When Santa Barbara Realtor JJ Lambert purchased his three-acre ranch property in his hometown of Santa Ynez, he had a plan in mind.
List it on Airbnb, and scores of websites just like it, and turn a profit on the property as a vacation rental. He spent months and more than $100,000 fixing up the neglected residence, which came with a malnourished horse that died of starvation and a cannabis grow operation obscured beneath a canopy in the backyard.
“It was the dog on the street,” Lambert said. “Now, everything looks beautiful, we don’t have nuisance issues and … all week it’s vacant and silent. Neighbors are ecstatic.”
Lambert’s property, which he advertises as River Ranch Road, is one of about 50 Santa Ynez Valley rentals listed on Airbnb, a popular home-sharing website that has the potential to turn anybody with a spare bedroom, guest house, or even a trailer, into a hotelier.
A search for rentals in the Santa Ynez Valley turns up pages of spacious ranch properties with names like Bella Vista, guest houses-turned bed and breakfast boasting of personalized service, and even apartments listed for as little as $150 a night.
But local jurisdictions are taking action against the sharing platform. In the tourism-saturated Santa Ynez Valley, both Buellton and Solvang have imposed strict regulations against hosts like Lambert.
Buellton issued cease-and-desist letters this month to six Airbnb operators after receiving a nuisance complaint from a neighbor, City Manager Marc Bierdzinski said.
The city’s Municipal Code bars homeowners in single-family residentially zoned areas from using their properties as vacation rentals. Fines range from $100 per day to as high as $500 for repeat offenders.
Solvang implemented harsher penalties for operators last year, leveling $1,000 fines on first-time offenders, with repeat hosts receiving $5,000 citations.
The heavy fine was a way to deter hosts from operating — some considered a $100 citation “the cost of doing business,” said Solvang Councilman Edwin Skytt.
Hard to enforce
Despite the risk of four-figure fines, the city ordinance is often an empty threat.
Solvang code enforcement officers have cited just one violator in the last three years, before stiff penalties were approved, City Manager Brad Vidro said.
“It’s kind of tough to prove that the person rented it, and vacation rental people are getting pretty smart. They tell their customer to say they’re friends of the owners,” Vidro said.
Solvang city officials were alerted to the growing number of Airbnb units when a host tried to pay Transient Occupancy Tax, a 12 percent bed tax hotel guests are assessed in Solvang for each night stayed.
After wrestling with the issue of vacation rentals during a series of workshops and council meetings last year, Solvang City Council members issued an emergency ordinance allowing nine parcels on Copenhagen Street in the Village Center to continue operating for a one-year trial period, but banned all others.
The bigger picture
In other cities, enforcement is becoming more aggressive with the backing of powerful unions and nonprofit housing advocates.
In San Francisco, which is becoming a national model for cities grappling with Airbnb rentals, officials adopted an ordinance barring operators from renting out secondary residences, but made allowances for those listing their primary homes. The move came in response to the high number of affordable housing units listed on the site.
Tenants unions and nonprofit housing advocates are now hiring legal teams to set up sting operations identifying violators.
“We’ll actually make phone calls to landlords to get them to admit to the rental then include that declaration in our letter to the enforcing agency,” said Joseph Tobener, a San Francisco-based tenant rights lawyer whose firm was hired by the San Francisco Tenants Union to pursue Airbnb violators.
Paralegals regularly call suspected landlords after scoping them out online, then bait them with leading questions about their reviews and availability.
“When the host makes a statement to a third party, that’s admissible and survives the hearsay exception,” Tobener said.
But city planning departments and code enforcement officers are often hampered with work and lack the manpower to carry out enforcement of such ordinances, Tobener said.
Neighbors, however, can bring nuisance claims and file for an injunction against hosts operating vacation rentals, Tobener said.
At the county level
A lack of regulation in unincorporated regions of Santa Barbara County, where most Airbnb listings in the Valley are located, leaves hosts largely unencumbered, except for hospitality taxes they pay for their business.
This month, however, the Board of Supervisors requested the Planning and Development Department begin working on an ordinance regulating the units.
“It’s not clear how they’ll be regulated,” Assistant Director for Planning and Development Dianne Black said.
Zoning ordinances regulating what homeowners can do with their property leave many hosts frustrated.
“It's just another way of government trying to back big business and thwart the little guy,” said Debbie Carty, a Valley resident who began renting out her spare guesthouse on Airbnb two years ago to help pay for her kids’ college expenses.
During Airbnb Open 2014, an annual summit for hosts, Carty said she attended workshops about how to combat local government.
“It’s a movement. People are up in arms and ready to fight the government, their local governments, and Airbnb is getting more on board,” Carty said.
Getting answers in Santa Barbara
In the City of Santa Barbara a coalition of business owners, realtors and vacation rental property owners formed a Government Relationship Committee to address issues created by the exploding vacation rental market.
Formed by the Santa Barbara Association of Realtors, their goal is to present an action plan to the city within a year.
A lack of defined laws regarding vacation properties puts realtors in a gray area, said Lambert, who is a member of the coalition, leaving agents unsure of how they can market properties for sale.
“It's confusing for somebody selling property here because you can’t represent the fact that you can do a vacation rental, and you know people are intending to do that. It becomes a disclosure issue … and then makes it a very tough selling point. It could hurt property values in the area,” said Lambert.
Lack of regulation and the saturation of the vacation rental market, however, could be increasing property values, Tobener said.
Making property affordable
For Lambert, purchasing a second home in the Santa Ynez Valley was only possible by renting it to tourists on the weekends, a common investment strategy he said his clients have used for years.
Regulating vacation rentals could force Lambert to put his second home on the market.
“The only feasible way [to afford the home] was to vacation rent it and use it when it’s vacant. Why in the world would you send me a cease-and-desist letter?” Lambert asked. “If I’m not renting it, then I’m selling my house.”