Santa Barbara council approves adaptive reuse ordinance for downtown, directs staff to study sliding in-lieu fees

The Santa Barbara City Council on Oct. 14 unanimously approved an adaptive reuse ordinance aimed at encouraging conversion of underused commercial buildings into housing downtown and directed staff to return with an analysis of a sliding in-lieu fee for inclusionary requirements.

The ordinance, introduced by staff and sponsored as a council item, adds a new section to the Santa Barbara Municipal Code establishing regulations for adaptive reuse projects. The council’s action preserves inclusionary housing requirements for most projects while exempting rental adaptive-reuse projects in the Central Business District (CBD) that propose fewer than 40 new residential units. Council also endorsed staff’s recommended maximum average unit sizes and asked staff to study stormwater management and other compliance pathways to increase downtown housing.

Why it matters: downtown Santa Barbara has seen rising commercial vacancy and limited options for adding housing without altering the city’s historic fabric. The ordinance is intended to preserve building character, reduce construction waste and lower conversion costs by allowing ministerial approvals when projects remain within existing building envelopes, reduce parking requirements and waive some discretionary hearings. Proponents say the incentives will make conversion to housing financially feasible; opponents warned that removing inclusionary requirements for smaller projects could reduce funding for deed-restricted affordable homes.

Council discussion and details

Dana Falk, the city’s long-range project planner, presented the ordinance and the staff recommendation. Falk said staff analyzed 19 example change‑of‑use projects filed since…