City of Santa Barbara Announces Interim Coastal Zone Short Term Vacation Rental Enforcement Policy In Response to Court of Appeal Ruling in ‘Kracke v. City of Santa Barbara’

SANTA BARBARA, CA – May 26, 2021

In response to the May 4, 2021, Court of Appeal ruling in Kracke v. City of Santa Barbara, the City of Santa Barbara today announced its interim Coastal Zone Short Term Vacation Rental (STVR) Enforcement Policy.  Consistent with the Court of Appeal’s ruling, the City will continue enforcement against unlawful STVRs in the coastal zone “on the same basis” as enforcement had been conducted before June 23, 2015.

Coastal zone and inland short-term vacation rentals (STVRs) are illegal in lower density Santa Barbara residential zoning districts, and remain so after the Kracke case.  The Kracke ruling means that enforcement actions against illegal STVRs in the coastal zone will be limited to situations where complaints are received due to tenant behavior, or other nuisance-like conditions.  The City will not “proactively” initiate vacation rental-related enforcement actions against unlawful STVRs in the coastal zone, except with respect to business licensing and transient occupancy tax collections.  In addition, the City will take enforcement action against any property-related health and safety violation in the coastal zone, regardless whether the property is a STVR.

Coastal Zone vacation rental operators that do not currently have business licenses must contact the City’s Finance Department by June 30, 2021 to arrange licensing and tax payments.  Operators can access online information about obtaining a business license at  https://civicaweb.santabarbaraca.gov/business/license/tax_application/default.asp.  Information on how to remit transient occupancy tax is available online at https://www.santabarbaraca.gov/business/license/tot/default.asp

On May 25, 2021, the Santa Barbara City Council also announced its decision to seek California Supreme Court review of the Court of Appeal ruling in Kracke v. City of Santa Barbara, or in the alternative, depublication of the case.

The City Council also directed staff to place consideration of coastal zone STVR regulatory options on the agenda for discussion at a future City Council meeting.  The date of that future discussion has not been determined.

By way of background, the Kracke Court of Appeal upheld Ventura Superior Court Judge Mark Borrell’s ruling that:

“a writ shall issue commanding the City of Santa Barbara to allow short-term vacation rentals in the coastal zone on the same basis as the City had allowed them to operate prior to June 23, 2015, until such time as the City obtains a coastal development permit or otherwise complies with the provisions of the Coastal Act of 1976, including Public Resources Code section 30600, and Title 28 of the Santa Barbara Municipal Code. (Alternative compliance may consist of obtaining a certification by the commission of an amended land use plan in the manner provided for in the Coastal Act or a waiver from the Executive Director of the California Coastal Commission.)”

The trial court generally described “on the same basis” as follows:

“Prior to 2015, it was the City’s de facto policy to allow STVRs in both commercial and residential areas. More than simply tolerating STVRs, the City issued business licenses to owners of STVRs and encouraged them through ‘amnesty’ programs to remit TOT to the City. The City acknowledges that the only time zoning enforcement action was taken against the owner of a STVR was when tenants created a nuisance resulting in a complaint.”

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