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Florida Is Becoming the Next Unlikely Battleground of the Sharing Economy

May 06, 2014 8:32 am

Skift Take

The move to roll back Florida’s ban on local regulation of short-term rentals demonstrates that even big vacation destinations struggle with the challenge of balancing quality of life for locals and housing options for visitors.

— Jason Clampet

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VRBO.com

Listings in Tampa, FL on vacation-rental site VRBO.com. VRBO.com


For $50, travelers can stay the night in a “cozy room” at a cottage across the street from the Gulf of Mexico and chat over breakfast with the home’s owner about the best place to watch the sunset.

At Channelside, a luxury condo overlooking Tampa Bay rents for about $200 a night, while a spacious four-bedroom home at Madeira Beach can be reserved for $400 daily.

These are a few of the options on the Airbnb website available for visitors to the Tampa area who prefer to save money or to experience an alternative to a traditional hotel room or long-term condo rental.

Listings for vacation rentals have multiplied on the Web in recent years, and their owners say they’re drawing a new market of tourists to town every week.

But more than a few permanent residents don’t feel very welcoming toward this revolving door of new people week after week in their tight-knit neighborhoods.

City leaders and area tourism officials say many of these short-term vacation pads run afoul of residential zoning rules, and some owners who post properties online may also be dodging the 12 percent sales and bed tax required on overnight stays.

Madeira Beach Commissioner Elaine Poe says an alarming number of these rentals are appearing in her own neighborhood.

After combing the Web for the past six months, she’s found that more than 1,800 rental listings in this town of about 4,000 people are being used as rentals.

She blames a 2011 state law that prohibits cities from passing rules specifically restricting short-term rentals, but the ease of advertising on the Web with little interference from zoning or tax officials also may be fueling the trend.

For Poe and other longtime beach residents, there’s more at stake than tourism.

“They’re moving in and out like we’re a Motel 6,” she said. “I’m not willing to turn my residential community into tourism dollars.”

A bill that passed last week in the Florida Legislature would restore some powers to local governments for regulating short-term stays, something property owners contend would squelch an estimated $31 billion a year spent by tourists who prefer vacation rentals.

In small waterfront communities such as Gulfport, with virtually no hotel rooms, renting homes by the week is about the only way to keep more overnight guests in town, especially in the summer, homeowners say.

The fast-growing vacation rental website Airbnb has been the subject of enthusiasm and controversy across the country in recent years.

The site offers people an easy way to put their homes, rooms or possibly just their couches up for rent online at whatever price travelers are willing to pay.

The San Francisco-based company attracted $200 million in venture-capital investment in the first quarter of 2014, the second-highest amount of all startups in the nation.

It has also run into legal trouble in New York, where the state’s attorney general claims its users are violating rules for short-term rentals and skipping out on sales taxes.

In the Tampa region, the emergence of vacation rentals in traditionally residential neighborhoods appears to be concentrated along the beaches and other tourism hot spots.

While there are numerous listings in Tampa for nightly and weekly rentals in bayfront condominiums, the city gets a relatively small number of complaints about vacationers lodging next to full-time homeowners, said Tom Snelling, director of the city’s planning and development department.

In Pinellas County and other coastal communities across Florida, the issue seems to be reaching a head.

The proliferation of online listings has kept Pinellas tax authorities busy. Every day, the tax collector’s office uncovers condos and homes being rented for the weekend without registering to pay the county’s 5 percent tourist development tax or the 7 percent sales tax due to the state.

Anyone who rents without a formal lease of six months or more is required to register with the county and pay taxes, but many people aren’t aware of the rule and others intentionally flout it, said Erin Sullivan-Colt, the county’s chief tax auditor.

The tax collector shows leniency to those who come forward after learning about the rules, but penalties can be steep for those looking to evade the costs.

Some websites notify users in various locations to research what taxes they may owe. Airbnb is taking steps to incorporate tax collections into its booking site, Sullivan-Colt said.

For now, it’s difficult for the tax office to track how thousands of properties are being used from one week to the next, so it falls mostly to condo associations or neighbors to report suspected violations.

“We get neighbors giving us information that next door is being treated like a hotel; there are people coming and going,” Sullivan-Colt said.

