Restoring and decorating this bed and breakfast with homey, traditional touches and modern comforts was a family affair for Hearth Homes Interiors.

The Craft House Inn Santa Barbara Exterior
Thomas J. Story

On the list of favorite local pastimes and preoccupations in Santa Barbara, from surfing to wine tasting to farm-to-table cuisine to hiking, real-estate obsessing is at the top. It’s easy to see why. People want to move there, home inventory is low, and the possibilities—street after street of charming bungalows, modern ranches, and Mediterranean mansions—are plentiful. So for a city with roughly 100,000 residents, there is an outsized, thriving community of interior designers, house flippers, remodelers, home stagers, hoteliers, and vacation-rental managers who design and build living quarters of all kinds across town.

Olivia Wahler and Katie Labourdette-Martinez Standing Outside Craft House Inn
Olivia Wahler and Katie Labourdette-Martinez of Hearth Homes.

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Then there are people like sisters-in-law Katie Labourdette-Martinez and Olivia Wahler of Hearth Homes Interiors, who manage to do all of the above, and have been actively shaping the cozy-coastal aesthetic the breezy beach town is known for on a seven-year odyssey of finding and shaping domestic diamonds in the rough.

“My husband, Lucas, Olivia’s older brother, and our family friend Jason are on the real-estate side, hunting and gathering,” says Katie. “They found the property and pitched this idea of expanding into Hearth Hospitality, branching into short-term rentals and bed and breakfasts, like The Craft House Inn.”

The Craft House Inn Santa Barbara Exterior
Deep green exterior paint with black trim (Benjamin Moore 2132-10) feels both historically accurate and modern at the same time.

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The property is a four-bedroom craftsman-style cottage plus a one-bedroom suite with a separate entrance, replete with a picket fence. Coaxing the 100-year-old cottage, which has been a functioning inn since the 1980s, into its current state was an intense labor of love, and paint scraping.

The Craft House Inn Entryway
Step into the entry, and it’s clear this isn’t a granny’s B&B. Wall color, Inchyra Blue by Farrow & Ball. Console, lamp, mirror, and accessories, all vintage. The artwork—Knuba, by Alex Kostinskyi—is from Artfully Walls.

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“A lot of the character had been painted over and hidden, and it was very crowded with furniture for no real reason,” says Katie. “It was fun to strip back everything and uncover some original details.”

Stained Glass and Wood Moldings
The Hearth Homes team spent days scraping old paint off of moldings and door frames to uncover hidden pocket doors and preserved original details like stained glass windows. Walls painted in School House White by Farrow & Ball create a simple background that allows bolder greens and blues to pop.

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“We got really lucky with those little design elements, like the door hardware, the moldings, and the archway details that we could refurbish and use within the design,” says Olivia. “We prioritized the character of the home while also bringing it into the modern day.”

The Craft House Inn en-Suite Bath
In the Granada room’s en-suite, a dresser salvaged from the property functions as a vanity, with a black vessel sink sourced from Etsy.

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Vintage dressers they found on the property were transformed into bathroom vanities. A small swath of wallpaper original to the house was framed and treated like a little piece of art. The extended Martinez clan often travels as a group, frequently renting homes so they can be together in common living spaces and relax, and build core family memories together. So they’d already established a list of priorities.

The Craft House Inn Living Room
The living room has a cozy, residential feel, with a neutral palette to let the craftsman woodwork shine. Bacio bouclé sofa, CB2. Kenan leather chairs, Wayfair. A Samsung Frame TV hangs over the fireplace, painted Louisburg Green by Benjamin Moore. Alva wall sconces, Hudson Valley Lighting.

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“We want people to feel like they’re walking into their own home, but also create some ‘wow’ moments that felt fun and playful that people will remember, like wallpapering an entire room, including the ceiling,” says Katie.

Zeus wallpaper by House of Hackney in tobacco color features graceful cranes and willows and is a formidable match for the wood paneling.

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It’s furnished so much like a well-appointed home that the only giveaways that it’s not a private residence are the discreet numbers on the four en-suite bedroom doors. The more traditional furnishings are balanced with art and treasures that feel a little more irreverent.

The Craft House Inn Lotus Suite Bedroom
In the Lotus suite, a Benbrook spindle bed from Birch Lane, Studio McGee ottomans from Target, and a generous window seat make for a cozy retreat.

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“There are so many great hotel options in town, so we knew we wanted to create something that felt really different and unique,” says Olivia, adding that the home’s generous backyard set-up for entertaining makes it an appealing location for smaller weddings, reunions, or special occasions for groups of friends.

“There are places like the Hotel Californian where you can have a big, gorgeous wedding like Olivia did, or you could host it at The Craft House for something more intimate,” says Katie.

The Craft House Inn Kitchen Cabinets and Cutting Boards
Cafe appliances by GE, Calacatta Luna marble countertops, Bedrosian subway tile, and custom cabinets upgrade the shared kitchen.

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It’s a bonus that the third Martinez sibling, Julian, is the executive chef at Barbareño, a critically acclaimed restaurant in town. Julian’s contribution to the family’s budding hospitality business is a chef’s breakfast spread with fresh-baked pastries, eggs, and farmer’s market produce that launches the second B of B&B into the stratosphere (and the catering team is available for events, too).

Outdoor Entertaining at The Craft House Inn in Santa Barbara
The backyard is generous enough to host small weddings and outdoor gatherings. Slope indoor/outdoor dining chairs, West Elm. Northmont dining table, Target.

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The next project on deck is a recently acquired nine-bedroom inn around the corner from The Craft House, which is mid-remodel and scheduled to open in 2024. Between that project, their residential work for clients, and managing three other homes in the Hearth Hospitality collection, the duo has found little time to finish their own homes, which are both more contemporary than the inn.

“It’s so much harder to make decisions for yourself than it is to make decisions for clients,” says Olivia.

“That’s how it always works, right?” Katie says. “I am my own worst client.”