City of Santa Barbara Lower Cost Overnight Accommodations Study

Final Report

Prepared for:

City of Santa Barbara

Prepared by:

Economic & Planning Systems, Inc.

August 30, 2019

EPS #184004 Final Report August 30, 2019 Lower Cost Overnight Accommodations Study Page 2

Table of Contents

1.Introduction and Background ...... 3

POLICY CONTEXT ...... 3

2.Overview of Santa Barbara LCOAs ...... 6

DEFINING LCOAS ...... 6

OVERVIEW OF SANTA BARBARA LCOA INVENTORY ...... 7

3.LCOA Policy and Programming ...... 11

POLICY FRAMEWORK ...... 11

POLICIES ...... 11

PROGRAMMING ...... 15

Appendices

Appendix A: Inventory of Overnight Accommodations Memorandum

Appendix B: Lower-Cost Overnight Accommodations Mitigation In-Lieu Fee Program Approach

Appendix C: CDP and LCP Policies Related to LCOA

List of Tables

Figure 1 Map of Coastal Zone ...... 5

Figure 2 Summary of Coastal Zone Inventory ...... 9

Figure 3 LCOA Units in the City of Santa Barbara Coastal Zone ...... 9

Figure 4 LCOA Units in the City of Santa Barbara Inland Area ...... 10

Figure 5 Total LCOA Units in City of Santa Barbara (Coastal Zone and Inland Area) ...... 10

Figure 6 Diagram of Policy Framework ...... 11

1. INTRODUCTION AND BACKGROUND

This study of Lower Cost Overnight Accommodations (LCOA) in the City of Santa Barbara (City) has been prepared by Economic & Planning Systems, Inc. (EPS). The City retained EPS to evaluate the supply of LCOA and inform related policy options, consistent with California Coastal Commission (CCC) regulations and guidance relating to the preservation and production of LCOA units in the Coastal Zone. This study is intended to guide the City’s approach to the preservation and production of LCOAs in the Coastal Zone and support implementation of the City’s Coastal Land Use Plan (LUP).

This introductory chapter is followed by an overview of the definitions of LCOA and the current supply of such units in the City (Chapter 2). The final chapter (Chapter 3) describes potential policies to preserve and produce LCOA units and recommends an approach, collaboratively developed by EPS and the City, most appropriate for the City of Santa Barbara.

The report is supported by three appendices. Appendix A is a detailed inventory analysis of the City’s LCOA conducted by EPS. Appendix B details the methodology and implementation steps that the City can use to establish a LCOA mitigation in-lieu fee program—a policy approach highly-promoted by the CCC and utilized in other coastal cities. Appendix C provides details on Coastal Development Permit (CDP) conditions and LUP policies in other coastal cities that have addressed the protection and production of LCOA units.

Policy Context

Many coastal communities in California face high demand for and an increasingly limited supply of LCOA. Overnight room rates have increased significantly over the years, making overnight stays prohibitively expensive for many Californians and visitors to the State. This is particularly apparent in popular destinations like Santa Barbara County, where the average daily rate (ADR) for hotel rooms has grown at an average annual rate of about six percent over the last five years, and particularly in the beach coast area, where ADRs consistently command a nearly 40 percent premium over the rest of the County.1

The CCC has expressed a growing concern that the lack of LCOA in the Coastal Zone statewide is limiting access to the coast. The California Coastal Act (CCA) addresses this concern in Section 30213: “Lower cost visitor and recreational facilities shall be protected, encouraged, and, where feasible, provided. Developments providing public recreational opportunities are preferred.” All local governments with jurisdiction within the Coastal Zone, including the City of Santa Barbara, are required to prepare a Local Coastal Program (LCP), which implements the provisions and policies of the Coastal Act at the local level and serves as the standard of review for development permitting in the Coastal Zone. To become effective, a jurisdiction’s LCP must be certified by the CCC and found consistent with the CCA. The City’s LCP contains a Coastal LUP that was certified by the CCC in 2019 and an Implementation Plan (IP) that was originally certified in 1986.

1 CBRE 2018 Travel Outlook Santa Barbara County Lodging Forecast

In January 2014, the City was awarded a grant from the CCC to comprehensively update the LUP, and embarked on a five-year extensive consultation process with CCC staff to ensure that the Draft Coastal LUP is in alignment with the CCA and the local priorities of the City. During that consultation process, it was determined that additional study and resources were needed to address the LCOA issue, given the particularly challenging conditions in Santa Barbara. These include a Coastal Zone area that is largely developed, has relatively high property values, and where nearly a third of the land area is designated as Open Space. A map of the City’s Coastal Zone is shown in Figure 1. Given these challenges, the City was awarded an additional grant from the CCC to draft a LCOA study and determine a pathway forward.

Figure 1 Map of Coastal Zone

Coastal Zone

Source: CCC Mapping Unit, Economic & Planning Systems

2. OVERVIEW OF SANTA BARBARA LCOAS

This chapter defines LCOA for the purposes of this analysis, consistent with CCC guidance. It also provides an overview of the City’s overnight accommodations and the LCOA inventory based on the CCC definition. A more detailed inventory analysis can be found in Appendix A.

Defini ng LCOAs

In order to establish policies related to the preservation and production of LCOA, it is necessary to first define what they are. The CCC generally divides overnight accommodations into three cost categories—“lower,” “moderate,” and “higher” cost. In a report produced for one of its recent public workshops on the topic of LCOA, dated October 26, 2016, the Commission provided guidance on the cost categories generally associated with different types of accommodations:

• “Campgrounds, cabins and hostels are typically lower cost by their nature.” Previous CCC workshop reports also state that these types of accommodations should generally be defined as lower cost accommodations.

• “Short term vacation rentals can provide a lower cost option, especially for larger groups or families, but because it is difficult to find data on short term vacation rentals, it is not clear how large a role they play in providing lower cost accommodations.” While the Commission expresses general support for the provision of short-term vacation rentals in the coastal zone, it does not provide further guidance on how to define the cost category of these accommodations

• “Hotels are by their nature more expensive than hostels, campgrounds and most cabins. Thus, the Commission’s determination of the rate of a lower cost hotel cannot be used to represent the definition of all lower cost overnight accommodations.” This statement underlines that the calculation of a lower-cost threshold, as defined below, is only directly applicable to the analysis of the average daily rates (ADR) of hotel and motel rooms.

The definition of the cost categories is based on a series of per unit ADR thresholds. Establishing these thresholds provides an understanding of the “affordability” of a city’s accommodation supply, and also a target ADR per unit that can be utilized in formulating LCOA mitigation policies. In the same October 26, 2016 report cited above, the CCC recommended that local governments determine the “lower-cost” threshold ADR per unit using an approach called the “simplified Robinson” methodology. Using this methodology, the lower-cost threshold would be the lower of either:

(1) 125 percent of the statewide annual ADR for all surveyed hotels and motels as determined by Smith Travel Research (STR) or

(2) The ADR for the local area for the “economy” segment of hotels and motels as determined by STR.

The CCC report also provides guidance on defining “moderate” and “higher” cost accommodations. Moderate-cost accommodations are those with ADRs per unit that fall between

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The following section establishes the “lower,” “moderate,” and “higher” cost thresholds for Santa Barbara and provides summary statistics on the City’s inventory in each of these tiers.

Overview of Santa Barbara LCOA Inventory

Cost Thresholds for Santa Barbara

Using STR data, EPS found that the statewide ADR in the surveyed months between April 2017 and March 2018 was $162. Applying the first calculation described in the “simplified Robinson” methodology results in an ADR of $202.50 ($162 x 125 percent). Continuing with the methodology, the next step in determining the City’s lower-cost threshold is to compare this ADR to the ADR of economy hotels in Santa Barbara.

STR categorizes participating hotels and motels into four tiered classes: budget, economy, mid- price, and upscale. Within Santa Barbara, STR classifies only four establishments as “economy”.2 Due to the small sample size and related privacy limitations, STR was unable to release its data on ADRs for the economy class subset in the City. As an alternative approach, EPS surveyed online room listings for the same four economy establishments, and calculated their weighted ADR,3 which came out to $167. Since $167 is lower than the $202.50 statewide rate, it was used to define the lower-cost threshold for the Santa Barbara Coastal Zone.

Using the methodology provided by the CCC for the other cost categories, EPS found that moderate cost accommodations in the Santa Barbara Coastal Zone are those with ADRs between $167 and $202.50 per unit, while higher cost accommodations are units with ADRs higher than $202.50.

The detailed inventory of units in the Coastal Zone shows that there are approximately 74 units in the City’s Coastal Zone that can be defined as lower-cost. There are also approximately 101 moderate-cost units and 1,696 higher-cost units in the Coastal Zone. The full list of overnight accommodations in the Coastal Zone and Inland Area are included in Appendix A.

Inventory Results

As a basis for analyzing the availability of LCOA, EPS worked with the City to develop an inventory of existing overnight accommodations within the Coastal Zone and related areas. The overnight accommodation inventory included three areas: 1) City Coastal Zone; 2) City Inland Area; and 3) Santa Barbara County Coastal Zone. The inventory was expanded beyond just the City’s narrow Coastal Zone boundary to account for inland accommodations, including

2 It should be noted that not all hotels participate in STR surveys. In Santa Barbara specifically, STR surveys 29 hotels. However, as detailed in the City’s LCP, there are 37 hotels and motels either existing or under development. Establishments that participate in STR surveys also tend to be larger hotels under a corporate flag.

3 The weighted average takes into account the number of rooms for each establishment, therefore giving more “weight” to larger establishments in calculating in the average room rate. This provides a more precise assessment of the average cost of economy rooms in the City.

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Figure 2 summarizes the ADR for each accommodation category for the inventory within each of the three geographic areas. The ADR for each category was weighted by total number of units. Overall, the annual ADR for all accommodations in the city’s Coastal Zone is $413, which is 255 percent higher than the statewide ADR. Only two categories within the City Coastal Zone fall within the lower-cost definition: recreational vehicles (RV) and boat slips (categorized as “other”). The Coastal Zone ADR is heavily affected by its high number of hotel and motel rooms. Furthermore, a number of the more expensive hotels in this inventory have more units, which means they are more heavily weighted in the ADR calculation. For example. the Fess Parker (Doubletree Resort), for example, has 360 rooms and averages $729 per night.

