Council Declares Vacation Rental Emergency

Short-Term Vacation Rental Owner James Fenkner Slams Santa Barbara City Council over Ordinance ‘End Run’

James Fenkner at the Santa Barbara City Council meeting Tuesday March 3, 2020 | Credit: Daniel Dreifuss

James Fenkner really isn’t everywhere; he just seems like he is. Outspoken, brash, and needlingly smart, Fenkner can frequently be found battling what he terms the overreach of political correctitude at the Santa Barbara school board. But this Tuesday, Fenkner — who owns a couple of vacation rental units — was busy engaging in hand-to-hand combat with the Santa Barbara City Council over City Hall’s ordinance that all but bans short-term vacation rentals within city limits. 

In fact, Fenkner has sued City Hall over this ordinance, charging it improperly equates all short-term rentals with hotels, when in fact they are very different entities. Judge Thomas Anderle, it turns out, agreed with Fenkner in a preliminary ruling issued last November. This ruling, in turn, prompted City Attorney Ariel Calonne to ask the council to approve an emergency ordinance affirming that City Hall has consistently regulated vacation rentals — and all short-term rentals — as if they were hotels since 1983. 

This Tuesday, Fenkner blasted the emergency move as “an end run” around the city’s normally exhaustive legislative process. “This is absolutely ridiculous,” Fenkner charged. “An emergency is a Montecito mudflow; an emergency is — and let’s hope it’s not — the coronavirus.”

Fenkner’s lawyer, Joseph Liebman, piled on in similar fashion, noting that he’s sued City Hall “many, many times” and nearly always won. “A pending loss at trial is not an emergency,” Liebman pointedly noted.

The council, however, did not agree. Instead, it voted unanimously to back Calonne’s play, though with some misgivings expressed along the way. Councilmember Michael Jordan insisted, for example, that City Hall has been anything but consistent with regard to the legality of vacation rentals, turning a blind eye at times, collecting taxes from them at others, and adopting its current zero-tolerance policy only five years ago. Regulating them as if they were hotels, Jordan said, no longer works. But even Jordan embraced the emergency ordinance, arguing that if it saved taxpayers the legal costs incurred by a courtroom defeat, that would be worth it. 

If and when Fenkner’s case against City Hall finally goes to trial, it’s uncertain what prophylactic value the council’s emergency declaration will actually have. Regardless, Councilmember Eric Friedman argued the declaration would help protect City Hall from the crossfire of ambiguity it now finds itself caught in. 

At the same time the state legislature is insisting cities throughout the state build more housing, Friedman noted, the California Coastal Commission is insisting that short-term vacation rentals must also be allowed in coastal zones as lower-cost accommodations that make the coast less cost prohibitive to potential visitors of all income levels. (The council imposed strict restrictions on vacation rentals on the grounds they reduced the city’s housing stock.) 

Fenkner’s attorney highlighted a letter just issued by Coastal Commission staff arguing City Hall’s insistence that short-term rentals can be regulated as hotels is not just legally flawed but inconsistent with the city’s own policies. Hotels are defined in city code as short-term accommodations of six bedrooms or more that offer no kitchen amenities. Most short-term rentals have fewer than six units, and almost all offer kitchens. 

Councilmembers were persuaded, however, that without the city’s hotel-based ordinance, there would be no legal defense against short-term rentals from encroaching on single-family neighborhoods. And that, they agreed, was indeed an emergency. 

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