Tenants Fight Displacement in Santa Barbara’s West Beach Neighborhood

Tenants Fight Displacement in Santa Barbara’s
West Beach Neighborhood

How a 52-Unit Apartment Complex in a
Sleepy Neighborhood Became a Spark Point
in the City’s Housing Crisis

By Ryan P. Cruz | April 4, 2024

The last remaining tenants at a once-bustling 52-unit apartment complex in Santa Barbara’s West Beach neighborhood are exhausted. The past few months have been a dizzying blur of termination notices, construction, service shutoffs, and contentious email correspondence with the property’s new ownership group. 

In a span of six months, the diverse community that lived in the ivy-covered apartments at 215 Bath Street — city workers, artists, Lyft drivers, entrepreneurs, and engineers representing different cultures and age groups and income levels — had disappeared, with only a dozen units still occupied. The rest of the tenants have since moved out, scattered across the country, in the Midwest, the Deep South, the Pacific Northwest, or as far away as South America. A lucky few were able to find a place in Santa Barbara or Ventura County.

It’s an example of the housing crisis in action and of the displacement of working-class residents due to the pressurized housing market, where aging multi-unit apartment buildings with affordable rents and deferred maintenance — many of which are home to the city’s working class and young professionals — are the next big thing in the real estate game.

Displaced by Design

It happened almost overnight. A mysteriously named entity, “215 Bath LLC,” purchased the property on August 31, 2023, for $16.8 million. The next day, the new owners sent termination notices to tenants and set off a panic that spilled over into City Hall, where the tenants’ cries for help forced Councilmember Mike Jordan and the City Attorney’s Office to take a look into the situation. The first round of notices was found to be incomplete, and the city set about tightening its “just-cause,” no-fault eviction ordinance in a contentious January 2024 hearing that pitted tenants against landlords.

The ordinance changes were meant to protect residents from the alarming trend of mass “renovictions,” a tactic used by housing developers who purchase an older property and evict the current tenants by claiming the property needs substantial renovations, and then offer the units at a much higher rent to new tenants.

Now, property owners must have permits in hand before issuing notices to tenants, and the recent changes protect tenants from harassment and give them the right to return to the units after displacement, though the landlords fought against a proposed rent cap on returning tenants.

But at Bath Street, the new ownership group used a barrage of efforts to get tenants to leave voluntarily, creating a unique scenario that was not quite a renoviction, but instead a technically above-board displacement of tenants enacted by pressuring residents to leave voluntarily with offers for relocation assistance, while also creating a chaotic environment for the holdouts who refused to take a deal.

On January 31, the ownership sent another round of termination notices to the remaining residents, letting them know that their leases would not be renewed. The city issued permits for electrical and plumbing upgrades, the notices said, and all would have to vacate their units to allow the safety upgrades to be done.

Bath Tenants Unite

Throughout this process, the tenants at Bath Street have become unintentional experts in housing policy and advocates for tenants’ rights. Lisa Haworth, a nine-year Bath Street resident who works at a local bank, says her life has been turned upside down since the property was taken over by the new ownership.

“I’m on edge and stressed all the time,” Haworth said.

The new owners claim that the building’s decades-old electrical and plumbing systems pose an imminent health and safety risk, often pointing to the September 2023 electrical fire at the Beach City apartments on Cliff Drive as a reason behind displacing the current tenants. But Haworth isn’t convinced, saying that if it were a true danger, the tenants would have been forced to vacate by the Public Health department long ago. She also questioned the logic behind the supposed safety risk, given that the company’s contracted workers have been occupying the empty units.

“If it’s so dangerous, why do they have all their workers staying there?” she asked.

Corina Svacina, a marketing specialist who has lived at Bath Street for seven years, also became an accidental housing advocate, sending letters to city councilmembers and helping Haworth and other residents organize the Bath Tenants Association in attempts to engage the ownership in group negotiations after the previous property manager — a woman who had worked at the property for 22 years — was fired by the new owners.

Svacina says it has been discouraging to see the displacement of her diverse neighbors happen firsthand and pointed out that the issue is not only a matter of housing but also a race and class issue. “It’s an issue of who we allow to live and thrive in Santa Barbara,” she said. “Once the neighborhood people have left the building, who will take it over? If it’s students, they will be largely White and from out of town.”

But the Bath Tenants Association has struggled for official recognition, both at City Hall and with the new owners. In one email correspondence, the newly created tenants association sent out an open letter to invite the four owners behind 215 Bath LLC — Chris Parker, Austin Herlihy, James Knapp Jr., and Timothy Morton-Smith — to “come to the table and negotiate with us in good faith.”

“We appreciate that tenant safety is your primary concern,” stated the letter, which was also published in the Independent in February. “However, it has become clear to us that your main goal in your acquisition of this property is to replace our community with the ‘West Beach College Commons,’ a private dormitory for student tenants with shared-room rental agreements.”

In the email, the tenants association laid out several requests and made it clear that the group was made up exclusively of Bath Street residents seeking to “establish the terms of our conversation so we can resolve this conflict and avoid future ones.”

“We are doing this in good faith, in the spirit of community and fairness, and in seeking a common agreement with you as representatives and owners,” the email stated. “We are not reneging on our responsibilities as established by law and our contracts as tenants. We hope to reach a satisfactory agreement with you.”

The response from the ownership, signed only by “215 Bath LLC,” stated that they would “not discuss lease information with outside parties, particularly anonymous parties.”

