Santa Barbara’s Short-Term Rental Ordinance Not Ready Yet

Santa Barbara’s ordinance committee will take more time to hammer out the details of the city’s proposed Short-Term Rental (STR) Ordinance, after discussion during Tuesday’s committee meeting ran long due to a flood of public comments and questions about the plan to regulate vacation rentals citywide.

Tuesday’s hearing was the latest in a string of public meetings regarding the proposed ordinance, which is intended to bring order to the city’s informal system of permitting STRs depending on location. When the city began chipping away at illegal STRs in 2023, there were an estimated 1,300 unpermitted rentals operating within the city.

The city’s proposed ordinance outlines where short-term rentals will be allowed, how the city will address enforcement, and how homeowners can permit their properties as homeshares in specific areas. The proposal has been guided by a team of city planning staffers who have ushered the early draft through the city review boards. Most recently, the city’s Planning Commission reluctantly sent the plan forward despite concerns about the details of the ordinance.

On Tuesday, the version presented to the Ordinance Committee was much the same as one the Planning Commission saw a month earlier, with a zoning-based system dictating where STRs would be permitted. STRs would be allowed in the coastal zone, except in areas zoned specifically for single- and two-family residential. In the inland portions of the city, STRs would be allowed in areas zoned for commercial and where hotels are currently allowed, near the downtown corridor, upper State Street, or near San Andres Street and Milpas Street.

Planning staff did not formally pursue the Planning Commission’s recommendation to look into alternative methods, such as a lottery system or a cap on the number of STR’s allowed in the city. There is a push to have a finalized ordinance ready for City Council adoption by May 2026 to allow for the Coastal Commission to weigh in by late this year or early 2027.

During Tuesday’s hearing, Project Planner Laura Bridley said exploring additional methods would take “too long at this point,” and said staff’s recommendation was that the “zoning-based approach is best for Santa Barbara at this time.”

More than two dozen members of the public spoke up during the Ordinance Committee hearing, with some coastal neighborhood residents speaking in support of the city’s proposed STR regulations, while vacation rental operators and tourism industry professionals raised concerns over the potential impacts of the ordinance.

Kathy Janega-Dykes, CEO and president of Visit Santa Barbara, said she was worried that there has not been a comprehensive study about the true impacts an ordinance would have on both the hotel and housing sectors. She urged the city against moving forward on the assumption that regulating STRs would translate to additional hotel stays or long-term rental housing units.

“Before making decisions that could impact revenue, visitation, and housing we should take the time to study these dynamics, to understand the potential loss of revenues, the potential loss of visitors, and the actual housing outcomes,” she said.

Representatives from economic organizations such as the Santa Barbara South Coast Chamber of Commerce and the Santa Barbara County Taxpayers Association (SBCTA) voiced their opposition to the proposed ordinance. 

SBCTA Executive Director Tom Widroe said moving forward without a fiscal impact study would be “irresponsible,” and asked that the city bring the proposal before the Budget Committee to address the laundry list of concerns about the plan.

“I know you as councilmembers care about the city, you care about the budget, you care about making good decisions, and I encourage you to do it the right way,” Widroe said.

The Ordinance Committee was not able to hear all the public comments before time began to run short on the two-and-a-half-hour meeting. To allow for additional public comment and committee deliberation, Ordinance Committee Chair Oscar Gutierrez asked that the meeting be continued to another session.  The committee is expected to schedule more time for discussion next Tuesday.