SB Cracks Down on Illegal Vacation Rentals

City Intensifies Efforts Against Unlicensed Short-Term Rentals

Santa Barbara, a city that draws visitors from all over, is stepping up its game to tackle the growing problem of illegal short-term rentals. You know, those Airbnb or VRBO places that pop up everywhere? The city’s worried about how these rentals are affecting the availability of homes for locals and changing the feel of our neighborhoods. It’s a big issue, especially with so many people wanting to visit our beautiful coast.

Housing Crisis Gets Worse with Rentals

Councilwoman Kristen Sneddon is pretty clear: these short-term rentals are eating up housing that people could actually live in long-term. She feels like they’re messing with the whole vibe of residential areas, changing them from quiet neighborhoods to something else entirely. Other city folks agree, thinking that the money made from these rentals mainly benefits the owners, not the city as a whole. It’s like, who really wins here?

Making Money from Enforcement

Since Santa Barbara started its enforcement program back in 2019, they’ve actually collected a good chunk of change in back taxes, interest, and penalties from short-term rental operators. By the end of the 2024 fiscal year, they’d gotten 94 owners to comply. The special task force they set up as a pilot program? Turns out, it’s been a smart move financially. In its first two years, it brought in over $2.6 million from unpermitted rentals, and they did it spending less than half of what they were budgeted. That’s pretty efficient!

Specifics on What They’ve Collected

The enforcement efforts have really paid off. From 2019 through July 2024, the city collected $823,795 in overdue taxes, interest, penalties, and fees. Of that, $487,393 came from rentals in the coastal zone and $336,402 from inland areas. In its first year (2024), the pilot program alone raked in over $487,000 from unpermitted coastal properties and over $336,000 from inland ones. The second year was even better; they spent just $233,000 of their budget and collected nearly $1.8 million from 230 unpermitted rentals. That’s a lot of money that’s now going back to the city.

Dealing with Non-Compliance

While most property owners are playing by the rules, some aren’t. The city’s had to take legal action in a few cases to get people to comply. The task force’s main goal is compliance, and out of 230 illegal rentals they looked at last year, 182 owners voluntarily cleaned up their act. Right now, there are 26 cases still being worked on, and the city has filed 22 lawsuits in Santa Barbara Superior Court. It seems like they’re trying a mix of persuasion and legal pressure to get everyone on board.

What Might Change Next?

The Santa Barbara City Council is looking at a few changes to make their short-term rental rules even stronger. They’re trying to figure out the best way to handle “nuisance properties” and make sure there are still homes available for people who want to live here permanently.

Business Licenses for Everyone

City leaders want all vacation rental owners to get a business license. This should make things more official and hold operators more accountable.

Bigger Fines

To discourage people from operating illegally, the council is thinking about increasing fines. The idea is to make it less appealing to break the rules.

Inspections Allowed

A big part of the proposed changes would give the city the power to inspect these rental properties. This way, they can check in person if everything’s up to par with safety and other rules.

Checking Tax Collections

The city also plans to keep a closer eye on Transient Occupancy Tax (TOT) collections. They want to make sure short-term rental operators are paying the city everything they owe.

Home-Sharing Option?

The council is also talking about a “home-share” option, where the owner actually stays at the property while guests are there. Councilman Mike Jordan thinks this could make owners more responsible, unlike some short-term rentals where it’s hard to find someone to talk to if there’s a problem.

Zoning and Where Rentals Are Allowed

Right now, short-term rentals are allowed in areas zoned for hotels and in the coastal zone. But the city is looking at specific spots where more rules might be needed. They’re also debating whether short-term rentals should be seen as homes or businesses, which could really change how they’re regulated. Just so you know, they’re strictly forbidden in areas zoned for single-family homes. And if you have an accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU), you can’t rent it out for less than 31 days at a time.

Homestays vs. Short-Term Rentals

It’s important to know the difference between a homestay and a short-term rental. For a homestay, the owner or a long-term renter has to be living there when guests are present. A short-term rental doesn’t have that same requirement. This distinction matters a lot when it comes to following the rules.

The City Attorney’s Role

The City Attorney’s Office is in charge of the Short-Term Rental Enforcement Program, which kicked off on August 1, 2023. If you see something that looks like a violation, you can call (805) 897-1934 or use the online complaint form on the City Attorney’s Office website. In the coastal zone, enforcement mostly happens when someone reports a problem, especially if it involves bad guest behavior or other disturbances, particularly at properties without ADUs or JADUs.

What Operators Need to Know

All legal short-term rental operators in Santa Barbara have to collect and pay Transient Occupancy Taxes (TOT) from their guests. Plus, as business owners, they need to pay city business license fees every quarter. Even if you’re operating illegally, you could still owe back taxes and fees if you get caught. The city is pretty firm on this: every short-term rental operator needs to collect and pay these taxes.

Getting a Permit

To legally run a short-term rental in Santa Barbara, you need a land use permit from the city’s planning department. Just having a business license or a TOT certificate doesn’t make an illegal rental legal if it’s in a prohibited zone. The permit process involves proving your property is in an acceptable zone, submitting a plan for how it’ll operate, and paying fees. Usually, acceptable zones are certain coastal neighborhoods zoned for hotels. Once you have the permit, you can then get the necessary tax certificates and business licenses. This clear path to getting permitted is super important if you want to operate legally and avoid trouble as the city steps up its enforcement.

Neighborhood Feel Changing

Councilwoman Wendy Santamaria feels that short-term rentals don’t really benefit the city much, with most of the advantage going to property owners’ profits. She’s even suggested that if an owner doesn’t want to rent their place long-term, maybe the city could charge a vacancy tax. It’s a big debate about the economic and social ups and downs of the short-term rental market. As one resident, Strickland, put it, “The feel of the neighborhood has changed, and it is a sad thing for Santa Barbara homeowners,” which seems to capture how a lot of people feel about the changes happening.

Santa Barbara County’s Rules

It’s worth noting that Santa Barbara County has its own set of rules for short-term rentals and homestays in areas that aren’t part of a city. The County Board of Supervisors has been focused on state-mandated projects, which has put a pause on work for the Coastal Short-Term Rental Ordinance. However, the county is offering guidance to owners to help them follow local rules, Transient Occupancy Tax (TOT), and Tourism Business Improvement District requirements.

County Inland Area Rules

In the county’s inland areas, you need a permit from the Planning and Development department to operate short-term rentals or homestays. It’s against the law to advertise or rent property on a short-term basis without one. You also have to follow development standards, including rules about ownership, safety, how many people can stay, parking, and noise.

County Coastal Zone Rules

Currently, there aren’t any specific regulations for short-term rentals and homestays in the coastal zone of Santa Barbara County. However, owners and operators everywhere in the county, including the coastal zone, still need to follow the County’s TOT rules. You can check your property’s address on the Santa Barbara County Land Use and Zoning map to see if it’s in an unincorporated county area or within a city’s jurisdiction. The County Board of Supervisors might revisit the Coastal Short-Term Rental Ordinance sometime in the future, possibly in Fiscal Year 2025-2026.

Key Things for Rental Operators

If you own property and are thinking about or already running a short-term rental in Santa Barbara, you really need to understand the zoning rules and what permits you need. Operating without the right land use permit, even if you have a business license or TOT certificate, is considered illegal. Following city rules, including collecting and paying TOT, is super important for operating legally. The city’s ongoing efforts to improve enforcement and update its regulations show a clear move towards making the short-term rental market more accountable.