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Vacation Rentals and Home Sharing in Santa Barbara Update

Vacation Rentals and Home Sharing in Santa Barbara Update

July 21, 2015

It’s been a few weeks since the Santa Barbara City Council made it very clear that they would not be legalizing “Vacation Rentals” in Santa Barbara. With so many opinions, questions, incorrect facts swirling and homeowners concerned as to the fate of their rentals, I decided to get to the bottom of what will be a lengthy process towards what seems to be, good reform and accountability. A phone call to the City of Santa Barbara division assigned to Vacation Rentals was the best call I could have ever made!

How did this all start with vacation rentals in Santa Barbara?
We live in a destination town. People visit here from all over the world, and as much as they love the idea of staying in our many wonderful hotels, they also prefer to dive right into our lifestyle and enjoy the comforts of home while here. Tourism is up and the local economy in Santa Barbara has seen a boom in revenue with more cruise ships and other activities bringing Santa Barbara into the spotlight. With the increasing prevalence of VRBO, Flipkey and now Airbnb, more owners are renting vacation homes in Santa Barbara than ever before. The ease of use for the vacationer and homeowner to book vacations makes this a simplistic process on the surface, but not when problems arise. Which with this, has begun part of the controversy.

Residential restrictions in zoning require tenants/guests to stay 31 days or longer in a residential neighborhood not zoned for “hotel or vacation rental” accommodations. As the map here shows, there are actually areas in Santa Barbara that are “legal” to operate vacation rentals however, there are still questions regarding these boundaries and who legally has applied and can operate there. The real predicament has come with the fact that the City has been allowing owners to obtain business licenses and collect and pay bed taxes on something that is technically illegal in terms of zoning laws and local housing ordinances.

When complaints from neighbors living near some of these vacation rentals in Santa Barbara started to come in, the City of Santa Barbara had to address the issue. They have followed the lead of other jurisdictions like Santa Monica and areas around Portland where this has become a very heated topic. The real problem is that there is a lack of management of these vacation rentals and therefore, problems with out of town guests are sure to erupt when a property is not managed by a proactive local company. None-the-less, the city has spoken and they will be reconvening August 6, 2015 to discuss some other emerging ideas and fine tuning what could take up to 12 months to become a new ordinance with enforcement in place and guidelines for all to follow. In the meantime, they are not issuing any new business licenses for “vacation rentals” in Santa Barbara and essentially put all companies and owners on constructive notice that future enforcement is coming if they operate “vacation rentals” in non-designated zones.

During my conversation with the head of the department, Liz Limon, who I might add was incredibly helpful and informative, there was some new information that may shed some light on the option of “home sharing” in Santa Barbara.

Is it a Vacation Rental or Home Sharing?

A “vacation rental” is a home that the owner does not occupy and rents out for hotel and other short term accommodations. By comparison, “home sharing” is where an owner lives in a home and rents it out periodically while either staying on the premises or moving into another property during the “home sharing” period, although some cities have different thoughts on whether the owner needs to actually be present. This is the foundation of what VRBO, Flipkey and Airbnb was built on and so technically not “vacation rentals” although many companies that do vacation rentals in Santa Barbara actually list on VRBO and Flipkey even though it’s not in the “home sharing” business.

Here are some links to educate yourself on what the “home sharing” rules in terms of tax ramifications and city ordinanaces are saying around the state:
http://www.cbsnews.com/news/home-sharing-and-reporting-rental-income/
http://www.npr.org/sections/thetwo-way/2015/05/13/406587575/santa-monica-cracks-down-on-airbnb-bans-vacation-rentals-under-a-month
http://www.latimes.com/business/la-fi-airbnb-rift-20150404-story.html

The City of Santa Barbara seems very open to listening to how “home sharing” could be implemented in Santa Barbara and regulated. Since many of the arguments at the City Council Meeting came about because many people feel that “vacation rentals” are impacting the available long term rental properties, I believe all sides can agree that “home sharing” does not factor into this problem. Owners of these properties actually live on the premises and would not be offering it on long term basis and therefore, the local long term rental market is not affected by this. I do agree that systems need to be in place to manage and regulate any new “home sharing” ordinance which would start with a local management company supervising such properties.

Rely on me and allow me to be your fearless resource as together we navigate this new unknown and the possible options in both renting long term and in a home sharing capacity. Knowledge is power and I believe change can bring about some wonderful new options for everyone! Most importantly, having a management company that specializes in this field is very important.

Being a Realtor, Real Estate Broker and Property Manager here in Santa Barbara, I am very in tune with all of the many moving parts at play here in our local real estate market.

Tiffany

For more information about upcoming city meetings regarding this visit:
http://www.santabarbaraca.gov/services/planning/mpe/vacation_rentals.asp
http://www.santabarbaraca.gov/civicax/filebank/blobdload.aspx?BlobID=159090
062315-rentals-630 (1)

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Phone:    805-698-6694
Email:     tiffany.haller@compass.com
1283 Coast Village Circle Santa Barbara, CA 93108

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