With a surge during pandemic, the popularity of short-term rentals (STRs) as additional income to property owners has skyrocketed in Santa Barbara. To address this, the City of Santa Barbara implemented a robust enforcement program to ensure compliance with local regulations.
The STR Enforcement Pilot Program: The Next Chapter for Santa Barbara Vacation Rentals
In August 2023, the City of Santa Barbara launched the Short-Term Rental (STR) Enforcement Pilot Program, signaling a commitment to addressing the challenges posed by the proliferation of illegal vacation rentals in all areas of the city. The initiative, spearheaded by the city attorney’s office, has already seen over 90 cases opened against illicit rentals in both the coastal and inland zones.
Navigating the Coastal Zone STR Regulations: A Delicate Balance
One unique aspect of Santa Barbara’s STR landscape is the distinction between coastal and inland zones. While the inland zone follows zoning and use regulations in Chapter 30 of the municipal code, the coastal zone still operates under Chapter 28 of the Santa Barbara municipal code. For the average person, it is confusing at best.
The coastal zone allows owners to obtain the business license to remit taxes, provided operators adhere to existing ordinances. However, a critical update to the zoning laws is pending to align these regulations with the California Coastal Commission’s guidelines, potentially allowing for vacation rentals instead of an outright ban in the City of Santa Barbara and specifically in the coastal zone.
Constant Vigilance: 24/7 Monitoring of Illegal Vacation Rentals
The City of Santa Barbara is leaving no stone unturned in its quest to curb illegal vacation rentals. A sophisticated online monitoring system, operated by an external software company, scans rental listings around the clock. This vigilant oversight ensures that any unlicensed operations are promptly being identified and illegal operators are shut down. So if you are an operator listing your home after 5pm during the week and on the weekends, the city will still be able to obtain your address through this outside company that monitors these actions around the clock.
The Business License: You must get a business license and be remitting taxes
For operators of vacation rentals in any zone of Santa Barbara, securing a business license is not just a formality, it’s required. Remitting the required 14% in City of Santa Barbara TOT and TBID taxes each month is not only a financial obligation but a crucial step in demonstrating compliance with local regulations. The City of Santa Barbara is resolute in its goal of criminal prosecution for those who bypass the rules, making it imperative for operators to tread carefully and obtain the necessary business license. As well, the City of Santa Barbara requires 3 years of back taxes if caught without the business license which for many operators could amount to tens of thousands of dollars due to the city.
While we agree, it’s not a straightforward process and the rules, laws and ordinances are not clear to most, we hope the City of Santa Barbara can be better with the communication piece of who can obtain the business license in Santa Barbara and why inland properties may not be able to get a license even if zoned as a similar use to a hotel.
As Santa Barbara seeks to strike a balance between tourism and local regulations, the STR Enforcement Pilot Program stands as a testament to the city’s commitment to maintaining the integrity of its neighborhoods. Vacation rental operators and property managers of vacation rentals, whether in the coastal or inland zone, must be diligent in obtaining business licenses and fulfilling their tax obligations. With 24/7 monitoring in place, the City of Santa Barbara is sending a clear message… compliance is not optional.
As visitors continue to flock to our special coastal gem, responsible vacation rental managers that follow the laws are key to preserving the charm and character that make Santa Barbara a truly special destination.
Have more questions? Reach out to us anytime!