The City currently licenses 27 legal short-term vacation rental (STVR) units—seven in the Coastal Zone and 20 in the Inland Area. The ADR for the STVRs in the Coastal Zone is $293, and the ADR for the STVRs in the Inland Area is $365. Based on EPS’s inventory, none of these units can be categorized as lower-cost. While there are a number of additional factors that could be taken into account regarding the affordability of STVRs, including their capacity and in-unit amenities, taking these factors into account would not provide an “apples to apples” comparison to hotels and motels in determining the units’ cost categorization. However, given that the sample size of STVRs in Santa Barbara is small, it cannot be definitely stated that such units in the City are likely to be LCOA options.

The accommodations located in the Countywide Coastal Zone, inclusive of those in the City Coastal Zone, average $411 per night for all accommodation types. The ADR for the Hotel and Motels category specifically is substantially higher in the County Coastal Zone ($521 per night) and City Coastal Zone ($427 per night) than in the County and City overall ($220 and $302 per night, respectively). This difference reflects the price premium for a coastal location; a premium further underlined by calculating the ADR for Hotels and Motels in the City’s Inland Area, which is just $284 per night.

Figure 2 Summary of Coastal Zone Inventory

Percent of Cost per Night as Pct. of Cost per Night as Pct. of Number of Total Avg. Cost Average for Average for Units Capacity Capacity per Night (Year-Round) (Peak) City [1] County [2] State [3] City [1] County [2] State [3]

City Coastal Zone Hotels & Motels 1,801 5,698 93% $427 169% 226% 264% 141% 194% 253% Hostel 31 70 1% $335 133% 177% 207% 111% 152% 198% RV 33 198 3% $65 26% 34% 40% 22% 30% 38% STVR 7 36 1% $293 116% 155% 181% 97% 133% 174% Other 30 120 2% $33 13% 17% 20% 11% 15% 20% Coastal Zone 1,902 6,122 100% $413 164% 218% 255% 137% 188% 244%

City Inland Area [4] Hotels & Motels 1,195 N/A N/A $284 113% 150% 175% 94% 129% 168% Hostel 8 N/A N/A $100 40% 53% 62% 33% 45% 59% Campsite 0 0 0 N/A N/A N/A N/A N/A N/A N/A RV 0 0 0 N/A N/A N/A N/A N/A N/A N/A STVR 20 N/A N/A $365 145% 193% 226% 121% 166% 216% Other 0 0 0 N/A N/A N/A N/A N/A N/A N/A Inland Area 1,223 N/A N/A $283 112% 150% 175% 94% 129% 168%

Countywide Coastal Zone Hotels & Motels 3,141 10,020 57% $521 207% 276% 322% 172% 237% 308% Hostel 31 70 0% $335 133% 177% 207% 111% 152% 198% Campsite 804 6,520 37% $42 N/A N/A N/A N/A N/A N/A RV 113 838 5% $107 43% 57% 66% 36% 49% 64% STVR [5] N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Other 30 120 1% $33 13% 17% 20% 11% 15% 20% Coastal Zone 4,119 17,568 100% $411 163% 217% 254% 136% 187% 243%

[1] Citywide average Year (April 2017-March 2018): $252, Peak (June 2017-September 2017): $302; Smith Travel Research for hotels and motels only [2] Countywide average Year (April 2017-March 2018): $189, Peak (June 2017-September 2017): $220; Smith Travel Research for hotels and motels only [3] Statewide average Year (April 2017-March 2018): $162, Peak (June 2017-September 2017): $169; Smith Travel Research for hotels and motels only [4] Capacity for inland area not documented in this study. [5] Short-term vacation rentals for countywide coastal zone not documented in this study. Sources: City of Santa Barbara, California Coastal Commission, Smith Travel Research, Accommodation websites.

As stated above, of the 1,902 accommodations units in the City’s Coastal Zone, only 75 units, or 4 percent of the Coastal Zone inventory, are LCOA, shown in Figure 3.

Figure 3 LCOA Units in the City of Santa Barbara Coastal Zone

1,828 (96%) 100%

75%

50%

25% 74 (4%) 0% Yes No

Source: STR; Economic & Planning Systems

Given the particularly limiting geography of the Santa Barbara coast, EPS discussed with City staff and CCC staff the merits of including the Inland Area inventory in the consideration of LCOA supply. Although not within the Coastal LUP jurisdiction, these options can still serve the needs of public access the coast. The Downtown and Waterfront shuttle service, local bus lines, bike facilities, and other options allow visitors to choose lower cost options inland and still have coastal access. Figure 4 shows that of the 1,223 units in the City’s Inland Area, 136, or about 11 percent of the Inland Area inventory, are LCOA.

Figure 4 LCOA Units in the City of Santa Barbara Inland Area

100% 1,087 (89%)

75%

50%

25% 136 (11%)

0% Yes No

Source: STR; Economic & Planning Systems

From a Citywide perspective, including both the Coastal Zone and the Inland Area, the accommodations inventory is 3,125 units, of which 210, or 7 percent, are LCOA, as shown in Figure 5. In comparison, approximately 26 percent of the statewide Coastal Zone’s inventory (64,781 units including hotels, motels, and RV/campsites) are LCOA.

Figure 5 Total LCOA Units in City of Santa Barbara (Coastal Zone and Inland Area)

2,915 (93%) 100%

75%

50%

25% 210 (7%) 0% Yes No

Source: STR; Economic & Planning Systems

3. LCOA POLICY AND PROGRAMMING

This chapter provides an overview of potential policy approaches that the City could pursue to address the CCA’s LCOA objectives. It also presents recommendations developed with City input for LCOA policies and related programming efforts that are most appropriate for Santa Barbara. A more detailed discussion of one of these policies—a mitigation in-lieu fee program—is included in Appendix B, and additional case study examples of LCOA-related CDP conditions and LCP policies are included in Appendix C.

Policy Framework

The following diagram (Figure 6) illustrates the overall policy framework proposed as part of this study. The policies define the objectives that address state regulations related to LCOA and detail the approach to meeting those objectives. Programming efforts are tools which can be used to implement those policies.

Figure 6 Diagram of Policy Framework

The City’s directive from the CCC is to ensure policies are consistent with the CCA regulations, including Section 30213. As such, the City’s primary objectives for LCOA policies are to protect, encourage, and provide LCOA within the confines of the City’s built environment while also protecting and maximizing public access to the coast. That said, LCOAs represent just one type of facility or service to help lower-income members of the public to access and recreate at the coast. Thus, the City’s approach will have this broader perspective in mind.

Policies

EPS considered LCOA policies that have been supported by the CCC elsewhere, as well as those that represent new approaches consistent with broader CCC goals. It should be noted that the City’s policy options are limited by State-mandated restriction on price-setting or means-testing. In other words, LCOA policies cannot require that overnight accommodation prices be fixed at a

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Existing City Policy Approach

The Coastal Act and the City’s Coastal LUP policies protect and encourage lower cost visitor and recreational facilities. New or substantially redeveloped hotel and motel development within the Coastal Zone is required, where feasible, to provide a range of rooms and room prices to serve all income ranges. In addition, removal or conversion of existing lower cost visitor-serving uses and overnight accommodations is prohibited, unless the use is replaced by a facility offering comparable visitor-serving opportunities. Typically, new or redeveloped hotel and motel projects are considered consistent with the Coastal LUP if they propose a range of room sizes at varying rates, competitive with nearby hotels.

Existing CCC Policy Approaches

In identifying the appropriate policy approaches for the City, EPS and City staff reviewed CCC staff reports and recommendations regarding Coastal Development Permits (CDP) and other jurisdictions’ LCPs to understand which policies have been supported by the CCC and what sorts of approaches the Commission will consider. Based on this review, EPS and City staff found that the CCC has recognized three main types of LCOA policies, detailed below:

1) Policies that protect existing LCOAs: In order to protect existing LCOAs, the CCC staff has suggested an approach in which applications for developments that would eliminate existing LCOAs (through demolition or remodeling to higher cost units) are denied as submitted, and the project is required to mitigate for the loss of LCOA units with new on-site lower cost units or with in-lieu fees. Another option, as suggested by the Coastal Conservancy, is for public agencies to purchase existing LCOA facilities, or facilities that could be repurposed as LCOA, and partner with an operator (likely a non-profit organization) to maintain the facilities as lower-cost.

As detailed in the inventory presented above, there are just 75 existing LCOA units in Santa Barbara’s Coastal Zone, of which the City already owns 30 (the Waterfront Boat Guest Slips). For this reason, policies that aim to protect existing LCOA units in the City’s Coastal Zone would have limited reach.

2) Policies that require new hotel development to include LCOA: The CCC typically requires new higher-cost hotels developed in the coastal zone to set aside a portion of their units as lower-cost (although they allow case-by-case exceptions if local market and economic conditions warrant it or if the applicant provides other substantial public access benefits). The typical requirement is for at least 25 percent of new units in the development to be designated lower-cost, in addition to replacing 100 percent of any LCOA units lost through the new development (if the project includes demolishing existing LCOA units). The LCOA units can be provided on-site or off-site.

In the past, this requirement has not been applied to moderate-cost hotels, although CCC staff made a preliminary recommendation that the Commission require moderate cost hotels to provide lower cost accommodations at a rate proportionate to the proposed room rates.4

4 CCC Public Workshop: Lower Cost Visitor Serving Accommodations October 26, 2016.

Since neither the City nor the CCC can set room rates for privately owned and operated accommodations, LCOA policies are typically focused on new or substantially remodeled projects. Specifically, local jurisdictions can require hotel developers / operators to set-aside or dedicate (e.g. through deed restriction) a portion of their rooms at lower cost rates, but the lower cost units have to be available to the general public; the proprietor cannot identify low- or moderate- income persons to determine eligibility for booking the lower-cost units. The threshold for lower- cost for an area (as described above) can be compared to anticipated and actual room rates to evaluate if the new development is providing adequate LCOA facilities. In some jurisdictions, such as Morro Bay, CDP conditions have included regular monitoring of the ADRs of on-site lower-cost units, to further verify that lower-cost rates are being maintained.

