Appropriate Zone and Zoned Appropriately
Where am I going, where have I been?
12 weeks and counting…yes I am counting. The day we sought to become legally permitted as a vacation rental in the City of Santa Barbara for a property zoned R-4 and legally allowed to vacation rent began Monday, August 17, 2015. Yesterday marks 12 long and excruciating weeks.
I admit, this is an extremely heated topic across our country and in many tourist destinations like Santa Barbara. So that no one is confused here, I am not speaking about homes in residential neighborhoods that are not legal to vacation rent. Although I have an opinion on those as well that will be shared, I am first and foremost speaking about properties with the legal zoning designation that are allowed to vacation rent and are located in the hotel corridors of Santa Barbara.
- These legal zoning designations include: R-4, C-1, C-2, C-L, C-M, C-P, HRC, M-1, OC
- Zoning designations where Vacation Rentals or Home Sharing are NOT allowed: R-1, R-2, R-3, A-1, A-2, E-1, E-2 and E-3
I digress for a moment…
We live in a “sharing economy”. We share cars, we share products, we share rides and yes, we share our homes.
The 21st century is here and we need to understand that in order to succeed in this world, we need to embrace it and shift our thinking progressively. The ship has left the harbor and will not be coming back, ever.
There are systems in place in other communities that are working in all the various zoning designations so let’s not give up on what could be a positive for our city and community.
R-4 – Legally zoned for vacation rentals in Santa Barbara
For people seeking to follow the rules and do what the city is asking since they are “appropriately zoned and zoned appropriately”, they have literally dusted off the book on the highest shelf titled “Vacation Rentals” and have decided that this is the “law”, no ifs, ands or buts. The city is learning this process along with all of us….
The book, the ordinance and the codes it references are of an era that knew nothing about what would happen in the future with “sharing”. Even back then, they agreed that R-4 and many other zoning designations were “legal to vacation rent”. The problem is that the system they put in place for obtaining that “Vacation Rental Permit” only 1 person in the last 30 years obtained and I was told by the city, they made this owner go through the process. This owner did not have to go through the Hotel Condo Conversion which he/she should be thankful for.
To recap for legal zones:
- There is ONLY 1 legally permitted vacation rental in the City of Santa Barbara.
- Important: If you seek to convert more than one unit on the property (like a duplex), the city requires you to convert your whole property to a hotel or condominium through a process called “Hotel and Condo Conversion”.
- There is NO property that has ever been converted to a Hotel or Condo or even started this process ever.
Here is the link to this packet: http://www.santabarbaraca.gov/civicax/filebank/blobdload.aspx?BlobID=17590
What does this tell us?
- Cost: $20,000-$30,000 quoted to me by city
- Time: 1-2 years quoted to me by city
- Is this constitutional? Is this legal?
As I mentioned, there have been NO properties that have EVER applied or gone through the Hotel/Condo Conversion process in that dusty book on the top shelf they just brought down when they dropped the bomb on property owners of vacation rentals in the illegal & legal zones. If you have ever remodeled your home, consider this…you are asked to follow a rule and requirements book similar to that yet absolutely NO exterior or interior changes are happening, only what they deem as a “change of use”.
We have hired a planner for our case. We have consulted with numerous attorneys. We have dug deep in these requirements, ordinances and codes and here is where we are:
- Legally, they cannot do this.
- There is a time limit they have to uphold in the permitting process.
- The terms “inverse condemnation” and “unconstitutional” keep coming up.
And why are they saying 1-2 years? Because they too have to learn this process right along with us, adding fees, adding requirements, putting up roadblocks and establishing even more new permits as they go. I know this because it’s what I have endured the last 12 weeks of red tape.
I have included the link to this discussion when Commissioner Pujo on the Santa Barbara Planning Commission asked city personnel in their most recent meeting about a comment I made regarding the difficulty of those seeking to become legal in R-4 zone. The Planning Commission doesn’t even know what is being required by their department. The City of Santa Barbara has admitted they have never done this before. Bottom line, they have come down hard on vacation rentals and home sharing yet have no system in place or staff to “help” those legally zoned. However, they just allocated $180,000 to begin enforcement cases against anyone in ANY zone.
Here is a link to that video of a recent Planning Commission meeting regarding whether they should consider a home sharing ordinance in the City of Santa Barbara.
If you don’t have time to watch the entire video, here are some crucial parts..
- You can watch what I mentioned at 56:40 in the tape (don’t judge, I was super nervous!)
- You can then listen to the City Planning Commissioner Pujo actually question this at 1:49:10 and hear their response which admitted what I suspected
Also, you need to be aware that the City of Santa Barbara also has NO plan in place for when go through this onerous process to convert your property as they require to get the Vacation Rental Permit and then a year later decide to convert it back to residential. So then what? I dare not think of what could potentially happen there.
As a Real Estate Broker, I have to think of the impact and ramifications on property value if you do go through this “Hotel Condo Conversion” in the City of Santa Barbara. By converting it to a condominium, there’s a high probability rates for a buyer’s loan will be different. By converting it to a hotel, since I’m not knowledgeable on the topic, I can only imagine the same will be the case and most likely a much harder approval process. And what about that value? Selling a condominium complex or each condo individually will have it’s own potential set of negatives. Selling as a hotel well, the jury is out on that one.
