In an effort to protect long-term housing, Santa Barbara is moving closer to limiting or even prohibiting some short-term rentals. But, city leaders delayed a final recommendation this week after hours of public comment revealed sharp divisions over how the policy could reshape housing and tourism.
At an ordinance committee meeting Tuesday, officials considered a proposal that would significantly limit vacation rentals, particularly in coastal neighborhoods like the Mesa.
The proposed ordinance would largely prohibit whole-home short-term rentals in much of the coastal zone, while allowing more long-term “home-share” rentals where property owners remain on-site. It also regulates short-term rentals by requiring permits, inspections and proof of insurance.
The proposal also includes tenant protections, banning landlords from converting units into short-term rentals if tenants were displaced or if the unit has been occupied within the last two years.
City officials say the goal is to prioritize long-term housing in a market where availability remains tight and prices remain high.
Why the city is considering changes
Supporters of the ordinance argue short-term rentals have reduced housing supply and altered the character of residential neighborhoods.
“Every short-term rental diminishes the residential neighborhood,” said Mesa resident Ellen Stoddard during public comment. “Short-term rentals take away long-term housing from people who need it.”
Other residents said the rise in vacation rentals has led to increased noise, parking issues and a loss of community stability.
Ken Grand, a lifelong Mesa resident, said the change is noticeable on her street.
“We need more long-term rentals,” he said. “We love it when a young family moves in.”
Concerns from opponents
Opponents, including property owners, business groups and tourism industry workers, warned the ordinance could have significant economic consequences. They argue the proposal would effectively eliminate most short-term rentals, leading to a drop in tourism spending and city tax revenue.
Dustin Hoiseth, with the Santa Barbara South Coast Chamber of Commerce, said the city has not fully analyzed those impacts.
“We have not seen enough data to showcase that the impact will be significant enough to outweigh these previously stated negative impacts,” he said, adding the change could result in “tens of millions” of dollars in lost visitor spending.
Other speakers raised concerns about job losses for local workers, including housekeepers and property managers, and questioned whether limiting rentals would meaningfully increase long-term housing supply.
Some property owners also said the shift to home-sharing is unrealistic, arguing most travelers prefer private accommodations.
What happens next
The ordinance committee did not take action on the proposal Tuesday, and instead voted to continue the discussion to its next meeting. City staff are expected to return with additional information and revisions, while public comment will continue.
If advanced, the proposal would then go before the full Santa Barbara City Council for consideration.
For now, the future of short-term rentals in Santa Barbara remains undecided.
