Santa Barbara Support For Fair Short Term Rental Regulation | Save The RentalsSave the Rentals Santa Barbara

Why the Campaign to Save the Rentals of Santa Barbara?

Short Term Rentals (STRs) are currently prohibited in the City of Santa Barbara. STRs are also prohibited in the County of Santa Barbara. Fortunately, the CA Coastal Commission (CCC) has prevented SB City and County from eliminating STRs in the Coastal Zone of both of these areas. However, both the City & County are likely to propose very limiting regulations that they hope the CCC will approve for the Coastal Zones.

It is a crucial time for all community members who feel that well-managed (and regulated) Short Term Rentals provide great benefits to our community.

It concerns us greatly that decisions were made based on two beliefs that are not supported by formal reports or statistics:

Our decision makers incorrectly believe that STRs are a leading cause of the reduction in supply of affordable housing
Our decision makers incorrectly believe that STRs are degrading the quality of residential neighborhoods

Although there are examples of both of these issues occurring, we are certain that STRs are not a leading cause of our shortage of affordable housing, and we are also certain that the majority of STRs are well-managed, and that they are actually enhancing the residential neighborhoods in which they operate.

The decision to prohibit ALL short term rentals is not the correct solution managing this modern issue. It is an overreaching solution which has city-wide & county-wide negative effects. There are much better solutions which can address the concerns of housing and neighborhood quality, while preserving the economic and social benefits provided by short term rentals.

We Support Fair Regulation of Short Term Rentals

Please click below to see a detailed plan for the fair regulation of Short Term Rentals in the city and county.

A Plan for Fair Regulation of STRs PDF | 135 kb, updated October 20, 2017

Our mission is to share the facts regarding short-term rentals and their impacts on our community. This is a complex issue where emotions, opinions, and solid facts must be evaluated before the best solution can be implemented.

The citizens of our community are likely concerned about the growth of the vacation rental market. There is a feeling that the vacation rental market is contributing to the low vacancy rate of rental homes. This is a valid concern, however there are many more important reasons for the housing shortage. There are also valid feelings about negative impacts on the character of neighborhoods with regards to noise, parking, and other nuisances. These issues are usually caused by neglectful management of those rentals, and can be prevented with Fair Regulation (and enforcement of professional management standards).

There are proven solutions from cities that have already addressed this issue. These locations now have fair and enforceable ordinances that maintain the integrity of neighborhoods, increase tax revenues, and result in a thriving modernized tourism industry. When properly set up and administered, Short Term Rentals bring visitors, family, former residents, temporary workers, medical personnel and professors to our area, while providing additional year-round business to local merchants, stores and service providers.

Below are proven facts from case studies and economic impact reports that support the Fair Regulation of short-term rentals:

Short-term rentals benefit communities in many ways

Transient Occupancy Tax (TOT) revenues from short term rentals support the community
1. Last year, the City and County collected a combined approx. $2.6 million in Transient Occupancy Taxes (TOT) with only a fraction of STRs paying TOT. With fair regulations that ensured full enrollment by all STRs, the TOT revenues would triple to approx. $3.6 million per year to the City of Santa Barbara, and quadruple to approx. $5.6 million per year to the County of Santa Barbara. That is a total of $9.2 million per year in potential TOT revenue that is lost by the prohibition of STRs.
2. TOT revenues cannot be ignored. Important City & County services are being reduced or eliminated due to budget constraints. If all STRs were required to register and pay TOT, approximately ~$3,000,000+ in revenue could be used support any of the following services:
  1. 30 new SB City Police Officers could be hired
  2. The SB County Sheriff $2.2m deficit could be eliminated
  3. Parks & Recreation budgets could be increased
  4. The County budget reserve deficit for 2016 could be eliminated
  5. Department of Alcohol, Drug, & Mental Health Services $4.6m deficit could be greatly reduced
  6. Affordable housing solutions could be implemented with these revenues
  7. There are many other important programs that can be financed or expanded through these increased revenues
  8. An even distribution of the TOT revenues could benefit many programs equally
STRs are a major source of revenue for the City and County of Santa Barbara, generating about $470 million in overall economic activity, and creating approximately 5,000 jobs.
1. Reference Economic Impact Report of STRs in Santa Barbara PDF | 892 kb
There are other important uses of short-term rentals.
1. Who are the people who stay in short-term rentals?
  Family members who come to town for medical surgery procedures. Former residents and students who know the town well. The friends and families of local residents who come to visit, when there is not enough space in their homes (and hotels are either unavailable or too expensive). Families on vacation looking for a more affordable “home-like” experience. Temporary workers, professors, medical personnel & families relocating for employment. Executive housing, insurance claim temporary housing, housing needed during remodels, people looking to move to our area.
Owners of short-term rentals benefit by the extra income provided by short-term rentals
1. Who rents their houses out as short-term rentals?
  Primary residents of houses, retired people, and owners with flexible schedules. Second-home owners who live elsewhere part of the year, and owners who bought houses specifically to be used as part-time residency (with ownership costs offset by short-term rentals).

The negative effect of STRs on neighborhoods is overstated

1. STR properties generate less nuisances than ALL properties in residential neighborhoods
  1. See the recent economic study which concludes this:
    STR Effect on Neighborhoods Study PDF | 967kb

The negative effect of STRs on the supply of long term rentals (and affordable housing) is overstated

1. 1. STR properties affect 1/10th of 1% of the long-term housing supply
    1. See the recent economic study which concludes this:
      STR Effect on Housing Study PDF | 700 kb

There are unintended negative effects of a prohibition of short-term rentals

1. 1. Short-term rentals will go “underground” and all tax revenue benefits will be lost
  2. Neighbors will still have to deal with “legal on paper” short-term rentals because determined property owners will use techniques for “working around the system”
  3. It sends an “unwelcoming” message about how our community feels towards vacation visitors
  4. Short-term rental visitors will choose to vacation in other cities that offer vacation rental accommodations. These travelers and their families generally will not choose hotels if no short-term rentals are available.
    1. Tourism is an amazing source of economic activity in that the dollars come to our region, and then the people leave and live full-time somewhere else. In other words, tourism is generating economic activity without taking up new housing units. If instead that same level of economic activity was replaced by a new office building and its employees, then those people will be needing local housing units and soaking up the supply. If you think it through, curtailing short-term rentals and thereby dialing back the economic benefits of the tourism industry, could very well result ina legitimate taking of housing supply from a more housing impactful economic source that becomes the alternative to the tourism dollar.
  5. It has been proven in Kauai, HI & Palm Desert, CA that prohibition of short-term rentals does not work. Those areas have reversed their prohibitions, implemented fair and simple short-term rental regulations, and are now considered successes.

A fair and simple Short Term Rental Ordinance is a successful solution to this issue (as proven by other cities)

1. 1. We have created an outline that presents the over-riding principles that will allow STRs to co-exist within current bylaws and zoning. These principles can be used to craft a simple and effective Short-Term Rental Ordinance that ensures the benefits of STRs are realized, and negative effects are minimized (or eliminated).
    1. Please take a minute to understand that there is a balanced solution to this issue by reading our proposal titled A Plan for Fair Regulation of STRs PDF | 127 kb
  2. The US Conference of Mayors (USCM) supports fair and simple Short Term Rental Ordinances
    1. See Exhibit B – US Conference of Mayors PDF

A few sources:

News

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!

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Court Rules Against City in Demurrer to Vacation Rental Lawsuit

June 30, 2017
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.

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Residents Fed Up with Short-term Rental Permit Process

May 16, 2017
The battle over short-term rentals is far from over in Santa Barbara. Most rentals were banned by the city council, but residents living in an areas where it is permitted are running into difficulty when trying to get city permits.

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