approval by the CA Coastal Commission for a plan to regulate STRs. The second ruling (filed on May 16, 2019) concluded that the City did not “knowingly and intentionally” violate the Coastal Act so as to be liable for fines payable to the CA Coastal Commission.

We are thrilled that the court embraced our arguments that the City acted improperly when it eliminated an entire class of lower-cost visitor serving accommodations on the coast.  This is a victory for many, including traveling families who could not otherwise enjoy the Santa Barbara coastline.

The bottom line is that short term rentals in residential neighborhoods in the Coastal Zone of the City of SB will be allowed for the foreseeable future.  The City is working with the Coastal Commission to update their Local Coastal Program and how to reasonably regulate STVRs without banning them entirely.  Presently, the City is not issuing new business licenses to STR operators, nor allowing them to collect Transient Occupancy Tax for their rentals.  However, the City has expressly stated it will not be enforcing zoning violations against STRs in the Coastal Zone of SB City (the City Attorney even put this on record in our most recent court hearing).

Going forward, it is unlikely that the City will be able to obtain approval from the Coastal Commission for any unreasonably restrictive STR regulations in the Coastal Zone of SB.  Further, we have heard our victory may influence the City’s STR policy in areas outside the Coastal Zone. One goal is to catapult our win to spark a renewed conversation on citywide STR policy.

There is a good possibility that the City could appeal these rulings.  However, we will be working hard to prevent this.  We are lobbying the SB City Council against appealing the judgment, and to instead focus its time and resources on drafting fair STR regulations that comply with the CA Coastal Act.  Countless communities in California have done the same thing, and Santa Barbara can create its own regulations of STRs based on any one of these successful models.

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