3) Policies that require an in-lieu fee to fund development of LCOA: In place of developing on-site or off-site LCOA units as part of a new hotel development, the CCC has required developers to pay an in-lieu fee to be used towards the construction of new LCOA units. The fee has historically been calculated based on the cost to provide a new hostel bed or campground unit. However, the CCC is reconsidering this approach, for two primary reasons. First, it has become clear that these fees have been insufficient to cover the full cost of developing new accommodations of any type. Second, it is not appropriate from a capacity standpoint to mitigate the loss of a lower-cost hotel room with the development of a hostel bed or campground unit, as these types of accommodations potentially serve different types of visitors.

Specific examples of recent CDP conditions and LCP policies related to provision of LCOA are included in Appendix C.

A new mitigation program in the City, whether through on-site, off-site, or in-lieu fee provisions, will only apply to projects that require a CDP, such as the development of a new hotel on a vacant or underutilized lot or when an existing hotel remodels to the extent that constitutes “substantial redevelopment.”

In the City’s Coastal LUP, there are two thresholds for “substantial redevelopment,” with a stricter standard in areas impacted by coastal erosion, bluff failure, and other coastal hazards. While roughly 80 percent of existing hotels in the City’s Coastal Zone may be impacted by coastal flooding due to sea level rise by the year 2100, coastal flooding is not currently included in the list of coastal hazards that require the stricter standard, and most existing hotels are not anticipated to be impacted by the coastal hazards that do require the stricter standard.

However, the City is currently drafting a Sea Level Rise Adaptation Plan that will evaluate the updated LUP’s policy approach to addressing coastal hazards, and may recommend modifying the thresholds for “substantial redevelopment” in coastal flooding areas. Should that occur, it is likely that a higher number of existing hotels will be subject to a new LCOA mitigation program when remodeling.

Other Potential Policy Approaches

In addition to the three standard CCC policies described above, there are a range of more holistic approaches to support access to the coast. While these approaches have not been vetted as part of the current study effort, they are worth noting, given their likely efficacy in achieving the CCC’s larger policy mandate of enhancing public access. The broad categories include:

1) Expanding the geography for qualifying LCOAs: While the CCC only has jurisdiction over the Coastal Zone, the City of Santa Barbara has the option to apply policies across the entire City, including the entirety of the Inland Area, for example. One related approach would be to expand the geographical definition of coastal influence applicable to LCOAs. This would open up opportunities for sites on which to protect LCOAs and mitigate the impact of new moderate- and higher-cost accommodations, and allow for more opportunities for funding new LCOA development. It also recognizes the reality of the broader tourist market in places like Santa Barbara.

2) Improving physical and programmatic access: The City may also consider policies that expand access to the coast in ways that are not directly related to creating or preserving LCOA. This could include lowering other costs associated with visiting the coast, making such visits logistically easier, and reducing the overall cost of visiting the area. In considering this approach, the City should be aware that CCC staff have emphasized that LCOA policies must be directly related to supporting access to overnight accommodations. For example, the CCC will not accept a policy that seeks to improve the City’s shuttle system unless the shuttle explicitly connects visitors to and from overnight accommodations and the coast.

Priority Policy Approaches for Santa Barbara

While the above sections represent a spectrum of policy options for the City to consider in relation to supporting LCOAs, not every approach fits the context of Santa Barbara. Based on stakeholder input and discussions with City staff, EPS has developed the following priority policy approaches to preserve and protect LCOA in the Coastal Zone:

• Require an in-lieu fee from new hotel projects to fund development of new LCOA units within the vicinity of the City of Santa Barbara or in greater Santa Barbara County. The fee would be charged to all new development of overnight accommodations, whether or not the development eliminates existing LCOA units (but excluding development types that are already defined as lower-cost). The fee level would be determined based on a set of project attributes, to be defined by the City. Appendix B provides more detail on other cities’ in-lieu fee programs and the recommended methodology and implementation steps for the City to establish its own fee program. • Invest in improved physical access to the coast for visitors who are staying inland or visiting for the day. • Invest in and encourage improved programming around coastal access for visitors from a range of locations and representing a range of ages and income levels.

Programming

The programming efforts to implement the recommended LCOA policies stated above may include, but are not limited to, the following:

• Establish a fee program to provide funding for the development of new LCOA units, public access improvements, and lower cost recreational facilities and programs (see Appendix B for specific EPS recommendations on methodological approaches to implementing a fee program). • Identify appropriate cost index (i.e. Consumer Price Index, Building Cost Index) to use in annual escalation of in-lieu fee. • Encourage, and provide financial support through the in-lieu fee program, to developers, property owners, not-for-profit organizations, the County, the Coastal Conservancy, and other interested and appropriate entities to buy and/or rehabilitate existing LCOA units and operate them. • Establish and/or encourage, and provide financial support through the in-lieu fee program, to programs with hoteliers, UCSB, and others that facilitate opportunities for youth and under-represented groups to recreate and/or stay in Santa Barbara, particularly during low season. • Expand and improve existing free and low-cost transportation options to the coast, including the Downtown and Waterfront shuttle service, local bus lines, and bike facilities. Partner with hotel operators to promote and subsidize use of these options. • Increase informational and wayfinding infrastructure to facilitate visitor navigation around the City and to the coast.

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APPENDIX A:

Inventory of Overnight Accommodations Memorandum

M EMORANDUM

To: Rosie Dyste and Timmy Bolton, City of Santa Barbara

From: Jason Moody, Michelle Chung, and Julie Cooper, EPS

Subject: Inventory of Overnight Accommodations; EPS #184004

Date: August 30, 2019

EPS has been retained by the City of Santa Barbara to evaluate the supply of lower-cost overnight accommodations (LCOA) in the City of Santa Barbara’s Coastal Zone. A key goal of the analysis is to establish a framework to develop policies that help create and preserve lower-cost access to the coast. As a basis for analyzing the availability of LCOA, EPS worked with the City to develop an inventory of existing overnight accommodations within the Coastal Zone and related areas. The inventory includes hotels, hostels, camping facilities (tent camping, recreational vehicles, cabins), boat slips, and short-term legal vacation rentals.

Figures 1 and 2 illustrate occupancy rate trends and average daily rate for hotels and motels in the City of Santa Barbara, County of Santa Barbara, and state of California. As shown, occupancy rates for City and County of Santa Barbara track the occupancy rate for the state overall. The annual average occupancy rate for the City in the past year (between April 2017 and March 2018) was 75.3 percent, compared to 75.5 percent for the state overall. Month to month occupancy rates are generally consistent across the three geographies, although both the City and County have lower occupancy rates than the state in winter months, falling more than 10 percent below the statewide average in December 2017.1

Average daily hotel and motel rates in the City of Santa Barbara are substantially higher than in the County and in the state overall. The annual average rate for the City in the past year was $252 per night, compared to $162 per night for the state overall (55 percent greater).

1 Occupancy rates during this month were heavily influenced by the Thomas Fire, a major wildfire that required evacuations and road closures throughout Ventura and Santa Barbara Counties. Appendix A Inventory of Overnight Accommodations Memorandum Page 2

Average daily rate is particularly high in the summer months in Santa Barbara, with a high of $327 per night in August 2017.2

Figure 1 Hotel and Motel Occupancy Rates Q4 2016-Q1 2018

100.0

90.0

80.0 City of Santa Barbara 70.0

60.0

50.0 Santa Barbara County 40.0

Percent Occupancy 30.0

20.0 California 10.0

0.0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2016 2017 2018 Month

Source: STR

Figure 2 Hotel and Motel Average Daily Rates Q4 2016-Q1 2018

$350

$300

City of Santa Barbara $250

$200

$150 Santa Barbara County

$100

Average Daily Rate (ADR) $50 California

$0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2016 2017 2018 Month

Source: STR

Table 1 summarizes the inventory by accommodation category for the City Coastal Zone compared to elsewhere in the City, as well as in the County Coastal Zone, respectively (Tables 2, 3, and 4 provide the detailed, establishment level data). The average cost per night for each category has been weighted per total number of units (see Methodology for further explanation on units). Two categories stand out as lower-cost accommodations: recreational vehicle (RV)

2 Average daily rates for hotels and motels are provided by Smith Travel Research (STR) and are based on the subset of citywide and countywide establishments which participate in STR’s surveys.

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parks and Santa Barbara Harbor guest boat slips for visitor berthing. Although each require RV or boat ownership, the daily rate for each of these options is well below the City, County, and statewide averages. That said, the average year-round cost per night per unit for all accommodations in the City’s Coastal Zone is $413, 255 percent higher than the statewide year- round average cost per night. The average is heavily affected by the number of hotel and motel rooms in the City’s Coastal Zone. Furthermore, a number of the more expensive hotels in this inventory have more units; the Fess Parker (Hilton Santa Barbara Beachfront Resort), for example, has 360 rooms and averages $729 per night.

The Countywide Coastal Zone accommodations included in this inventory, inclusive of those in the City Coastal Zone, average $411 per night for all accommodations. The Countywide hotel and motel average cost per night is substantially higher than in the City inland area, at $521 per night; these rates reflect the price premium for a coastal location. In contrast, the average cost per night in the inland area (including hotels, motels, and legal short-term vacation rentals within the City of Santa Barbara excluding the Coastal Zone) is $283 per night. Note that the inland average is primarily driven by the relatively low average daily rate of the hotels and motels, as there are no hostels, campsites, or short-term stay RV options located in the City’s inland area. EPS will consider the availability of these inland accommodations in relation to its policy recommendations.

Table 1 Summary of Existing Overnight Accommodations Inventory

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Methodology

Inventory Boundary

EPS used the California Coastal Commission’s definition of the “Coastal Zone” to bound the coastal areas for the inventory. Statewide, the California Coastal Commission (CCC) recognizes the “Coastal Zone” as land and water areas extending seaward to the state's outer limit of jurisdiction (3 miles offshore) including all offshore islands and extending inland generally 1,000 yards from the mean high tide line. In significant coastal estuarine, habitat, and recreational areas, it extends inland to the first major ridgeline paralleling the sea or five miles from the mean high tide line of the sea, whichever is less, and in developed urban areas the zone generally extends inland less than 1,000 yards (Coastal Act Section 30103). The City of Santa Barbara Coastal Zone, as shown in the Figure 3, encompasses a total area of three square miles (not including the Airport). EPS also documented accommodations within Santa Barbara County’s incorporated and unincorporated areas, including the Channel Islands, for context, as summarized in Table 4.

