Op-Ed: Say No to City Increase of Hotel Tax

By Joan Albion

This week I received a text message to take a survey about pressing issues concerning the City of Santa Barbara. The message did not identify who was behind the survey, which is always annoying.

The survey was centered on a potential measure to increase the city’s transient occupancy tax (hotel tax) from the current 12% up to a total of 15%.

Allegedly the funds from this increase will go directly to fund affordable housing, although the survey did not provide many details on this. This was estimated to raise $4 million the first year and $7.6 million annually thereafter. It will continue unless repealed by voters, which let’s face it, won’t happen. Once it’s in, it’s going to stay in, taxes rarely ever come down.

The city’s website states, “The Transient Occupancy Tax (TOT) is a Tax imposed on “Transient” guests for the privilege of staying in any hotel, inn, motel, or other commercial lodging establishment for lodging or sleeping purposes for a period of less than 30 days. These taxes are collected by the hotel/motel operator for the City and are forwarded to the City on a monthly basis.”

Of the current 12% TOT tax, 10% goes to the City’s General Fund and the remaining 2% goes to the Creeks/Clean Water Fund.

So this added 3% will go somewhere else completely to fund affordable housing or back into the general fund? The survey asked if I’d vote for it and provided info on who supported the measure and who didn’t, but how can I know to support it with such little information.

The survey mentioned some city council members, the Housing Authority, and a few nonprofits support the measure while the Visitors Association and Downtown Organization oppose it.

I am a proud liberal and even I understand the answer isn’t always to raise taxes to solve problems, especially when there is concern about the current management of existing city funds. Perhaps the millions of dollars spent on consultants to “reimagine State Street” leaving us still without a clear goal should have gone to affordable housing instead.

What happened to cracking down on short term rentals and the funds spent to help bring in more money for the city and offer more housing?

A report from CalMatters shows a tax on short-term rentals like Airbnb could fund California affordable housing.

Our own State Senator, Monique Limón, authored Senate Bill 584 earlier this year that would impose a 15% tax statewide on short-term rentals in an addition to local transient occupancy taxes. It could generate an estimated $150 million annually to build or rehabilitate low- and middle-income housing. The bill has yet to be voted on by the State Assembly.

While I don’t think more taxes are the answer, perhaps this could persuade some owners to choose long-term renting instead of short-term to provide more housing on the market.

Op-Ed’s are written by community members, not representatives of edhat. The views and opinions expressed in Op-Ed articles are those of the authors and do not necessarily reflect those of edhat

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    • What happens if cities have to disclose sales tax and all additional fees at the time a person makes reservations? Whooa, Santa Barbara has 15% TOT! Stay here for a week and that’s $15 per $100 spent on a hotel. Stay a week, $105 per $100. So what if the state passes theirs? That’s a whopping $30 per $100. Let’s not forget that the prices of a room keep going up. Is Santa Barbara that special anymore for out of towners to come?

  1. This will essentially raise prices of hotel rooms and likely push people to choose illegal short term rentals instead. Sounds like the proponents of this are trying to place it in a nice package of “supporting affordable housing” but either way it is still raising taxes.

    I, too, am curious who sent this survey out. I didn’t receive it but my relative did.

  2. Yet another reason for conventions to select a different venue outside of Santa Barbara.
    Hotels are already way below capacity — this will just add to the downward trend.
    The City should spend their effort on attracting conventions and visitors — not raising taxes.

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