David Hefner bought a three-bedroom home with a pool on Treasure Island near Clearwater for $700,000 in November as a “secondary residence” his West Virginia family would enjoy several times a year. He invested another $100,000 in improvements and renovations. “The home has everything – and it’s on the water,” he said.
Hefner said he always intended to buy a beach-area home that he could offer as vacation rental. Without subsidizing his mortgage payments with rental income, he could not afford such an investment.
His prospective neighbors were doing it. There were dozens of single-family homes in Treasure Island and surrounding areas listed on digital vacation rental sites such as Airbnb, VRBO and HomeAway, he noticed.
Hefner did so, too. Within two months, “I had 22 weeks booked,” he said.
At $3,000 a week, Hefner anticipated about $60,000 in rental income from the home.
But that money instantly disappeared in a visit from a Treasure Island code enforcement officer.
Hefner said the officer told him he was responding to an “anonymous email” alerting him that Hefner was violating the city’s short-term rental ordinance that prohibits single-family homes from being rented for any period of time more than twice a year.
The officer explained the city was responding to a rash of complaints regarding “illegal rentals” and there could be “no exception to the rule,” Hefner said.
He had to cancel his bookings and hope the proposed Vacations Rental Act was adopted by the Legislature during its 2018 session.
“Knowing that the law might change, it was a glimmer of hope,” he said, noting the digital sites all assess the state-local 13 percent sales tax, meaning he would have paid $7,800 in taxes to local and state governments.
The Vacations Rental Act – Senate Bill 1400, sponsored by Sen. Greg Steube, R-Sarasota, and House Bill 773, sponsored by Rep. Mike La Rosa, R-St. Cloud – imposed state preemption in regulating short-term rentals.
The bill proposed removing short-term vacation rentals from hotel and motel regulations, and establishing a uniform inspection program conducted by the state’s Department of Business and Professional Regulation (DBPR).
Proponents said state preemption was necessary to protect private landowners rights and unshackle the restrictions on private homeowners – such as Hefner – to participate in a growing $31 billion state short-term rental industry from a restrictive local regulation.
Opponents, including local governments and the state’s hospitality industry, argued the bill would preclude homeowners from managing their own neighborhoods, claiming it was another example of the Republican-led legislature using preemption to strip municipalities of their capacities to address street-level concerns.
SB 1400 passed the Senate Regulated Industries Committee, but never made it out the chamber’s appropriations and community affairs committees for a floor vote. HB 773 also never made it out of committee. Similar 2017 bills shared the same fates.
Proponents say the measures got lost in the time crunch after the Valentine’s Day school shooting in Parkland became a pressing priority during the last three weeks of the 60-day session that adjourned March 9.
Opponents said pressure by local government advocates and hotel industry representatives, such as the Greater Miami and The Beaches Hotel Association, made passage highly unlikely.
Nevertheless, Vacation Rental Act proponents say they will try again to get the bill introduced and passed in 2019.
Florida Vacation Rental Management Association (FLVRMA) President Jennifer Frankenstein-Harris told members that despite bills restricting local regulation of short-term rentals failed two years in a row, the fight is not over but just beginning.
“The truth is, we are only in the midst of this discussion,” she said. “As president, I personally guarantee the Florida Vacation Rental Management Association will continue to bring forth education and a fierce determination to fight for the rights of property owners across the state of Florida. I assure you this fight is far from over.”
Florida Airbnb spokesman Benjamin Breit said “it’s too early to tell” if Airbnb will again lobby for the measure, noting it will be querying November election candidates about their views on vacation rentals.
“From our post-session conversations with state lawmakers and our 45,000-plus statewide hosts, it certainly appears there is an appetite to revisit this issue in order to provide regulatory certainty for an industry that infuses hundreds of millions of dollars into Florida’s economy,” Breit said.
Indeed, the vacation rentals issue could be a state Legislature campaign issue, said Kurt Wenner, vice president for research with Florida TaxWatch.
Wenner said Florida TaxWatch has never taken a stand on the issue but may do so soon. “That is something that we are considering taking a look at,” he said. “What kind of impact it has” on local governments and on housing values.
“Is it good or bad?”
If regulatory relief does come in 2019, it will likely be too late for Hefner.
“It’s a bummer to see that the bill was not addressed during their last session,” he said. “I’m going to need to sell my home because of local city regulations.”
“In fact,” he added, “my Realtor is actually at the house now.”
Photo credit: Mark Winfrey | Shutterstock
By John Haughey | Watchdog.org