Overall Hotel and Motel Rates

EPS used the information and sources indicated in the City of Santa Barbara Coastal Land Use Plan Chapter 3.2 Visitor-Serving & Recreational Facilities as a starting point and updated and verified contents accordingly. In addition, EPS obtained hotel/motel availability and performance reports from Smith Travel Research (STR, global hotel industry data provider) and CB Richard Ellis (CBRE, commercial real estate and investment firm) to document supply, occupancy rates, and average daily room rates3 for hotels/motels in the City and County to compare with those directly within the City’s Coastal Zone. Specifically, the STR trend reports provided average daily rates by month for participating hotels and motels in the City of Santa Barbara, the County of Santa Barbara, and the state of California. The CBRE reports provided average daily hotel and motel rates by month for sample sets in additional areas near the City, including Montecito, Carpinteria, Goleta, Solvang/Santa Ynez Valley, and Lompoc/Santa Maria Valley.

Units and Capacity

Capacities indicated for each facility represent the number of units4 on site multiplied by the maximum number of people per unit as informed by the Coastal Conservancy’s statewide coastal lodging inventory. Exceptions to this calculation where made for City guest boat slips, which were estimated based on City staff’s input on average number of people per stay; for short-term vacation rentals, which were based on the capacity indicated on host website; and for hostels, which were estimated as one person per bed for dorm rooms and two people per bed for private rooms. Note that the maximum number of people allowed per unit was used for this calculation to maintain consistency across the categories and may not reflect the number of people who choose to stay in each unit per night. Consequently, the average cost per person per night

3 STR “average daily rate” accounts for room revenue (for room only, not including parking, food and beverage, taxes) divided by rooms sold.

4 In the case of legal STVRs, a “unit” is defined as the full rental property, even if it includes multiple rooms. For all other types of accommodations, a “unit” is defined as a single room or space. For STVR properties where there are multiple units can be rented separately, each of these rental units are considered a “unit.”

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Coastal Zone Hotels, Motels, and Hostels

EPS obtained the Coastal Conservancy’s statewide coastal lodging inventory through the City. This inventory had information for a majority of accommodations, including the name, address, number of units (rooms for hotels and motels, sites for campgrounds), ADR in summer 2016, and ADR in winter 2016. Since this inventory was created in 2016, EPS updated capacity and pricing for each entry (for summer only). Hotel and motel prices were obtained using internet searches of prices available on each accommodation’s website, using a randomly selected weekday date in July 2018 to gather insight on pricing in popular summer months. For consistency, the cost per night reflects the lowest price available. In some cases, pricing information was not accessible online, and was instead obtained via phone calls. The inventory reflects properties that are available as of October 2018.

Campground Facilities

Campground facilities are by their nature lower cost, and many Local Coastal Programs (LCPs) identify and protect these facilities as a matter of policy. There are currently no campground facilities in the City of Santa Barbara’s Coastal Zone. As shown in Table 4, there are several campgrounds near the City within Santa Barbara County. EPS documented these campground facilities for context and may take the proximity of these options into consideration for forthcoming policy recommendations. Campground facility information originated from the Coastal Conservancy’s statewide coastal lodging inventory. EPS confirmed and updated cost per night, capacity, and location information by referencing Recreation.gov and independent accommodations websites where applicable. “People per unit” refers to the maximum number of people allowed on each site, per Recreation.gov or the respective accommodations website.

Short-Term Vacation Rental Units

In the City of Santa Barbara, short-term vacation rentals (STVRs), including vacation rentals and home sharing occupied for less than 30 consecutive days, are regulated as "Hotels," pursuant to the definition in the Zoning Ordinance, and allowed only in zones where hotel uses are allowed. To operate legally, STVRs must receive land use approvals and permits. EPS included in the inventory only units that have completed the City’s short-term vacation rental permit process and are therefore legal units. Legal STVRs were not included in the Countywide Coastal Zone inventory as that data was not readily available. EPS obtained cost per night using links to listings on STVR websites (e.g., AirBnB) and/or each accommodation’s website, as provided by the City staff, based on a randomly selected weekday date in October 2019. STVR rates listed in the inventory table do not include cleaning and service fees. For properties with multiple units, the cost per night listed is an average of the cost per night listed for each unit.

Recreational Vehicle Facilities (RV)

Recreational vehicle (RV) facilities were included in the Coastal Conservancy’s statewide coastal lodging inventory and confirmed by the City of Santa Barbara’s internal inventory of mobile home and recreational vehicle parks. EPS only included facilities that allow short-term stays, as defined by 30 days or fewer. The one qualifying facility, Sunrise RV Park, indicated maximum occupancy and cost per night on a calendar on the website.

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Guest Boat Slips

The City of Santa Barbara provided insight that visitors to the city have the option of docking personal or commercial boats at the waterfront for overnight stays, limited to 28 cumulative days. Under this guidance, guest boat slips were also included in this inventory. The data and assumptions were provided by the City's Waterfront Department.

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Figure 3 Map of Coastal Zone

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Table 2 Inventory of Overnight Accommodations in the Coastal Zone within the City of Santa Barbara Facility Name Address City Category Units People Capacity Cost Per Cost Per Percent Percent Percent Percent Percent Percent per Unit Night Night City County State City County State Per Year [1] Year [2] Year [3] Peak [1] Peak [2] Peak [3] Person The Wayfarer [4] 12 E Montecito St Santa Barbara Hostel 27 2 54 $335 $168 133% 177% 207% 111% 152% 198% The Wayfarer [4] 12 E Montecito St Santa Barbara Hostel 4 4 16 $335 $84 133% 177% 207% 111% 152% 198% Blue Sands Motel 421 S Milpas St Santa Barbara Hotels & Motels 11 2 22 $165 $83 65% 87% 102% 55% 75% 98% Castillo Inn 22 Castillo St Santa Barbara Hotels & Motels 21 4 84 $170 $43 67% 90% 105% 56% 77% 101% Avania Inn of Santa Barbara 128 Castillo St Santa Barbara Hotels & Motels 46 2 92 $180 $90 71% 95% 111% 60% 82% 107% Casa Del Mar Inn 18 Bath St Santa Barbara Hotels & Motels 21 2 42 $197 $99 78% 104% 122% 65% 90% 117% Old Yacht Club Inn 431 Corona Del Mar Santa Barbara Hotels & Motels 13 2 26 $199 $100 79% 105% 123% 66% 90% 118% Ala Mar Motel 102 W Cabrillo Blvd Santa Barbara Hotels & Motels 18 4 72 $204 $51 81% 108% 126% 68% 93% 121% Coast Village Inn 1188 Coast Village Rd Santa Barbara Hotels & Motels 28 2 56 $209 $105 83% 111% 129% 69% 95% 124% Marina Beach Motel 21 Bath St Santa Barbara Hotels & Motels 32 4 128 $210 $53 83% 111% 130% 70% 95% 124% Motel 6 443 Corona Del Mar Santa Barbara Hotels & Motels 51 2 102 $226 $113 90% 120% 140% 75% 103% 134% Lavender Inn by the Sea 206 Castillo St Santa Barbara Hotels & Motels 23 4 92 $230 $58 91% 122% 142% 76% 105% 136% Franciscan Inn 109 Bath St Santa Barbara Hotels & Motels 78 2 156 $231 $116 92% 122% 143% 76% 105% 137% Inn at East Beach 1029 Orilla Del Mar Dr Santa Barbara Hotels & Motels 33 2 66 $248 $124 98% 131% 153% 82% 113% 147% Inn by the Harbor 433 W Montecito St Santa Barbara Hotels & Motels 42 4 168 $261 $65 104% 138% 161% 86% 119% 154% Beach House Inn 320 W Yanonali St Santa Barbara Hotels & Motels 12 4 48 $262 $66 104% 139% 162% 87% 119% 155% Hyatt Centric Santa Barbara House (Parkside Inn) 424 Por La Mar Santa Barbara Hotels & Motels 24 3 72 $280 $93 111% 148% 173% 93% 127% 166% Brisas del Mar 223 Castillo St Santa Barbara Hotels & Motels 31 3 93 $284 $95 113% 150% 175% 94% 129% 168% Harbor House Inn 104 Bath St Santa Barbara Hotels & Motels 17 2 34 $292 $146 116% 154% 180% 97% 133% 173% Eagle Inn 232 Natoma Ave Santa Barbara Hotels & Motels 31 3 93 $301 $100 119% 159% 186% 100% 137% 178% Best Western Beachside Inn 336 W Cabrillo Blvd Santa Barbara Hotels & Motels 60 2 120 $305 $153 121% 161% 188% 101% 139% 180% Mason Beach Inn 324 W Mason St Santa Barbara Hotels & Motels 45 2 90 $306 $153 121% 162% 189% 101% 139% 181% Cabrillo Inn at the Beach 931 E Cabrillo Blvd Santa Barbara Hotels & Motels 39 4 156 $311 $78 123% 165% 192% 103% 141% 184% Pacific Crest Hotel 433 Corona Del Mar Santa Barbara Hotels & Motels 20 2 40 $336 $168 133% 178% 207% 111% 153% 199% Villa Rosa 15 Chapala St Santa Barbara Hotels & Motels 18 2 36 $337 $169 134% 178% 208% 112% 153% 199% Hotel Milo Santa Barbara 202 W Cabrillo Blvd Santa Barbara Hotels & Motels 122 4 488 $366 $92 145% 194% 226% 121% 166% 217% Montecito Inn 1295 Coast Village Rd Santa Barbara Hotels & Motels 61 2 122 $401 $201 159% 212% 248% 133% 182% 237% Santa Barbara Inn 901 E Cabrillo Blvd Santa Barbara Hotels & Motels 71 2 142 $406 $203 161% 215% 251% 134% 185% 240% West Beach Inn 306 W Cabrillo Blvd Santa Barbara Hotels & Motels 44 4 176 $428 $107 170% 226% 264% 142% 195% 253% Hotel Indigo Santa Barbara 121 State St Santa Barbara Hotels & Motels 41 2 82 $433 $217 172% 229% 267% 143% 197% 256% Harbor View Inn 28 W Cabrillo Blvd Santa Barbara Hotels & Motels 96 2 192 $457 $229 181% 242% 282% 151% 208% 270% Hotel Californian 35 State St Santa Barbara Hotels & Motels 121 4 484 $488 $122 194% 258% 301% 162% 222% 289% Hyatt Centric Santa Barbara 1111 E Cabrillo Blvd Santa Barbara Hotels & Motels 171 4 684 $518 $130 206% 274% 320% 172% 235% 307% The Fess Parker, A Doubletree Resort by Hilton 633 E Cabrillo Blvd Santa Barbara Hotels & Motels 360 4 1440 $729 $182 289% 386% 450% 241% 331% 431% Waterfront Boat Guest Slips 132 Harbor Way Santa Barbara Other 30 4 120 $33 $8 13% 17% 20% 11% 15% 20%

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Sources: City of Santa Barbara, California Coastal Commission, Smith Travel Research, Accommodation websites.

