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Rogers, Sheffield & Campbell Comments on Appeals Court Victory Ending Santa Barbara's Vacation Rental Ban
[May 06, 2021]

Rogers, Sheffield & Campbell Comments on Appeals Court Victory Ending Santa Barbara's Vacation Rental Ban


After 4 ½ years of litigation in Kracke v. City of Santa Barbara, on May 4, 2021, the 2nd District Court of Appeal certified the decision for publication and affirmed the trial court victory, which overturned Santa Barbara's short-term vacation rental ban in the coastal zone. Theo Kracke was awarded his costs.

This litigation has been closely followed and has statewide implications. During the appellate case, the California Coastal Commission filed an amicus curiae brief in support of Kracke's case while the League of Cities filed one in support of the City.

The victory means the banning of short-term rentals within California's coastal zone is considered a "development" under the Coastal Act and, therefore, requires Coastal Commission approval.

Travis Logue and Jason Wansor, attorneys with Rogers, Sheffield & Campbell LLP, represent Kracke.

Kracke said, "The City fought us every step of the way. City leaders must finally accept the fact that STVRs are a permissible use. Now is their prime opportunity to draft fair regulation of STVRs rather than continue to waste taxpayer money and seek review by the California Supreme Court."

According to Logue, "We've been in litigation now for nearly 5 years and the City of Santa Barbara has tried to bury our client in legal fees. Today's decision 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 in California and may be cited by other lawyers. I 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. The City of Santa Barbara elected to repeatedly ignore the Commission for the last 6 years and now must pay the price."



The Court of Appeal ruled the City failed to properly obtain the Coastal Commission's input or approval: "The City cannot act unilaterally, particularly when it not only allowed the operation of STVRs for years but also benefitted from the payment of transient occupancy taxes. In other words, the City did not merely 'turn a blind eye' to STVRs. It established procedures whereby a residential homeowner could operate a STVR by registering it with the City, obtaining a business license and paying the 12% daily transient occupancy tax. When the City abruptly changed this policy, it necessarily changed the intensity of use of and access to land and water in the Coastal zone. Instead of 114 coastal STVRs to choose from, City visitors are left with only 6. This regulatory reduction is inconsistent with the Coastal Act's goal of 'improving the availability of lower cost accommodations along the coast, particularly for low-income and middle-income families.'"

The Court of Appeal continues, "We agree with the trial court that 'the City cannot credibly contend that it did not produce a change because it deliberately acted to create a change' in coastal zone usage and access. This change constituted 'development' under the Coastal Act and, as such, required a CDP or, alternatively, an LCP amendment certified by the Commission or a waiver of such requirement. Without the Commission's input and approval, the court appropriately struck down the City's STVR regulation in the coastal zone."


Kracke v. City of Santa Barbara (Case No. 56-2016-00490376) was filed on November 30, 2016 in the City of Santa Barbara. Mr. Kracke's lawyers successfully changed the venue to Ventura. The City unsuccessfully tried to get the lawsuit dismissed on three occasions - the City filed two demurrers and an anti-SLAPP Motion, even arguing Kracke's suit was an effort to chill the City's First Amendment right to free speech. At the trial court level on March 8, 2019, Judge Borrell ruled in favor of Kracke. The City filed its appeal on September 6, 2019. The 2nd District Court of Appeal heard oral argument on March 10, 2021 and affirmed the trial court's decision on May 4, 2021. The City has the option to petition the California Supreme Court to hear the matter, though its chances of success would be slim.


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