The problem is a growing concern for condo associations, which often have rules against short-term stays.

“A lot of owners are just rather cavalier about it all,” said Bill Priakos, who runs rental units at Barefoot Beach Resorts in Indian Shores. “They say, ‘I’m not a business, so I guess I don’t have to pay the tax.'”

Those who rent without paying taxes also undercut the hotels and condos that make up the county’s larger tourism industry, bolstered by millions of dollars in bed tax revenue used to advertise the destination, says Priakos, a member of the Pinellas County Tourist Development Council.

“If this were reigned in, not only would tourists be directed to the right place like hotels and the proper condos that are in this business legitimately, but we would see a real increase in tourist taxes generally,” Priakos said at a recent TDC meeting.

Concern about tourism money is what drove the state’s vacation rental industry to push for the 2011 law that places limits on what cities can do to regulate short-term stays.

The law prevents a city government from passing ordinances that would apply only to short-term rentals rather than all properties.

The Florida Vacation Rental Managers Association maintains that overzealous city governments will cripple the valuable short-term rental market if they’re allowed to pass restrictions meant to drive them out of residential communities.

The association recently published a report that estimates vacation rental properties generate $31billion in tourism spending each year.

“So many other industries depend on vacation rental tourism, it is imperative that governments do everything possible to leave those protections in place for private property owners and managers,” Paul Hayes, association president, wrote in an email.

Restrictions on the books prior to 2011 still apply, as a large group of property owners in Gulfport found out last month.

An anonymous complaint about rowdy vacationers prompted the city to investigate rentals on the website VRBO.com and send letters to more than a dozen property owners for violation of local zoning rules.

Many of them appeared at a recent City Council meeting saying they were unaware of an ordinance dating to 1993 that restricts short-term rentals of less than one month to only three times per year.

Renting for weeks at a time has become a common practice in this small town, prized for its old-fashioned shopping district and waterfront and the absence of towering hotels.

Vacation rentals are the only option for most short-term visitors.

“There’s no place to stay here,” said Ric Joyner, who started renting out a two-bedroom home near downtown on VRBO.com in January. “In this town, the tension is, do you stop folks coming in?”

Joyner and his wife, Mary, switched their property listing to a monthly rental after being informed about the city rules, but they expect to lose a lot of guests in the summer months, when travelers tend to take shorter vacations.

The Joyners are selective about who they rent to — no one under 25, that is, no spring breakers — and they say most people willing to pay $1,200 for a week in Gulfport aren’t likely to trash the property or keep the neighbors awake with all-night parties.

At a recent workshop in Madeira Beach about regulating vacation rentals, City Manager Shane Crawford said many weekend visitors aren’t necessarily causing a ruckus.

“These are not spring breakers. These are mom and dad with three kids coming down for the weekend,” he said.

While the city can tamp down on noise violations and other nuisances, there aren’t many options available for specifically regulating rental properties, some of which are owned by absentee landlords, meaning full-time residents may just as soon be subjected to college students as quiet families, Poe says.

The commissioner is reviewing ordinances in Key West, Miami and other cities that lay out steep fees for people who rent in neighborhoods zoned for permanent residents.

Until stronger rules can be enacted, Poe has taken it upon herself to root out the unlawful rentals and is seeking to bring several cases before a magistrate.

“It is a very, very serious problem. We are losing our neighborhoods,” she said.

The prospect of government scrutiny decimating what’s becoming an increasingly popular mode of travel across the world worries fans of Airbnb and other rental websites.

Airbnb’s representatives have called the subpoena a “fishing expedition” that would violate the privacy of people who haven’t broken the law.

It might also give pause to people looking to join the so-called “sharing economy,” an easy, less formal way for homeowners to make extra money while giving travelers more options.

Stuart Pollack, who rents a home in Gulfport, credits the big growth of vacation rentals with revitalizing downtown’s business district, which relies on residents and tourists alike.

“Most of these people had never heard of this town; 95 percent of them had never heard of Gulfport,” Pollack said. “Without these vacation rentals, you’re not going to have tourists at all.”

The Associated Press contributed to this report.

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