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Table 3 Inventory of Overnight Accommodations in the Inland Portion of the City of Santa Barbara Facility Name Address Category Units Cost Per Percent City Percent Percent Percent Percent Percent Night Year [1] County State Year City Peak County State Peak Year [2] [3] [1] Peak [2] [3] IHSP Santa Barbara 111 N Milpas St Hostel 8 $100 40% 53% 62% 33% 45% 59% Holiday Lodge 2825 State St Hotels & Motels 13 $120 48% 63% 74% 40% 55% 71% Motel 6 #2 - Santa Barbara 3505 State St Hotels & Motels 59 $140 56% 74% 86% 46% 64% 83% Oasis Inn & Suites 3344 State St Hotels & Motels 33 $160 63% 85% 99% 53% 73% 95% Town & Country Inn 2800 State St Hotels & Motels 23 $160 63% 85% 99% 53% 73% 95% Agave Inn 3222 State St Hotels & Motels 27 $169 67% 89% 104% 56% 77% 100% Rose Garden Inn 3643 State St Hotels & Motels 35 $170 67% 90% 105% 56% 77% 101% A White Jasmine Inn 1327 Bath St Hotels & Motels 11 $179 71% 95% 110% 59% 81% 106% Sunset Motel 3504 State St Hotels & Motels 18 $180 71% 95% 111% 60% 82% 107% Sandpiper Lodge 3525 State St Hotels & Motels 74 $190 75% 101% 117% 63% 86% 112% Bath Street Inn Bed & Breakfast 1720 Bath St Hotels & Motels 12 $195 77% 103% 120% 65% 89% 115% Quality Inn 3055 De La Vina St Hotels & Motels 34 $200 79% 106% 123% 66% 91% 118% Secret Garden Inn & Cottages 1908 Bath St Hotels & Motels 11 $200 79% 106% 123% 66% 91% 118% The Presidio 1620 State St Hotels & Motels 16 $210 83% 111% 130% 70% 95% 124% Best Western Plus Encina Inn & Suites 2220 Bath St Hotels & Motels 121 $219 87% 116% 135% 73% 100% 130% Best Western Plus Pepper Tree Inn 3850 State St Hotels & Motels 150 $229 91% 121% 141% 76% 104% 136% Lemon Tree Inn 2819 State St Hotels & Motels 95 $250 99% 132% 154% 83% 114% 148% Orange Tree Inn 1920 State St Hotels & Motels 38 $260 103% 138% 160% 86% 118% 154% Cheshire Cat Inn 36 W Valerio St Hotels & Motels 18 $270 107% 143% 167% 89% 123% 160% La Quinta Inn & Suites 1601 State St Hotels & Motels 68 $270 107% 143% 167% 89% 123% 160% The Upham Hotel and Country House 1404 De La Vina Hotels & Motels 50 $280 111% 148% 173% 93% 127% 166% Holiday Inn Express Hotel Virginia 17 W Haley St Hotels & Motels 61 $300 119% 159% 185% 99% 136% 178% Kimpton Canary Hotel 31 West Carrillo St Hotels & Motels 97 $490 194% 259% 302% 162% 223% 290% Spanish Garden Inn 915 Garden St Hotels & Motels 24 $560 222% 296% 346% 185% 255% 331% Simpson House Inn 121 E Arrellaga St Hotels & Motels 15 $570 226% 302% 352% 189% 259% 337% Belmond El Encanto 800 Alvarado Place Hotels & Motels 92 $616 244% 326% 380% 204% 280% 364% 1608 Bath St 1608 Bath St STVR 1 $195 77% 103% 120% 65% 89% 115% 410 E Haley St 410 E Haley St STVR 1 $210 83% 111% 130% 70% 95% 124% 402 Anacapa St. 402 Anacapa St. STVR 3 $235 93% 125% 145% 78% 107% 139% 316 W Pedregosa St 316 W Pedregosa St STVR 1 $250 99% 132% 154% 83% 114% 148% 513 Santa Barbara St 513 Santa Barbara St STVR 1 $250 99% 132% 154% 83% 114% 148% 819 Garden St 819 Garden St STVR 1 $280 111% 148% 173% 93% 127% 166% 102-106 W Islay St /1805 Chapala St 102-106 W Islay St /1805 Chapala St STVR 1 $295 117% 156% 182% 98% 134% 175% 13 W Haley St [4] 13 W Haley St STVR 1 $325 129% 172% 201% 108% 148% 192% 216 W Haley 216 W Haley STVR 1 $366 145% 194% 226% 121% 166% 217%

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[1] Citywide average Year (April 2017-March 2018): $252, Peak (June 2017-September 2017): $302; Smith Travel Research hotels and motels only [2] Countywide average Year (April 2017-March 2018): $189, Peak (June 2017-September 2017): $220; Smith Travel Research hotels and motels only [3] Statewide average Year (April 2017-March 2018): $162, Peak (June 2017-September 2017): $169; Smith Travel Research hotels and motels only [4] The listing for 13 W Haley was down at time of inventory. The rate in the table is based on an archived online listing from 2018. [5] A current room rate could not be found for 718 Castillo at the time of the inventory. The rate in the table reflects a previous rate that was found in 2018, during an earlier phase of EPS’s analysis. [6] At the time of the inventory, 812 Jennings was not actively listed for rent on any major rental sites, so it was included in the units count but not in the calculation of ADRs for STVRs. Sources: City of Santa Barbara, Smith Travel Research, Accommodation websites.

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Table 4 Inventory of Overnight Accommodations in the Coastal Zone Elsewhere in the County of Santa Barbara

Facility Name Address City Category Units People Capacity Cost Cost Percent Percent Percent Percent Percent Percent per Per Per City County State City County State Unit Night Night Year [1] Year [2] Year [3] Peak [1] Peak [2] Peak [3] Per Person Carpinteria State Beach - Hike and Bike 5361 6th St Carpinteria Campsite 150 8 1200 $10 $1 4% 5% 6% 3% 5% 6% Carpinteria State Beach - San Miguel Campground 5361 6th St Carpinteria Campsite 9 4 36 $15 $4 6% 8% 9% 5% 7% 9% Carpinteria State Beach - San Miguel & Santa Cruz Premium Loops 5361 6th St Carpinteria Campsite 9 8 72 $60 $8 24% 32% 37% 20% 27% 36% Carpinteria State Beach - Santa Rosa Premium Campground 5361 6th St Carpinteria Campsite 21 8 168 $80 $10 32% 42% 49% 26% 36% 47% Sandyland Reef Inn 4160 Via Real Carpinteria Hotels & Motels 52 2 104 $146 $73 58% 77% 90% 48% 66% 86% Holiday Inn & Suites Carpinteria 5606 Carpinteria Ave Carpinteria Hotels & Motels 108 2 216 $174 $87 69% 92% 107% 58% 79% 103% Motel 6 Carpinteria North 4200 Via Real Carpinteria Hotels & Motels 124 2 248 $206 $103 82% 109% 127% 68% 94% 122% Motel 6 Carpinteria South 5550 Carpinteria Ave Carpinteria Hotels & Motels 138 2 276 $212 $106 84% 112% 131% 70% 96% 125% Solimar Sands 4700 Sandyland Rd Carpinteria Hotels & Motels 59 4 236 $320 $80 127% 169% 198% 106% 145% 189% Best Western Carpinteria Inn 4558 Carpinteria Ave Carpinteria Hotels & Motels 143 4 572 $331 $83 131% 175% 204% 110% 150% 196% Channel Islands - Santa Rosa Backcountry N/A Channel Islands Campsite 15 5 75 $15 $3 6% 8% 9% 5% 7% 9% Channel Islands - Santa Cruz Del Norte Backcountry N/A Channel Islands Campsite 4 4 16 $15 $4 6% 8% 9% 5% 7% 9% Channel Islands - Anacapa Campground N/A Channel Islands Campsite 7 4 28 $15 $4 6% 8% 9% 5% 7% 9% Channel Islands - Santa Cruz Scorpion Group N/A Channel Islands Campsite 6 15 90 $40 $3 16% 21% 25% 13% 18% 24% Channel Islands - Anacapa, San Miguel, Santa Cruz Standard Loops N/A Channel Islands Campsite 72 8 576 $45 $6 18% 24% 28% 15% 20% 27% Channel Islands - San Miguel & Santa Rosa Premium Loops N/A Channel Islands Campsite 79 8 632 $70 $9 28% 37% 43% 23% 32% 41% Channel Islands - Anacapa & Santa Cruz Group N/A Channel Islands Campsite 5 25 125 $180 $7 71% 95% 111% 60% 82% 107% Bacara Resort & Spa 8301 Hollister Ave Goleta Hotels & Motels 358 4 1432 $1,072 $268 425% 567% 662% 355% 487% 634% Four Seasons Resort The Biltmore Santa Barbara 1260 Channel Dr Montecito Hotels & Motels 207 2 414 $1,470 $735 583% 778% 907% 487% 668% 870% Summerland Inn 2161 Ortega Hill Rd Summerland Hotels & Motels 9 4 36 $187 $47 74% 99% 115% 62% 85% 111% Inn on Summer Hill 2520 Lillie Ave Summerland Hotels & Motels 16 2 32 $465 $233 185% 246% 287% 154% 211% 275% Refugio State Beach - Hike and Bike 10 Refugio Beach Road Unincorporated County Campsite 60 8 480 $10 $1 4% 5% 6% 3% 5% 6% Gaviota State Park - Hike and Bike 17200 Calle Mariposa Reina Unincorporated County Campsite 39 8 312 $10 $1 4% 5% 6% 3% 5% 6% Jalama Beach County Park - RV & Campsites N/A Unincorporated County Campsite 107 8 856 $30 $4 12% 16% 19% 10% 14% 18% Refugio State Beach - Cabrillo Drake Ortega 10 Refugio Beach Rd Unincorporated County Campsite 9 8 72 $35 $4 14% 19% 22% 12% 16% 21% El Capital State Beach - RV N/A Unincorporated County Campsite 9 8 72 $35 $4 14% 19% 22% 12% 16% 21% El Capitan State Beach - Campsites N/A Unincorporated County Campsite 119 8 952 $45 $6 18% 24% 28% 15% 20% 27% Gaviota State Park - Campground 17200 Calle Mariposa Reina Unincorporated County Campsite 38 8 304 $45 $6 18% 24% 28% 15% 20% 27% El Capitan Canyon - Ocean Mesa Campground N/A Unincorporated County Campsite 20 6 120 $70 $12 28% 37% 43% 23% 32% 41% Jalama Beach County Park - Cabins N/A Unincorporated County Campsite 7 4 28 $150 $38 60% 79% 93% 50% 68% 89% El Capital State Beach - Group Standard N/A Unincorporated County Campsite 2 35 70 $225 $6 89% 119% 139% 75% 102% 133% El Capitan Canyon - Cabins N/A Unincorporated County Campsite 14 4 56 $250 $63 99% 132% 154% 83% 114% 148%

