Santa Barbara Happenings - December 2020
Santa Barbara City Council Votes to Require Three Months of Tenant Relocation Assistance for No-Fault Just-Cause Evictions
On November 17, 2020, the Santa Barbara City Council voted 5-2 to adopt an ordinance requiring property owners to pay relocation costs equal to three months’ rent if an eviction is due to no fault of the tenant. As of this writing, no final ordinance has been released. The City Council plans to reexamine the ordinance in a year after more data is available. Common instances of no-fault just cause eviction occur when the property is taken off the market or the property owner wants to do a substantial remodel.
The new ordinance will not apply to duplexes, single-family homes, or accessory dwelling units. Relocation expenses will be given per unit, not per tenant.
With strict state laws already in place, more regulations are not the answer. Many property owners are already financially burdened from the loss of income due to COVID-19. More regulations will further stifle the housing market, likely decreasing the supply of rental units, negatively impacting both renters and property owners.
Goleta Union Schools Return to In-Person Learning in January...Maybe
The Goleta Union School District unanimously voted on November 4, 2020 to re-open schools 5 days a week for in-person learning starting January, 2021. The decision still gives families the option to continue virtual and flex programs. With Santa Barbara County recently reverting back to the most restrictive purple tier, the Goleta Union School District Board of Trustees plans to re-evaluate their original decision. As of this writing, no final decisions have been made as to whether or not Goleta Union still plans to open classrooms in January.
Some schools in the area, such as Montecito Union, have already successfully transitioned back to in-person learning. In contrast, Santa Barbara Unified School district chose a hybrid model beginning January 19, 2021, in which students are only allowed to come into the classroom 2 days per week (presumably because the COVID-19 virus is active the other 3 days). Goleta Union will be able to have smaller groups of 19-students and expanded outdoor tent classrooms.
The American Institute for Economic Research maintains that closing schools in the first place was a huge mistake. Not only have children lost almost a full year of quality schooling, a UK study revealed no consistent changes in risk of recorded infection and severe outcomes from COVID-19 comparing periods before and after school closures. Let’s face it: It’s important that we move away from the lockdown narrative.
A Look Into Santa Barbara’s 2020 Commercial Real Estate Sales
After a devastating second quarter of 2020, Santa Barbara County’s commercial real estate sales in the third quarter were able to recover. 2020 began with 15 sales in quarter one accounting for $39 million in dollar volume, then dropped to 9 sales in quarter two with a dollar volume of $14 million, then rose again in quarter three with 23 sales and $115 million in dollar volume. 2020 in total included 47 total sales and $169 million dollar volume. In comparison, 2019 had 58 sales and $320 million dollar volume.
Of the 47 sales, approximately 2/3 have been to owner-users, and in quarter three alone, about half of the sales were to owner-users. This reflects the uncertainty of income streams and the consequential trend of investors taking a more conservative approach. Additionally, 1/3 were for properties that were not publicly listed at the time they sold.
Despite the active State Street Promenade, the vacancy rate has continued to grow to 16.87% in quarter three. There were 9 sales for the year, with 6 of them coming from quarter three. Most sales were outside the central area, between the freeway and Micheltorena Street.
With regard to office space, Santa Barbara, Goleta, and Carpinteria have all seen a not-so-surprising rise in vacancies, after many “non-essential” businesses had to close in-person operations. The future of offices still remains unknown as businesses try to modify operations in response to COVID-19.
City Approves New Downtown Apartment Development
The City of Santa Barbara recently granted approval for the construction of 84 apartment buildings on the parking lot between Staples and Reid’s Appliances. The new tenant received a 99-year ground lease from the City of Santa Barbara for the 1.5 acres of commercial land.
Given the central location on lower State Street, these apartments will hopefully open up the current housing supply and stimulate the struggling businesses in the surrounding downtown area.
Amazon Comes to Oxnard
Amazon recently announced that a major distribution center will be opening in Oxnard next year. The distribution center will complement a larger facility located in Newbury Park. Amazon currently has many operations along the central coast, including its technology Hub in San Luis Obispo, Alexa Hub that came to Santa Barbara in January, and distribution center in Camarillo.
Amazon’s revenue has greatly benefitted from the impact COVID-19 had on the economy, specifically, the increase in online shopping. During the initial stages of the coronavirus, Amazon’s share price dropped much less than the market as a whole. On October 13, 2020, the share price closed at $3,443.63, which is more than 90% over its low point for the year. For the quarter ending on June 30, 2020, Amazon’s revenue was $88.9 billion, which is a 40% increase from the previous year. Net income and earnings per share for the second quarter also saw substantial increases.
Given the City of Oxnard’s current economic status, City Councilwoman Carmen Ramirez was hopeful that the new development will provide reliable jobs for more than 1,500 community members and pave the way for future business development in Oxnard.
Amazon also plans to open another smaller distribution center before the end of the year in Camarillo, similar to one that currently exists in Thousand Oaks.
Santa Barbara Resident to Develop New Technology
Santa Barbara resident Eli Harris is the co-founder and president of R-Zero, a new tech development focused on workplace health and safety. R-Zero uses UVC technology to emit a short form of ultraviolet light into unoccupied bathrooms, dining areas, kitchens, or any other contained space. The germicidal UVC rays kill 99.99% of existing microorganisms including viral, bacterial, or fungal. UVC technology is already being used in hospitals as a sanitizing agent and may be key to many in-person operations/businesses re-opening.
Many classrooms, sports locker rooms, and offices across the country have also been implementing this technology. Santa Barbara was one of the first places to adopt this new technology. Currently, some establishments in the Funk Zone have invested in the R-Zero disinfecting lamps.
R-Zero has integrated GPS technology to offer a tracking system in order to ensure that each desired zone was treated with UVC. R-Zero also kills the microorganisms that cause food poisoning, the flu, and even the common cold. With new products emerging in 2021, this may be the extra layer of protection needed in order for shared space to re-open with a sense of normalcy.
Apprenticeship Grows as Alternative to College
With the average American student accumulating $30,000 in college debt after graduation and most colleges requiring full tuition for online schooling, the bubble of higher education is likely to pop, or at least deflate. Many students do not need a traditional college degree in order to pursue their goals, as exemplified by the Federation for Manufacturing Education (“FAME”) Apprenticeship Program profiled by the Wall Street Journal.
Students in the FAME program, ranging from new high school grads to experienced workers, typically spend two days in class and three days in the factory, earning a part-time salary. Along with teaching factory skills, FAME teaches soft skills such as ethics and teamwork, as well as traditional subjects such as Math and English.
The program’s success is clear based on the 97% of graduates who said they made the right decision by participating. To contrast that number, 75% of humanities majors across the country said they regretted their college education, according to a 2019 study published by CBS News. Maybe COVID-19 and virtual education is the final straw that will trigger a reassessment of the current higher education system.