Is there a restriction that will prevent new housing in the local area, per the State Housing Mandate, to not be used for short term rentals?
Does State Housing Mandate Prevent Vacation Rentals?
Edhat Reader
January 10, 2024, 2:32 pm
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Our state Senator (Monique Limon) put together a bill to impose a 15% tax on short-term rentals starting in 2025. It could generate an estimated $150 million annually to build or rehabilitate low- and middle-income housing. I believe the bill is being amended at the moment so I don’t think it’s been approved yet.
Santa Barbara is considering raising our TOT from 125 to 15%. Localities like SB will have both a state and local TOT applied. That’s some sticker shock checking out. What’s that going to do to tourism is CA? $30 added to every $100 spent on a hotel room.
There is already $30 being added to every $100 spent on a hotel room with all of the extra “resort” fees that hotels tack on. If someone is happy to stay at a $600-night hotel for a week, an extra $90 isn’t going to make much of a difference, trust me.
Whether there’s a law against it or not, people can still do it under the radar. It comes down to local enforcement.
Good question! Coincidentally, I read SB Housing Element yesterday. I recall no section on vacation rentals as relates to addition of new housing units. I assume if not explicitly prohibited, they’re allowed in the identified zones. I found several oversights/ flaws in SB Housing Element which was referenced as relates to Hispanic displacement by Sneddon at Tuesday’s City Council meeting on additional tenant protections.
Currently the state short term rental law allows up to 90 days. Therefore it would also apply to accessory dwelling units. A new law allows ADU’s to be rented out or sold.
I have read all the comments so far. Allow me to clarify your questions.
First the statement about “State Mandate”. Almost everyone including news reports use that term incorrectly. What that means in reality is that the State only looks to enforce each jurisdiction to do the work of identifying housing needs. As enforcement they basically say- produce a viable housing element or loose your permitting authority.
The process is laid out in good detail by Gov code 65584. Each local council of government (SBCAG) sets out to create a population forecast, and housing needs to meet that population increase. (gov Code 65584.d) They create the mythology on how the data is presented. This information is then cross-referenced with the Dept of Finance projections, and then is sent to the State for approval. Basically, the state grades the work.
All the state does in this process is makes sure each jurisdiction does this activity every 8 years…..That is the mandate. Assuring that housing plans are turned in. If local government don’t turn in housing elements, they lose authority to permit. (The housing plans are just proposals for use of land, providing the options) When local government say, the state is requiring us to do this- they are ‘spinning’ the facts- the State is requiring them to turn in the plans complete. That is all.
So when the question is asked – are there restrictions based on the mandate- it doesn’t apply. Short term rentals have nothing to do with each local government tuning in its PLAN for housing on TIME. It’s apples to oranges question. They do not apply.
A better way to ask the question would be – Do short term rentals impact the housing element need requirements?
Short answer is -YES –
Short-term rentals “reduces the affordable housing supply by distorting the housing market in two interconnected mechanisms. The first such mechanism is one of simple conversion: any housing unit that was previously occupied by a city resident, but is now listed on Airbnb year round, is a unit that has been removed from the rental market and has essentially been added to [the community’s] supply of hotel rooms.
This leads to a real, but likely mild, increase in rents, an effect that is concentrated in affluent or gentrifying neighborhoods along the [community’s] central core. More disconcertingly, conversion reduces [the community’s] already-limited supply of affordable housing.
The second mechanism is “hotelization.” So long as a property owner or leaseholder can rent out a room on Airbnb for cheaper than the price of a hotel room, while earning a substantial premium over the residential market or rent-controlled rent, there is an overpowering incentive to list each unit in a building on Airbnb rather than rent to [local] residents, thereby creating “cottage hotels.” This decreases the supply of housing and spurs displacement, gentrification, and segregation.
Every 8 years local jurisdictions set out a housing need for the population. (this has been done since 1969 and we have had 6 sessions so far) For easy math lets say its 1,000 new units are needed for the next session. If 500 of those are taken off the Housing market and made into short term rentals this means that during the next session review the amount of the housing need met was only 500, leaving 500 units still needed to be acquired. When a new session review is done and the new projected housing need is calculated it will not only include what was taken out but the new calculation of numbers. So 500 in the rears and another 1,000 for the new session thus creating a 1,500 housing need.
Most local governments keep this in mind in proper planning and locally will create ordinances to keep that from getting too far away from them. This is self-governing and has nothing to do with the state. For each short term rental will need to be permitted and that is how local government keeps it from getting out of control.
Hope this answers your question.
You are incorrect. The Housing Element Update process used to be self governing. The Regional Housing Needs Assessment or allocation (RHNA) is a number the state assigns each jurisdiction. This part of the update has always been a planning tool. This is no longer the case. Because of new state housing laws (over 150 of them ) In 2021 the RHNA numbers for each jurisdiction increased to an unattainable amount using a methodology which doesn’t make sense.
Housing advocates who wrote the legislation have admitted the numbers were overblown to force cities & counties into non compliance. When a city is non compliant under new laws developers get outrageous concessions. That is why we are seeing the terrible types of projects coming on line.
Also HCD now has the power to sue non compliant jurisdictions and intervene in third party lawsuits against individual jurisdictions. Annual progress reports must now be filed with the state. Santa Barbara County was assigned 24000 units of housing for the eight year period which began in 2023. Due to state laws local governments have been stripped of their own. control. So yes the housing is mandated and enforced by new state laws whereas prior to 2018 it was a suggestion.