Experts Debate if Miami Beach Has Proper Legal Authority to Enforce Strict Regulations on Short-Term Rentals

MIAMI BEACH, Fla., July 14, 2016 /PRNewswire/ -- In a city with a local population of only 90k, but millions of annual visitors, there becomes an obvious issue regarding short-term lodging in Miami Beach.  Despite several thousand new hotel rooms added in the past years, the available vacation rental accommodations are severally limited by current city-wide regulations against leasing properties for periods less than 6 months at a time.

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Given the fact that technological advancements are enabling property owners unprecedented access to potential renters, coupled with the fact that public demand for short-term rental options is at an all-time high, the demand for regulation reform has reached a boiling point.

Under current Miami Beach regulations, owners who are looking to defray property ownership costs by renting their properties short-term are left with no alternative than to go against what Miami Beach has declared 'law.' The consequences for this practice are exorbitant fines, which opponents declare do not fit the 'crime.'  The city has doled out penalties that range from $20,000 - $100,000 PER incident. 

The debate over Miami Beach's authority to enforce these regulations has many owners, residents and even real estate agents unable to agree on what is and what should be allowed.

The State of Florida statutes do have clear wording as to individual cities not having the right to prohibit vacation rentals, and its declarations clearly supersede that of local governments: 

Under §509.032(7)(a), Fla. Stat., state law preempts local law in the regulation of public lodging establishments, including vacation rentals. Under §509.032(7)(b), Fla. Stat., local governments may not prohibit vacation rentals or limit their duration or frequency.  However, local governments may regulate vacation rentals to the extent that those regulations do not (a) prohibit vacation rentals in a particular area or zone; (b) limit a vacation rental to a particular number of days; or (c) limit the number of times a unit may be rented out within a year.  These provisions apply to any local law or ordinance adopted on or after June 1, 2011.

Whether legal or not, Miami is not alone in facing this issue. Cities around the U.S. are addressing a call for regulation reform more than ever. In New York City, renters must stay 30 or more days, New Orleans renters in the French Quarter 60 or more days, Los Angeles allows owners to rent out their homes up to 90 cumulative days per year, while other cities simply limit the amount of guests and charge fees.

"Wealthy investors and property owners have evolved from the typical "snow-birds" that existed decades ago. Today's investors often keep homes in Latin America, a condo in Manhattan for business, a ski villa out West, and a winter escape in Miami," said Broker and real estate expert Ross Milroy of Ross Milroy Realty.

With the boom of online booking platforms such as Airbnb and HomeAway.com, it has become very easy to find short-term renters willing to pay for the benefits of staying in a private home as opposed to the traditional hotel.

"I have many foreign investor clients who come to town looking to purchase vacation homes, but because this is primarily a domestic regulation, they do not realize the city of Miami Beach all but bans short-term rentals," said Milroy. "I've witnessed first-hand that these regulations are driving away investors and taking potential funds out of the local economy, which the city desperately needs."

Experts and proponents like Milroy have been pushing not to abolish these laws against vacation rentals, but to simply regulate them through steps like permits, taxes and inspections, which will bring in capital to further improve the neighborhoods. Many of the rental services, like Airbnb are equipped to automatically collect the required transient taxes, resulting in additional support for the local economy.

There seems to be some changes on the horizon:  earlier this month North Beach's planning board approved an ordinance that was voted on, and approved for second reading, by the city commission to create a short-term rental district along Harding Avenue from 87th Street south to 73rd Street.

"It's obvious that times are changing, and Miami Beach is going to need to keep up," said Milroy. "Without municipalities collecting through taxes, permits and applications – without visitors staying in otherwise vacant properties and spending money in the community, Miami Beach will miss out on millions of dollars vital to the revitalization of neighborhoods that are falling behind."

SOURCE Ross Milroy Realty

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