Aiming to make the short term vacation rental process more difficult, the city of Santa Barbara is looking to create an ordinance that will increase regulation, and decrease the commercialization of local neighborhoods via a costly permit process.
Homeowners across the city have complained of loud visitors, excessive vehicle traffic and other disruptions. For these locals, Airbnb-type rentals are dominating neighborhoods, leaving communities isolated in a sea of ever coming-and-going vacationers.
At the same time, the City of Santa Barbara has been trying to crack down on unpermitted vacation rentals to collect transient occupancy taxes. Within Santa Barbara’s housing crisis, many argue that any available units should be offered to local residents.
Against this backdrop, the 3-member Ordinance Committee on Tuesday voted to increase regulation.
For those in favor of STR regulation, this is a long-sought milestone. The Tuesday meeting marked the third time the Committee saw the ordinance, and the fruition of over 14 years of deliberation over STRs in Santa Barbara.
This delay is the result of gridlock in some of Santa Barbara’s most polarizing debates: tourism economy vs. local community, visitors vs. neighbors and vacation spaces vs. housing. Those arguing against the ordinance, which will create a standard permit process to rent out a property, are concerned about economic and fiscal loss to the city.
“Two million dollars is not a big enough number to be selling out our neighborhoods,” said committee member Kristen Sneddon, referring to the reported revenue gathered since January from both legal and illegal STRs.
The goal of the ordinance is to create a viable permit path for those who wish to rent out their homes.
With a permit set to cost $3,334 plus an annual renewal fee of $2,897, the process may de-incentivise STRs in residential areas. Other regulations include prohibiting licenses in hire-fire risk areas, revised parking and liability insurance requirements, and limiting the number of licenses per property owner.
Currently, the city regulates STRs as hotels. They are legal in zones where hotels are permitted, and in certain coastal zones. STRs are prohibited in single-unit and two-unit residential zones, also called single-family zones, but have infiltrated residential neighborhoods with little regulation. The ordinance would apply to newly proposed areas.
Amid already grim housing-crisis conditions, proponents of the ordinance said they feel that the sense of community in their neighborhoods is being choked out by commercial interest.
“I think this (ordinance) will go a long way to stop the commercialization of the Mesa and neighborhoods from becoming outsized income streams for investors,” said long-time Mesa resident Patricia Stark during the public comment section of the meeting.
The Mesa neighborhood is facing the brunt of the vacation rental industry. According to data provided in the staff report, if every eligible site was converted to an STR or homeshare, the Mesa would see around 1,738 homeshares. Stark said her neighborhood doesn’t have the inventory to meet this intense demand.
Opponents of the ordinance said it represented poor, non-sufficiently researched policy-making, and will have negative fiscal impacts on businesses and locals themselves. One speaker said the 101 freeway construction is about to be complete, which will bring a flood of people into the city with nowhere for them to stay.
Another speaker against the ordinance noted that less than 1 percent of nuisance complaints are linked to STRs in Santa Barbara. Noise pollution is a primary grievance that proponents of the ordinance attribute to STRs.
“Slow down, be transparent before you lock in a policy that risks harming residents on both compliance and fiscal grounds,” said Tom Widroe, who represented the Santa Barbara County Taxpayers Association at the meeting.
Commission members Sneddon and Jordan both voted to forward the ordinance to the city council. Commission Chair Oscar Gutierrez abstained.
In follow-up questions to the staff, Gutierrez shared an anecdote where he felt he was racially discriminated against in being continuously rejected for an Airbnb rental, while his friend with a white presenting last name was immediately accepted. When both met with the property owner, they were told they would have to pay double the listed rate.
Gutierrez contacted Airbnb, seeking discrimination data involving a host denying people of color, but was told that Airbnb had no means of keeping such information.
“What safeguards can we put into place so that people of color are not discriminated against when looking into short term rentals?” Gutierrez said to the ordinance staff, who similarly had no plan to record discrimination data.
He referenced a history of people of color being denied to stay at hotels because of their race. Because this issue could be quietly perpetuated through STRs, Gutierrez said that it is an important issue to him.
The staff hopes to see the ordinance adopted in September, with review from the California Coastal Commission in early 2027. In the meantime, they will begin outreach to existing STR operators.