So bottom line, will this conversion that the city is requiring in order to get a vacation rental permit negatively impact the property value? I would have to say that it’s a gamble and not something I would advise anyone to do without knowing all the potential risks. And this is why we now have an attorney involved.
Why am I disappointed?
Well, because I have a property “legally zoned” yet can’t do a darn thing without following these absolutely outrageous, unreasonable, costly and now we are finding possibly “unconstitutional” requirements. At the same time, people in R-1, R-2, and R-3 were granted an amnesty period until the end of 2016 and all they had to do was fill out 1 page to get a business license if done before June of this year. Now how is this legal? How can you have leniency for those that are in “illegal” zones in the City of Santa Barbara yet someone in a “legal zone” and “legally zoned” is forced to endure the system in place for over 30 years that only one property owner went through and NO ONE has gone through with more than one unit in regards to a Hotel and Condo Conversion? The city isn’t backing down but neither am I.
Why am I even more disappointed now?
I received a phone call and met with a homeowner of a property zoned R-4 “legal” and located in the hotel corridor. He decided to vacation rent about a month ago and had not followed the news that the city stopped issuing business licenses in June, but wait, wasn’t that just for “illegally zoned” what about the “legally zoned”?. He is an out of town owner that wanted the ability to use the property on occasion when he is in town. He too, wanted to follow the rules, but couldn’t because of all these old/new regulations, fees , requirements coming into play. He went to the city and realized he couldn’t even attempt the process….$20,000-$30,000 and 1-2 years? He read my past blogs and became even more educated by learning through my journey.
Fast forward 3 weeks…this homeowner received a complaint from a crazy former long term tenant feeding the city a bunch of non-sense. Now, the city attorney and other city officials have decided to make him their new “guinea pig” and come down hard on him to the tune of issuing cease and desist orders and trying to get a legal “settlement agreement” signed by him. He has changed his rental to be 30 days or more yet he is in the legal zone to rent for less than 30 days. The city loves this because it’s more ammunition for their fight saying it’s taking away affordable housing.
How so? He wants to use this property himself. How could he do that if it was rented long term? He has property rights and now he has to spend money and hire an attorney to fight for those rights?
In a nutshell, this is the city we live in and we need to understand they are trying to take away our property rights whenever they see the opportunity. We saw this with the ever controversial Zoning Enforcement debacle between homeowners and the City of Santa Barbara over the past 5 years. So many owners lost hundreds of thousands of dollars having to defend themselves and/or correct issues the city failed to call out in past zoning reports, etc. Our Santa Barbara Association of Realtors worked hard in fighting the city on behalf of all property owners and we helped educated and bring about change within the city zoning department.
It takes a village as we know but if we don’t get involved, voice our opinions to city leaders for the City of Santa Barbara and be proactive, this process is only going to get worse. Other cities have done just that…check out this link about numerous ones that the citizens have won.
Look at what the city of Aspen did to modify their ordinance to be more in line with our changing times:
And if you care to know about the whole Home Sharing proposal in the City of Santa Barbara read below. All I can say is don’t hold your breath it will go through. It needs more citizens pressuring local government at the VERY least….
To rewind a bit, Santa Barbara does not currently allow home sharing in R-1, R-2, R-3 zones and other various residential zones. This is the case for many cities across the country. I have attended all the meetings and it is clear that “home sharing in Santa Barbara” most likely will be another proposal shot down as every indication at these meeting both for the city of Santa Barbara and now the County of Santa Barbara shows strong opposition from the head decision makers. They are simply going through the “public process” motions so don’t think for a minute these meetings alone will change their minds. I would relate that many owners of R-4 fall into the category of “home sharing” as it relates to using the property periodically for their own use. The definition is unclear but many second home owners in the City of Santa Barbara are technically “sharing their homes”. I think in these cases a strict system could be put in place to regulate this idea and would be a benefit to our community and city at large.
If you have followed my blog, you know what has transpired over the course of the past 4-5 months. If you follow the news you may have heard that AirBnB successfully defeated a measure in San Francisco to essentially stop this “sharing” climate we live in.
“Tonight, in a decisive victory for the middle class, voters stood up for working families’ right to share their homes and opposed an extreme, hotel industry-backed measure. This victory was made possible by the 138,000 members of the Airbnb community who had conversations with over 105,000 voters and knocked on 285,000 doors. The effort showed that home sharing is both a community and a movement.”
So what does this tell us? If your thinking and opinions are of a progressive variety, I encourage you to get involved. Changes are happening and we need to tell our local leaders what our city needs and remind them of our property rights.
- When will it end you ask?
- When we all stop being complacent and start being proactive?
- What will be next on their list and will your property be affected?
If you wish to get involved, are affected by this enforcement and/or would like to have help navigating this vacation rental permitting process in legal zones, please contact me.
I am here to help and happy to share what I have learned thus far. I welcome your call!
Real Estate Broker / Property Manager