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.
FOR IMMEDIATE RELEASE
Theo Kracke won a battle in his ongoing lawsuit against the City of Santa Barbara over its decision to ban short-term vacation rentals (STVRs). Earlier this year, the City filed its second demurrer (this is the third time that the City has attempted to get this lawsuit dismissed). However, on June 26, 2017, the court overruled the demurrer and made certain findings that validate the core arguments of the lawsuit. Now that this major obstacle to the lawsuit has been removed, it will proceed in court.
According to Mr. Kracke, “We are thankful for the court’s thoughtful and well-reasoned decision. This is a victory for those people who could not otherwise enjoy the Santa Barbara coastline. This case is far from won, but the court’s decision is a big step in that direction.”
In the decision, the court ruled Mr. Kracke’s allegations constitute “development” under the Coastal Act since the decision to ban STVRs resulted in a change in the density or intensity of use of land or of access to the coastline. According to the court:
The allegations establish that the City intended to [change the density or intensity of use of land or of access to the coastline]. The legislature has decided that the provisions of the Coastal Act are to be construed liberally to accomplish its purposes and objectives. Interpreting the definition of ‘development’ as the court has here complies with that mandate. The fundamental purposes of the Coastal Act are protecting California’s coastline and ensuring state policies prevail over local concerns. Requiring the City to obtain a CDP before implementing a prohibition on residential areas of Santa Barbara’s coastline is in harmony with both.
The City argued that its actions do not constitute a “development” under the Coastal Act since the City Council’s decision on June 23, 2015, was to enforce then-existing laws. Disagreeing with the City, the court found:
[T]he City acted with a clear, and indeed stated, intent to ‘prohibit’ STVRs within the city’s residential areas, including the Coastal Zone. The allegations describe an identifiable choice between two existing yet conflicting policies — to allow and tax STVRs or prohibit them. The City Council chose to prohibit them as a deliberative body after public hearings.
In addition, the court ruled that Mr. Kracke’s causes of action for civil fines under the Coastal Act and declaratory and injunctive relief may proceed. The City must file a response to the lawsuit within 20 days.
Kracke’s lawsuit challenges the City’s ban on STVRs, alleging that the City’s actions are illegal and in contravention to various policies set forth in the Coastal Act. Central among these policies are the requirements that the general public must have affordable accommodations within and access to the Coastal Zone. In implementing its ban against STVRs, the City violated these policies and failed to apply for a Coastal Development Permit (CDP) to ensure that its actions conformed to the Coastal Act and its own Local Coastal Plan.
This decision follows another setback for the City, when in February, the court ruled against the City’s anti-SLAPP motion which argued Mr. Kracke’s lawsuit was an unlawful attempt to chill the City’s first amendment right to free speech.
In a separate ruling, the court denied Mr. Kracke’s request for a preliminary injunction (which would have stopped the City’s current enforcement efforts until the lawsuit was completed).
Travis C. Logue and Jason W. Wansor, attorneys for the Santa Barbara law firm, Rogers, Sheffield & Campbell LLP, represent Mr. Kracke.