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Table 4 Inventory of Overnight Accommodations in the Coastal Zone Elsewhere in the County of Santa Barbara

[1] Citywide average Year (April 2017-March 2018): $252, Peak (June 2017-September 2017): $302; Smith Travel Research hotels and motels only

[2] Countywide average Year (April 2017-March 2018): $189, Peak (June 2017-September 2017): $220; Smith Travel Research hotels and motels only

[3] Statewide average Year (April 2017-March 2018): $162, Peak (June 2017-September 2017): $169; Smith Travel Research hotels and motels only

Sources: City of Santa Barbara, California Coastal Commission, Smith Travel Research, Accommodation websites.

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APPENDIX B:

Lower-Cost Overnight Accommodations Mitigation In-Lieu Fee Program Approach

LOWER-COST OVERNIGHT ACCOMMODATIONS MITIGATION IN- LIEU FEE PROGRAM APPROACH

This appendix describes potential methodologies that the City of Santa Barbara could employ to implement an in-lieu fee program to mitigate the impacts of new accommodations development and support the provision of lower-cost overnight accommodations (LCOAs). It draws from California Coastal Commission (CCC) reports and fee programs currently established in other coastal cities; and includes the implementation steps needed to establish the program.

CCC Recommended Mitigation Program Parameters

In its workshop report dated October 26, 2016, the CCC provided recommended approaches for mitigation programs that would protect, produce, and preserve LCOA in the Coastal Zone. The recommended parameters addressed both existing and new hotel developments, and are as follows:

1) New development that eliminates existing LCOA units should either be denied, or required to replace eliminated units at a 1:1 ratio, either with in-kind replacement or an in-lieu fee. 2) New high-cost accommodation developments should provide at least 25 percent of new units as lower-cost, either on-site or through payment of a corresponding in-lieu fee. 3) New moderate-cost accommodation developments should provide a portion of new units as lower-cost, either on-site or through payment of a corresponding in-lieu fee, at a lower proportion than required for high-cost accommodation developments. This proportion is calculated by dividing the proposed room rate for the moderate-cost units by the area’s high-cost threshold, and multiplying that percentage by 25 percent.

The CCC additionally recommends that in-lieu fees should be charged in perpetuity, in order to support not only the production of new LCOA units, but also their ongoing operations and maintenance. The initial fee amount would cover the costs of construction, while subsequent fees would be charged to cover operations and maintenance. The recommendation suggests the fees be charged for a period of 20-30 years, after which time the fee-paying development would be reassessed to determine if it is still high or moderate-cost—and therefore would continue to pay in-lieu fees—or if it had become a lower-cost accommodation, in which case it would cease to pay the fees.

For previous LCPs—as seen in the case studies below—the CCC had recommended a base in-lieu fee of $30,000 per room, to be adjusted annually for inflation. This fee number was based on estimates for new hostel development provided to the CCC by Hosteling International in 2007. However, in its recent workshop series on LCOA, the CCC expressed that this fee—even as adjusted for inflation—is likely inadequate to account for the true cost of developing LCOA units, particularly new lower-cost hotel rooms (as opposed to new hostel beds). The CCC committed to revisiting its approach to calculating the in-lieu fee, based on a broader set of factors impacting the cost of developing LCOA units. However, since the 2016 workshop, a new recommended fee has not been set. Recent recommendations for Land Use Plan (LUP) amendments related to the calculation of in-lieu fees have suggested that cities should calculate the fees based on financial feasibility analyses for developing lower-cost units that are specific to local market conditions. Appendix B Lower-Cost Overnight Accommodations Mitigation In-Lieu Fee Program Approach Page 2

LCOA Mitigation In- Lieu Fee Case Studies

In addition to production of LCOA units and/or payment of in-lieu fees triggered by individual CDP negotiations with the CCC, several coastal cities have generated funds through the implementation of an in-lieu fee program which applies to all future hotel development in the coastal zone. The following are three examples of cities with such programs:

Cities of Ventura and Redondo Beach

In 2010, the cities of Ventura and Redondo Beach both amended their LUPs to establish an in- lieu fee requirement for development in the coastal zone that demolishes existing LCOA or includes high-cost overnight visitor accommodations. The programs contain the following elements:

• The fee was set at $30,000 per room for which mitigation is required (per CCC guidance), with a provision for the fee to be adjusted annually to account for inflation based on the nationwide Consumer Price Index (CPI). • The in-lieu fee is waived if the rooms for which the fee is required are replaced with new LCOA units. • The number of rooms for which the fee is paid is equal to the number of LCOA units that are demolished, as well as 25 percent of the total number of high-cost or limited-use (i.e. time-share) overnight visitor accommodations units to be developed.

Both cities set the low-cost threshold at 75 percent of statewide ADR, and high-cost threshold at 125 percent of statewide ADR, which aligns with earlier CCC guidance on cost thresholds.

City of Santa Monica

The City of Santa Monica established its in-lieu fee for low-cost lodging (LCL) mitigation in 1990. The fee is levied on a per room basis for projects that eliminate existing LCL units, whether through demolition or rehabilitation, and do not replace those rooms on a one-to-one basis. It is not levied on new developments that do not directly impact existing LCL units.

The fee, originally set at $8,000 and adjusted annually for inflation, was calculated based on a financial feasibility model that tested the costs and revenues of a prototypical low-cost hotel development in the City. The fee represented the per unit financial gap that resulted from setting the room rates at a lower-cost threshold in the feasibility model—a similar approach to the one currently recommended by the CCC. The City is in the process of updating its fee to better account for current local market conditions.

The fees collected in the City of Santa Monica have been utilized to support the development and later expansions of a Hosteling International youth hostel near the coast in the Downtown area.

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Recommended Parameters for Santa Barbara

Based on review of the CCC guidance, existing programs in other cities, and discussion with City staff, EPS recommends the following elements for a LCOA mitigation program:

• The elimination of existing LCOA units should be avoided as much as possible.

• All development of new overnight accommodations in the Coastal Zone, regardless of whether or not they eliminate existing LCOA, will be required to pay an in-lieu fee. o Development of accommodation types categorized by the CCC as lower-cost, including hostels owned and operated by a non-profit organization, boat slips, RV parks, and campgrounds, will be exempt from the fee.

• The maximum allowable in-lieu fee amount will be calculated based on an analysis of the financial feasibility of developing new LCOA units, utilizing the lower-cost threshold of an average daily rate of $167 per unit. The maximum fee will be equivalent to any calculated financial gap. The City might consider approval of a fee below the maximum to the extent that other incentives can be brought to bear. An appropriate cost index, such as the Consumer Price Index (CPI) or Building Cost Index (BCI), will be used to calculate annual escalation of the fee.

• The fee level to be charged on any specific new overnight accommodation development will be determined based on certain attributes of the project, in order to account for differences in hotel category and potential room rates. Potential attributes that may be analyzed to determine the fee include: o Project improvement cost, with the fee being calculated as a percent of costs o Project amenities (i.e. on-site restaurant, spa facilities, conference facilities), with the fee being tiered based on level of amenities provided o Project size, with the fee being calculated on a per square foot basis

When establishing the in-lieu fee program, the City will define the set of attributes which will be used to determine the fee level for new developments.

Mitigation Program Implementation Steps

As described above, it is recommended that the maximum allowable in-lieu fee for the lower-cost overnight accommodation mitigation program be established based on the local market conditions impacting development in Santa Barbara. In the report from its 2016 workshop, the CCC details a variety of factors that can be considered when determining the cost of developing LCOA units. These include:

“1) Planning, engineering, design and permitting work; 2) Infrastructure development, including water and sewer; 3) Site preparation, including earthwork and drainage improvements; 4) Cost to acquire land, if necessary, to complete the project; 5) Construction costs for all required buildings, including restroom buildings; 6) Fire protection and associated improvements; 7) Access roads; 8) ADA requirements; 9) Habitat restoration, if required; 10) Administrative costs for the fee holder.” \\EgnyteDrive\epsys\Shared\Projects\LA\184000s\184004-Santa Barbara LCOA\Deliverables\Appendix B - Mitigation Program Approach - Revised Draft.docx Appendix B Lower-Cost Overnight Accommodations Mitigation In-Lieu Fee Program Approach Page 4

EPS recommends that this calculation can be made in through a hotel development financial feasibility analysis, similar to the process used in Santa Monica. The feasibility analysis would create a model which compares the costs of developing a prototypical lower-cost hotel development (including but not limited to the cost categories listed above) with the resulting project value based on the present value of projected net operating income over time. Given the likelihood that total project costs will exceed project value, this analysis will estimate a financial gap and/or subsidy need for a typical LCOA facility. The in-lieu fee would be structured to help bridge this financial gap. The inputs for the financial feasibility analysis can be based on input from local hotel developers and operators, readily available market data, and other sources (as well as the professional expertise of consultants retained to conduct the analysis).

