Santa Barbara City Council Debates Adaptive Reuse Ordinance, Calls for Revisions

The Santa Barbara City Council took a step forward in addressing housing shortages during its meeting Tuesday, debating an adaptive reuse ordinance that aims to incentivize housing projects in existing commercial spaces.

While the ordinance could pave the way for converting vacant retail and office buildings into much-needed housing, disagreements over inclusionary housing requirements and other provisions led the council to send the ordinance back to staff for revisions.

The proposed amendment to municipal codes seeks to streamline adaptive reuse projects by waiving certain zoning requirements, such as setbacks, parking, and maximum density.

It would also set a 10% inclusionary workforce housing requirement, meaning developers must ensure 10% of units are priced for local workers or pay in-lieu fees to the city’s housing trust fund. However, the inclusionary requirement drew sharp criticism from developers and some stakeholders, who argued it adds financial burdens that could deter projects.

Facing these concerns, the council voted 5-2 to require revisions, carving out the Commercial Business District (CBD) along the State Street corridor from the broader ordinance. Councilmembers Wendy Santamaria and Kristen Sneddon voted against the motion, citing concerns over weakening inclusionary housing requirements. 

Staff is also studying the feasibility of in-lieu fees and recommended further consideration of a 1,200-square-foot average unit size maximum, a contentious point for developers who believe such caps hinder flexibility. 

Public speakers were divided on the issue. Some criticized the ordinance for lacking provisions for larger, family-sized units, while others supported it as a means to boost workforce housing and revitalize downtown Santa Barbara.

“We believe that the lack of available, affordable housing near jobs is adversely affecting our region’s economy, environment, and civic life, all of which will worsen if we do not address this crucial problem,” the Coastal Housing Coalition stated in a public comment. “CHC broadly supports the City’s efforts to promote adaptive reuse projects and strongly desires that the Council adopt an Adaptive Reuse Ordinance that generates immediate interests and a significant number of residential units.”

In contrast, a resident express disapproval of the plan and urged the council to make sure the policy aligns with feasibility and not political goals that have zero future outcomes.

“Hopefully one of the data points to this effort has been the economic analysis conducted for the Paseo highlights the real difficulty developers face in making multi-family projects economically feasible in SB. Adaptive Reuse projects are going to face similar economics,” wrote Peter Lewis as a public comment.

The ordinance’s adoption is seen as a critical step in transforming empty downtown spaces into housing, particularly near the State Street corridor.

Revisions to the ordinance will likely incorporate feedback from the study on in-lieu fees and new proposals from city staff. The council is expected to revisit the issue once these changes are complete.

For now, the debate highlights Santa Barbara’s ongoing effort to balance the housing crisis, developer incentives, and affordability concerns.