The group reiterated that it was a group of tenants who “would like to negotiate as a group, not individually,” but the owners still refused, insisting that all residents contact them individually. When tenants reached out with the same concerns through individual emails, each one was sent the same exact response, word for word, from ownership claiming the property needed significant safety upgrades and offering “more generous” relocation payments if they decided to leave voluntarily.

[Click to enlarge] BEFORE/AFTER:  The once lush, green courtyard oasis is now a dusty construction zone.

Behind the Curtain

The men behind 215 Bath LLC are not newcomers to the game. Knapp has been active in multi-family real estate investment for more than a decade, founding the Koto Group and directly overseeing $30 million in renovation projects since 2012. Morton-Smith is a former boardmember of the Santa Barbara nonprofit Jodi House, real estate entrepreneur, and manager of West Beach Rental Partners, the company that partnered with 215 Bath LLC to take out a $6.5 million loan for the transaction.

Herlihy and Parker are both longtime local real estate professionals with the Radius Group, one of the Central Coast’s industry leaders in commercial brokerage. Parker, who also serves as vice president of the Hutton Parker Foundation and boardmember for the Santa Barbara Bowl, came from a construction background before joining Radius in 2010. Herlihy, the Radius Group’s executive vice president, has brokered some of the city’s largest transactions, with more than a billion dollars in transactions under his belt since joining the company in 2005. Both Parker and Herlihy are partners in the proposed 99-unit workforce housing project at the Tri-County Produce site.

Herlihy has been outspoken about the difficulties developers face in bringing housing to Santa Barbara, something he said would be made even more challenging with tenant protections starting to shift the power in favor of tenants.

“Their pendulum has swung too far, where signing a lease now means that you have more rights than the person who sacrificed to buy the real estate,” Herlihy said. “What gets lost is that as a tenant your only responsibility is to pay rent and be a good neighbor, whereas property owners are obligated to invest in keeping safe places to live, paying property taxes, paying mortgages, investing in their properties, keeping abreast of the most recent ordinances and regulations, keeping property insurance when insurers are wholesale leaving California, and dealing with the continued questions and insecurity created by reactionary ordinances that dramatically change the economics of home ownership.”

He said that the conversation over tenants’ rights will have “unintended consequences” that would create more slumlord tactics and conflicts between landlords and tenants. “This additional cost will ultimately get passed through to the tenants, as well as push mom-and-pop property owners out of business,” he added.

He also claimed to have received threats from the Santa Barbara Tenants Union (SBTU) after the group published the names and emails of all four owners prior to the January City Council hearing, along with alleging that the tenants union has “called for the end of private ownership” in Santa Barbara.

SBTU representatives told the Independent that the all-volunteer group focuses on educating tenants of their rights and strengthening protections — not on eradicating property rights — and denied any direct threats from the organization. The group also provided an example script for callers, posted on the SBTU website, asking that concerned citizens “only use a respectful tone and choice of language.”

What Happens Now?

Stanley Tzankov, a cofounder of the SBTU who has worked closely with the Legal Aid Foundation and the Bath Street tenants through the process, says that the displacement of the tenants — many of whom are paying between $1,400 and $1,900 a month in rent — is a regular practice in Santa Barbara County. And while it’s clear that local leadership is taking steps to address the problem — with tenant protections at the city and county level earning approval in recent months — there is still uncertainty with the tenants who are being forced out now.

Councilmember Jordan, the district representative who was so eager to help the tenants when he first heard of the situation in September, has since distanced himself from discussions. In response to a letter sent from the tenants asking why he balked on a cap for returning renters and a “cooling-off period” he originally proposed — which would have forced new multi-unit owners to wait at least a year after purchasing the property before displacing tenants — Jordan responded with a short email saying that the provisions were put on hold to allow other protections to move forward and that he had been “given legal advice by our attorneys to distance myself from continuing discussions with parties (tenant or owners) related to actions taking place.”

The recent additions protecting tenants from harassment also leave a lot of room for interpretation, Tzankov said. While they give tenants the legal standing to sue for harassment, it doesn’t do much to stop the “soft harassment” tactics like allowing the trash to pile up for weeks, allowing power or water to be shut off for several days, closing the public spaces where tenants gather, or leaving confusing notices in order to break down the tenants’ resolve.

“Every instance of harassment is now protected,” he said. “With enforcement, we’ll need to see, but so far we’ve seen the landlords more above board than ever since passing the protections.”

For the remaining tenants at Bath Street, the future is uncertain. Some may eventually agree to the owners’ increasing offers for relocation assistance, while others have promised to fight for their right to stay as long as they can. They have all received notices informing them that the company will not renew leases once they expire, some in May and some as late as September. 

The ownership group has been issued permits for electrical and plumbing work from the city and submitted applications for several more, and in the meantime the tenants are forced to live with frequent drop-in inspections in a complex that has turned into a dusty construction zone in recent weeks. “Peace of mind in where you live is something we used to have,” Svacina said. “They took that away.”

While new ownership has not officially announced plans for the future, several listings for units have popped up over the past several months, including a one-bedroom unit that offered a “chic urban lifestyle” at 215 Bath Street with rates of $1,550 for a shared room, $3,100 for a private room, or $6,200 for the entire apartment. 

“Any time you make changes in town, you are going to have critics,” Herlihy said, “but we firmly believe that the important health and safety upgrades that we are investing in 215 Bath are the right thing to do. Investing in the community that we live in, and investing in the safety of our housing is good for Santa Barbara.”

Correction: This story was updated to reflect that Tim Morton-Smith is no longer a member of the board for Jodi House.