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APPENDIX C:

CDP Conditions and LCP Policies Related to LCOA

CDP AND LCP POLICIES RELATED TO LCOA

CCC Permit Conditions for Lower Cost Overnight Accommodations

New and redeveloped hotel/motel projects throughout California’s Coastal Zone have been subject to various LCOA-related Coastal Development Permit (CDP) conditions imposed by the CCC. These conditions include designating a certain number of units at lower rates all or part of the year (these units must be open and available to the general public), mitigation fees per unit for new higher cost accommodations, or mitigation fees per unit as in-kind replacement for LCOA units lost to demolition. According to the staff reports, for on-and off-site mitigation, the CCC typically requires 25% of the proposed rooms to be designated at a lower cost. Mitigation fees are typically imposed on 100% of the LCOA lost and 25% of the new high cost rooms where no lower cost alternatives are provided on-site. Mitigation fee costs have ranged from $30,000 per unit to $100,000 per unit. In some cases, the CCC has approved significant public access amenities instead of or in addition to fees or on-site lower cost rooms.

Morro Bay (undergoing LCP update)

Low-cost threshold for Morro Bay determined by CCC as $145 and below, 15% below July 2016 statewide average.

On the Bayfront, CDP approved 2019 (3-19-0011). Demolish an existing two-story building and construct a new mixed-use building with eight-unit hotel on the second floor. The site is a tideland property where the CCC retains permitting jurisdiction.

LCOA Conditions: One room would be low cost and one would be offered at or below the low cost threshold for 240 days a year. CCC typically requires 25% of proposed rooms to be lower cost but in this case accepted 20% mitigation because Morro Bay already has a high stock of lower-cost overnight accommodations, the project site is small, and the project provides other substantial public access benefits.

On the Bayfront, CDP approved 2018 (3-17-0581): Conversion of an existing restaurant to a 10-unit boutique hotel. The site is a tideland property where the CCC retains permitting jurisdiction.

LCOA Conditions: Two of the smaller units are designated at rates equal to the area’s low-cost threshold of $145. Both room rates could be increased at no more than the CPI each year without needing a CDP amendment. All rooms must be open and available to the general public and annual monitoring reports are required. CCC typically requires 25% of proposed rooms to be lower cost, but in this case accepted 20% due to other substantial public access amenities.

Front Street Cottages, CDP approved 2017 (3-16-0287). The project is a two-story, 5,325- square-foot, six-unit hotel on a vacant lot. The site is within the CCC’s retained CDP jurisdiction area. Appendix C CDP and LCP Policies Related to LCOA Page 2 LCOA Conditions: Two of the 6 units are designated at lower-cost rates as follows: one room at $100 off-peak rate and $139 peak rate and the other at $100 from January 1 – June 30 each year. Both room rates could be increased at no more than the CPI each year without needing a CDP amendment. CCC considers this formula consistent with the typical requirement of 25% of the proposed rooms at lower cost. All rooms must be open and available to the general public.

Newport Beach (Coastal LUP update certified in 2013)

Lido House Hotel, CDP permit amendment approved 2017 (5-14-1785-A1). Demolish existing structure and construct new, four-story 130-room hotel with meeting space, retail, restaurants, pool and recreation area, and a roof top bar. Amendment expanded square footage but no change to the number of hotel rooms. LCP was not certified when the original permit was issued, but the amendment is subject to the certified LCP.

LCOA Conditions: The developer was charged a fee of $42,120 per unit for 25% percent (32 units) of the total number of high-cost overnight accommodations (130 high cost hotel rooms) in the approved project, plus a 5% administrative fee for a total of $1,415,232 in lieu of providing LCOA units on site. The fee shall be deposited into an interest-bearing account and managed by the City, Coastal Conservancy, Hostelling International USA, CA Dept. of Parks and Recreation, or similar entity to provide LCOA such as RV park sites, hostel beds, tent campsites, cabins, etc., in conjunction with an outdoor youth educational program within the vicinity of Newport Beach or greater Orange County. The City may receive some or all of the funds if they establish a program to use the funds in conjunction with the outdoor youth educational program including providing multi-night stays for children from Title 1 schools in inland areas who may not otherwise have opportunities for coastal access and overnight visits to the beach.

Santa Monica (Land Use Plan portion certified in 1992, no certified IP).

Shore Hotel, project approval continued May 2019 (5-18-0872). After-the-fact approval of demolition of two separate motels with a total of 72 lower-cost rooms and construction of a new 164-room high-cost overnight accommodation with restaurant/bar and retail uses.

LCOA Conditions: This is a complicated project with a long history since 2008. The 2019 permit application applies an in lieu mitigation fee to compensate for the loss of 72 rooms and failure to provide 25% of new rooms at lower-cost rates. The mitigation fee for in-kind replacement of the 72 lost rooms is $100,000 per room. The mitigation fee for the new hotel was calculated at 23 rooms at $100,000 per room. The total $9.5 million in-lieu fee shall be used to provide funding to public agencies or non-profit organizations for the provision of LCOA within or in close proximity of the coastal zone. Note the $100,000 mitigation fee per room was based on CCC’s consultant report from 2015.

San Diego Port (Port Master Plan, undergoing comprehensive update)

Port of San Diego Harbor Island Redevelopment: The project included amending the Port Master Plan for three hotels totaling 500 rooms. The CCC twice rejected the amendment, in part because the existing Port Master Plan LCOA policies resulted in only 3% LCOA (237 RV sites). After legal appeals, the court upheld the CCC’s rejection of the Port Master Plan amendment. The Port Appendix C CDP and LCP Policies Related to LCOA Page 3 Master Plan is currently undergoing a comprehensive update and in January 2019, the Port issued an RFP for a firm to develop and/or operate new lower cost overnight accommodations, including, but not limited to a hostel, budget hotel, pod hotel or other budget-friendly LCOAs.

Cayucos – San Luis Obispo County (LCP certified in 1988, no major update at this time)

Del Mar Hotel, CDP granted by the County and appealed to the CCC, permit denied in 2018 due to concerns about community character. Subdivision and construction of 19-room hotel. None of the rooms qualify as low-cost but the CCC found that no in-kind or in-lieu mitigation is required because the project provides a unique offering of mostly medium/moderate cost one- and two-bedroom rooms that can accommodate families and other groups on a site and in an area where such accommodations are not currently available. In addition, the project does not displace existing LCOA.

Laguna Beach (LCP certified in 1993)

Laguna Beach Golf and Bungalow Village, CDP originally approved in 2014, then appealed to the CCC and approved in 2015 with conditions (A-5-LGB-14-0034). Expansion and remodel of former 64-room hotel to remove kitchens from all units, decrease the square footage of 32 units, and add 33 new higher cost rooms. The project was also deemed to have significant impacts on existing public access and recreational facilities in the area. As a result, all of the units are now considered higher cost.

LCOA Conditions: A Shuttle Access Program and Management Plan, dedication of a public trail easement, provision of limited group camping for non-profit youth organizations at a Scout Camp on the property, and in-lieu fees calculated at $33,970 per room applied to the loss of 64 affordable rooms plus 25% of new higher cost rooms for a total of approximately $1.1 million dollars, used to establish LCOA at appropriate locations within Orange County’s Coastal Zone, with priority to locations within the City of Laguna Beach.

Appendix C CDP and LCP Policies Related to LCOA Page 4 Recent CCC Certified or Draft Pending Certification L CP LCOA Policies

A number of jurisdictions are currently updating their LCPs (Land Use Plans and/or Implementation Plans), due in part to the CCC’s five rounds of LCP Grant Program funds available since 2013. All LCP policies and implementation plans must be consistent with Coastal Act Section 30213, which simply states (in part) “Lower cost visitor and recreational facilities shall be protected, encouraged, and, where feasible, provided.” Recently revised LCPs tend to further the Coastal Act’s direction by including policies and procedures for defining lower, moderate, and higher cost and including mitigation programs for higher cost LCOAs.

San Clemente Land Use Plan CCC Certified 2016

LU-44 Overnight Accommodations. Protect, encourage and, where feasible, provide lower cost overnight accommodations in the Coastal Zone, including the possibility of a youth or elder hostel.

LU-45 Lower and Moderate Cost Opportunities. Prohibit the loss of existing lower cost facilities, including lower cost hotel, motel or inn units, or campsites, unless they are replaced with comparable facilities, mitigation, or in-lieu fees are provided.

LU-46 Priority Use. Prioritize visitor-serving commercial and/or recreation uses over private residential or general commercial development in the VSCD Overlay. The Overlay protects existing visitor-serving uses and prevents the conversion of existing visitor-serving development to other uses.

LU-47 Affordability Classification. Prior to approval of new development involving overnight accommodations, establish a classification method to define whether a facility providing overnight accommodations is lower, moderate, or higher cost within the San Clemente hotel submarket. Classification criteria may include Average Daily Rate (ADR) during peak summer season and per person value.

LU-48 Range of Pricing. Encourage new overnight visitor accommodation developments to provide a range of rooms and room prices in order to serve all income ranges. Consistent with Section 30213 of the Coastal Act, the City shall in no event (1) require that overnight room rental be fixed at an amount certain for any privately owned and operated hotel, motel, or other similar visitor-serving facility located on either public or private land; nor (2) establish or approve any method for the identification of low or moderate income persons for the purpose of determining eligibility for overnight room rentals in any such facilities.

LU-49 Protection of Overnight Accommodations Stock. Discourage reduction in total stock of overnight accommodations in existence as of the effective date of adoption of this Land Use Plan. Based on the City’s 2015 inventory shown in Table 2.2, there are nine hotels/motels in the City’s coastal zone providing 278 rooms and 160 campsites.

