Court decision ends ban on short-term vacation rentals in coastal zones

SANTA BARBARA, Calif.-The popularity of vacation rentals and the limited supply of permanent housing in Santa Barbara has led to numerous legals challenges.

On May 4, Theo Kracke, the CEO of Paradise Retreats said he won his legal battle with the city for the second time.

"The court confirmed we were right all along, and that now families can continue to enjoy the benefits of short-term rentals which are lower cost visitor accommodations," said Kracke.

The city of Santa Barbara had more than 100 short-term vacation rentals in its coastal zone in 2015. The number dropped to single digits after city leaders voted unanimously to ban vacation rentals in residential zones and to treat them like hotels in coastal zones, limiting the number of permitted rentals allowed.

Critics said the city was violating the California Coastal Act.

Kracke said he initially just wanted a compromise before they ended up in court.

He said the California Coastal Commission was not part of Santa Barbara's regulation plan and the commission sided with him when Santa Barbara appealed his trial victory to the 2nd District Court of Appeal, located in Ventura.

Kracke's attorney Travis C. Logue of Rogers, Sheffield & Campbell said, "We are extremely pleased with today's decision by the 2nd District Court of Appeal. We have been in litigation now for nearly 5 years and the city of Santa Barbara has tried to bury our client in legal fees."

The case allows Kracke to recover his costs for challenging Santa Barbara's changing enforcement policy.

"It is a victory for all Californians who use vacation rentals along the coast, it is certified for publication, which means it has binding legal authority and precedent in California and may be cited by other lawyers. All we need now is for the city of Santa Barbara to finally follow the rules and allow vacation rentals in its coastal zone."

Logue said the decision is being watched statewide.

"This decision sets statewide precedence that cities and counties may not outright ban STVRs in the coastal zone like Santa Barbara relentlessly tried. They are, however, allowed to meet and confer with the Coastal Commission to enact reasonable regulations, " said Logue.

The city could petition the California Supreme Court to hear the case or vote on new enforcement measures pertaining to short-term rentals in Santa Barbara's coastal zones.

Santa Barbara City attorney Ariel Colonne was busy with a virtual city council meeting on Tuesday and could not be reached for comment.