The Santa Barbara Planning Commission discussed a draft short-term rental (STR) ordinance on December 18, 2025, to address residents’ concerns about vacation rentals across the city.
The proposed ordinance’s main aim is to preserve long-term housing for residents and the local workforce and regulate vacation rentals, or rentals of less than 30 days. The ordinance will also establish a process for applicants and address noise and parking complaints in residential neighborhoods.
The popularity of STRs across Santa Barbara has skyrocketed since the Covid-19 pandemic, making formal regulation more urgent. Commissioners reviewed an initial draft, described as a “beginning stab,” and a progress report.
Residents have been complaining about the disruption of neighborhood tranquility and the frequency of noise-related nuisances in residential neighborhoods.
Several residents expressed frustration over being awakened by guests at early hours of the morning and loud music played outdoors at all hours.
Many residents who work from home said the outdoor noise makes it “impossible to work,” with one resident complaining that some guests hold “frat parties” at the rentals.
Proposed Regulations
The ordinance seeks to improve lower-cost overnight accommodation choices by introducing home shares.
The draft ordinance identifies two types of rentals: STR (renting an entire unhosted house for less than 30 days) and home shares (renting a portion of home while the homeowner is physically present in the house, specifically between 11 p.m. and 7 a.m.).
Instead of considering STRs as a commercial “conversion,” the draft ordinance proposes to regulate them as a residential use and streamlines site planning standards.
- Coastal zone: Due to the Coastal Commission’s mandate encouraging visitor-serving accommodations, the City of Santa Barbara proposed a “license area,” where STRs would be permitted with a Conditional Use Permit (CUP).
- Home shares: Home shares will be allowed in nearly any zone where residential uses are permitted.
Impact on Transient Occupancy Tax
Business owners claimed that the ordinance would affect Transient Occupancy Tax (TOT), which is generated by STR bookings.
The proposed ordinance could wipe out almost $4 million in TOT from the city’s budget, a vacation rental business owner claimed. This loss would be particularly significant for the city’s general fund, which is already facing a $7 million deficit, the owner added.
Business owners also raised concerns about the prohibition of STRs in residential areas as it would impact the local economy, particularly the F&B, retail, and recreation sectors.
Short-term stays are a unique niche that cannot be fulfilled by traditional hotels, argued business owners. If STR owners were forced to stop renting short-term, they would likely leave the homes vacant for personal use instead of converting them to long-term housing. This would lead to a loss of tourism-related revenue and taxes from these properties.
Planning Commission’s Feedback
Most commissioners said mandating a full CUP for every STR would burden staff, and instead suggested exploring a quasi-ministerial licensing path that will appeal to the public.
Many commissioners expressed concern with permitting home shares across the city. Three commissioners suggested home shares be allowed in zones where STR is permitted to prevent them from becoming an enforcement loophole in residential areas.
The Commission agreed on a six-month grace period for existing unpermitted rentals to obtain a license or cease operations. Some of the commissioners, however, noted a need for a public education campaign due to the widespread confusion.
Observing the importance of booking platforms, such as Airbnb and Vrbo, the Planning Commission highlighted the importance of holding these platforms responsible for listing unpermitted or illegal home listings.
The City of Santa Barbara plans to return to the Planning Commission with the full ordinance on February 19, 2026. The ordinance will then be presented to the City Council for adoption in spring and summer of 2026.
Also Read
- New Warehouse and R&D Building Proposed Near Funk Zone Moves Forward
- Santa Barbara Eyes New Tax on Property Sales Over $3 Million
- California Homeowners Staying in Their Houses Longer Than Most in US, Study Finds
- Regional Energy Program Could Bring $7 Million to Santa Barbara County
- Despite Public Pushback Spring Fest in Isla Vista Gets Green Light
LOL, business owners saying that if they were not allowed to rent them out, they would just “leave them empty for personal use.” I’d gather that a good percentage of the STRs that were bought in the last few years – the owners cannot afford to do that. They would either rent them out or sell them.
Right? They can’t claim that renting str’s is essential to their income and then say they’ll just sit on them if the rules get tighter.
That’s sorta like, no almost exactly like holding housing -which we as a community are in dire need of- as hostage.
For anyone interested in viewing their discussion, it starts around 3hr, 55min in the video. However, this was just a “progress report” and no action was requested.
How the city has been captured by those with property, especially those with excess property. STRs are absolutely a significant cause of the “housing shortage” in our city and county. The city insists on building more “affordable” units for middle and lower income people which these affordable units are off market and go to higher bidders. This in exchange, apparently, for tax revenue. This is not stewardship of the city for its residents but protection of the affluent and privileged. That protection makes the quality of life much worse for the ordinary resident.
ERRATA: should say “while these” not “which these” referring to affordable units.