LU-50 Conversion. Any hotel/motel rooms for which a certificate of occupancy has been issued on or before the effective date of adoption of this Land Use Plan shall not be permitted to convert to a limited use overnight visitor accommodation unless mitigation or in-lieu fees are provided. Appendix C CDP and LCP Policies Related to LCOA Page 5 LU-51 Timeshares (Fractional/Limited Use) Accommodations. Discourage new timeshare or limited-use overnight accommodations in areas designated for hotel/motels uses meant to serve as a priority visitor-serving commercial uses.

LU-52 Mitigation for Higher Cost Overnight Accommodations. In the Implementation Plan establish an in-lieu fee program and/or a method to mitigate potential impacts of new higher cost overnight accommodations on San Clemente’s lower cost visitor-serving accommodations to ensure that a balance of overnight accommodations types at various price points continue to be provided. Mitigation may include creation of new lower cost accommodations or contribution to an account used to fund the creation or protection of lower cost accommodations within the San Clemente coastal area. Priority shall be given to mitigation proposals providing lower cost overnight accommodations to organized youth programs.

Pacific Grove Draft Land Use Plan November 2018, pending CCC certification

PRA-11 Lower cost visitor-serving facilities, including overnight accommodations and public recreational opportunities, shall be provided and encouraged. Existing lower-cost accommodations shall be protected and maintained.

PRA- 12 New development shall avoid adverse impacts to the availability and provision of lower and moderate cost visitor accommodations in the City. If new development would result in a decrease in the available supply of existing lower cost visitor accommodations, or would fail to provide a range of affordability, or fail to use land suitable for lower cost accommodations for that purpose, mitigation shall be required as determined by a project-specific impact analysis.

PRA-13 Short term vacation rentals are considered a lower cost visitor accommodation and are permitted in the coastal zone so long as such rentals do not adversely impact coastal resources or unduly burden residential neighborhoods.

Pacific Grove Draft Implementation Plan November 2018, pending CCC certification

C. Lower-Cost Visitor Accommodations. Protection of Low Cost Visitor Accommodations.

1. Low, Moderate, and High Cost Visitor Accommodations Defined. For purposes of this subsection, visitor accommodations shall be defined as low, moderate, or high cost as follows:

a. Low Cost. The average daily room rate of all economy hotels and motels in the City that have room rates that are below the Statewide average daily room rate or lower. Economy hotels and motels are AAA-rated one or two diamond hotels, or equivalent.

b. Moderate Cost. The average daily room rate is between low cost and high cost.

c. High Cost. The average daily room rate is one hundred twenty (120) percent of the Statewide average daily room rate or greater.

2. Feasibility Analysis Required. An analysis of the feasibility of providing lower cost visitor accommodations shall be required for any application involving the expansion, reduction, redevelopment, demolition, conversion, closure, or cessation of any project involving visitor overnight accommodations, with the exception of short-term rental lodging. If the proposed rates are not lower cost, the feasibility study shall explain why providing lower cost accommodations as part of the project is not feasible. This explanation shall address: the land value; development Appendix C CDP and LCP Policies Related to LCOA Page 6 costs; a breakdown of the estimated annual revenues (including average daily rate and occupancy rates); a breakdown of the estimated operating costs; and any other information necessary to address the feasibility of providing lower cost accommodations on site. The feasibility analysis shall be prepared at the applicant’s expense.

3. Impact Analysis Required. An analysis of a development’s impact on the availability of lower cost overnight visitor accommodations in the City shall be required for any application involving:

a. The expansion, reduction, redevelopment, demolition, conversion, closure, or cessation of any project involving overnight visitor accommodations, with the exception of short- term lodging; or

b. New or limited use overnight visitor accommodations. The impact analysis shall be prepared at the applicant’s expense.

4. Impact Defined. The proposed development would result in a significant decrease in the available supply of existing lower cost visitor accommodations, or would fail to provide a reasonable range of affordability, or fail to use land suitable for lower cost accommodations for that purpose.

5. Mitigation. If the review authority determines that the development will impact existing lower cost visitor-serving accommodations, or provide only high or moderate cost visitor accommodations or limited use overnight visitor accommodations such as timeshares, fractional ownership and condominium-hotels, then mitigation commensurate with the impact shall be provided by one of more or the following:

a. Replacement of low cost rooms lost shall be provided at a one-to-one ratio either on site or a suitable off-site location within the City;

b. Payment of an in-lieu fee commensurate with the impact shall be required;

c. Programmatic components that provide low cost overnight accommodations; or

d. Other form of mitigation addressing cost of stay. The review authority may authorize deviations from development standards that provide economic incentives to the development to maintain affordability.

6. In-Lieu Fee Program. Specific detailed information regarding calculation and use of any required in-lieu fees as part of a mitigation program shall be included as a condition of approval of the Coastal Development Permit for the visitor accommodations.

7. Rate Control and Income Eligibility Requirements Prohibited. In no event shall a development as mitigation be required:

a. To provide overnight room rental be fixed at an amount certain; or

b. To establish any method for the identification of low or moderate income persons for the purpose of determining eligibility for overnight room rentals in any such facilities.

8. Protection of Short-Term Rental Program (Short Term Lodging). Most short-term lodging units meet the low cost definition when maximum occupancy is taken into account. Short-term lodgings can accommodate more people than a typical hotel room. They also provide full-sized, equipped Appendix C CDP and LCP Policies Related to LCOA Page 7 kitchens allowing families or larger groups to reduce the overall cost of a visit by allowing them to prepare meals as an alternative to dining out. The City may continue to permit short-term lodgings as a means of providing lower cost overnight visitor accommodations while continuing to prevent conditions leading to increased demand for City services and adverse impacts in residential areas and coastal resources.

Santa Monica Draft LCP May 2018, pending CCC Certification

47. Lower cost visitor and recreational facilities shall be protected, encouraged, and where feasible, provided. The feasibility of retaining lower cost overnight visitor accommodations shall be considered when new development is proposed. The defining factors of what qualifies as lower cost, moderate cost, and high cost accommodations shall be contained in the IP. This policy shall not be interpreted to apply to the demolition of any residential unit in which lawfully established home-sharing or similar uses existed, or to the termination of any homesharing or similar uses.

a. Where new development proposes to replace existing lower-cost overnight visitor accommodations with moderate or high cost overnight visitor accommodations or to otherwise eliminate lower-cost overnight visitor accommodations, replacing the lower-cost overnight visitor accommodations at a one-to-one ratio or payment of an equivalent Low Cost Lodging fee shall be required.

b. Where new development proposes to eliminate existing moderate cost or market rate overnight visitor accommodations and replace with new overnight visitor accommodations, payment of the Low Cost Lodging fee shall be required in an amount to be determined in the Implementation Plan, based on a feasibility analysis.

c. As an alternative, the new development may provide low-cost overnight visitor accommodations within or in conjunction with the new development in an amount to be determined in the Implementation Plan, based upon a feasibility analysis. If on-site lowcost accommodations are provided, the Low Cost Lodging fee shall be waived. The manner of compliance with this requirement shall be made a condition of the coastal development permit. Any fee payment shall be deposited into a fund established by the City which shall be in an interest bearing account and shall only be used for the provision of new lower-cost overnight visitor accommodations. Funds may be used for activities including land acquisition, construction, and/or renovation that will result in new or expanded lower-cost overnight visitor accommodations. The accommodations funded by the Low Cost Lodging fee program shall be offered to the general public at lower-cost rates and shall be protected by the City as lower cost overnight visitor accommodations for a period to be determined in the Implementation Plan.

48. Consistent with existing law, the City authorizes home-sharing in all Coastal Zone sub-areas that permit residential use as a form of visitor-serving accommodation. The City is committed to implementing its existing policies to preserve residential housing stock and meet State Coastal Act intent to protect, encourage and, where feasible, provide lower cost visitor accommodations.

Hermosa Beach Draft LCP/General Plan Adopted by the City 2017, pending submittal to CCC Appendix C CDP and LCP Policies Related to LCOA Page 8 8.4 Existing accommodations. Protect the existing local inventory of conforming legal visitor serving accommodations in the lower and middle cost ranges.

8.5 New accommodations. Encourage visitor-serving accommodations in the Recreational Commercial land use designation, and encourage new hotel/motel development throughout commercially zoned portions of the planning area to provide a range of room types, sizes, and prices that serve a variety of income ranges.

8.6 Amenities. Require new higher cost hotel and motel development projects to incorporate non-overnight facilities and amenities as a component of the development that are generally available for passive public use.

Imperial Beach LCP/General Plan Final Draft March 2019, pending submittal to CCC

2.5.2 Protect, encourage, and, where feasible, provide lower cost visitor and recreational facilities. Developments providing public recreational opportunities are preferred.

2.5.3 Support economic vitality by protecting existing visitor serving uses, and encouraging new visitor-serving facilities on underutilized property.

a. Provide land use areas and actively pursue additional visitor-serving (tourist-oriented businesses) uses such as hotels/motels, entertainment attractions, restaurants, and shopping along the beachfront, San Diego Bayfront and inland areas.

b. Encourage visitor-serving retail uses in all commercial land use designations.

c. Prioritize development of visitor-serving and commercial recreational facilities designed to enhance public opportunities for coastal recreation in the Seacoast Corridor and along Palm Avenue over other residential or non-residential development. The ocean, beach, and the land immediately adjacent to the coastline are an irreplaceable natural resource to be enjoyed by the entire City and region.

d. Identify Visitor Serving Commercial uses as a permitted or conditionally permitted use with designated commercial zones.

e. Enhance the pedestrian experience of visitors and residents by improving clean-up services in tidelands areas, widening sidewalks where possible and improving pedestrian lighting.

2.5.4 Enhance coastal access and recreation through creation of an ecotourism/recreational corridor along the Imperial Beach Bayfront incorporating bicycle and pedestrian paths and complementary uses. See also the Mobility Element; the Conservation and Ecotourism Element; and the Parks, Recreation, and Coastal Access Element for supportive policies.

2.5.5 Encourage new overnight accommodation development within the City, where feasible, to provide a range of room types, sizes, and room prices in order to serve a variety of income ranges.

a. Permit short-term vacation rentals in all commercial land use designations.

2.5.6 Protect the character and integrity of residential neighborhoods by prohibiting rentals of less than 30 days in all residential land use designations.