Keys communities struggle with short-term rentals
BY TIMOTHY O'HARA
Citizen Staff
KEY WEST — The battle
over allowing tourists to rent short-term in residential neighborhoods
has pitted neighbor against neighbor from Islamorada to Key West.
Attorneys have racked up
thousands of dollars in billed hours, either defending cities' rental
laws or fighting for property owners' beliefs that they should be
allowed to rent homes to tourists.
Vacation rentals have
become a multimillion-dollar business in the Keys and one state agency
fears that it's eating away at Monroe County's woefully inadequate
affordable housing market.
The state Department of
Community Affairs, which oversees growth in Monroe County, has had its
own ideas about what rules Keys cities and Monroe County should enact.
Islamorada is trying to work out a settlement with the DCA, which
rejected an ordinance that allowed 411 vacation rentals in the Village
of Islands. Marathon also is reworking its vacation rental ordinance.
The battle has become
ruthless at times. Residents have been known to yell at vacationers or
call the police on them for being too loud. Residents have turned in
their neighbors for code violations or for renting out illegal vacation
rentals.
Political action
committees have formed in both Key West and Islamorada to stop the
proliferation of vacation rentals.
The battle in Key West
has become so heated and potentially costly that some are questioning
whether the city should allow vacation rentals in Truman Annex.
As tourist season begins
in the Keys and vacation rentals start filling up again, questions about
the impacts on residents' quality of life, the Keys culture and the
affordable housing stock remain.
Key West or Key Lawsuit?
The battle in Key West
has the potential to cost the city millions of dollars in legal damages
or homeowners millions in lost revenue and legal fees.
The city has been on the
losing side recently when it comes to one potentially costly lawsuit and
more lawsuits are in the process. An appeals court recently ruled in
favor of property owners Opie and Kathy Rollison and ordered the city to
allow them to rent out their Truman Annex Shipyard condominium to
tourists for less than 30 days. The Third District Court of Appeal
overruled a lower court's ruling in a case involving a Truman Annex
homeowner's right to rent to tourists. The court ruled the Rollisons
could rent out their home, provided they do it less than 50 percent of
the year.
The Rollisons are asking
for $150,000 for legal bills and $100,000 in damages. They will square
off with the city in a hearing in January to resolve issues involving
damages.
"The city needs to
resolve the increasing litigation over damages," Opie Rollison said.
"It's going to get more litigious than less. ... We get calls every week
from people asking us about if they can rent out their homes. We have
had no less than 40 calls."
The Third District Court
of Appeal ruled that the city had an informal plan that allowed
residents to rent out their homes less than 50 percent of the year if
they had a conditional use permit.
This ruling sparked more
than 400 Truman Annex Shipyard residents to file a lawsuit asking for
the right to rent out their homes. Other groups in Truman Annex also are
considering filing a class-action lawsuit against the city for the right
to rent out their homes, Rollison said.
Residents of other parts
of Old Town fear the 50 percent ruling could lead to more vacation
rentals or guest homes in other parts of the city. Former Planning Board
Chair John Mertz formed Hometown, a Key West Homeowners and Residents
Political Action Committee, after the court ruling.
"We would be a lot better
if the hotels are hotels and the homes remained homes, everyone would be
happier," Mertz said.
The battle has caught the
eye of many land-use attorneys in South Florida, and the Rollison ruling
made the Florida Bar Association's Web page. The Pacific Legal
Foundation, a national not-for-profit company that specializes in
supporting property rights, is monitoring Truman Annex cases, but has
yet to step in on behalf of homeowners, said Valerie Fernandez, the
managing attorney of the Coral Gables office. The group either
represents homeowners in property rights cases or writes legal briefs in
support of the homeowners, Fernandez said.
Rollison believes the
city could avoid costly litigation if it would allow gated communities
and condo associations the right to set their own rules governing
vacation rentals, he said. Truman Annex homeowners associations have
24-hour security guards and on-site property managers to field
complaints.
The idea has merit, said
City Commissioner Harry Bethel.
"You can go back and look
at the record. I said from the very beginning that we should let Truman
Annex, La Brisa, the [Key West Golf Club] and 1800 Atlantic establish
their own rules. Let them do it through their homeowner associations,"
Bethel said. "They have their own security and their roads. Let them do
it."
The city passed a
vacation rental ordinance in 1998 that allowed condo complexes and gated
communities the right to make their own laws on a vote of 6-1. However,
the DCA objected to that part of the law, despite allowing the same
clause in the county's ordinance.
City Commissioner Ed
Scales understands the logic behind allowing gated communities to make
their own rules and the need for the city to revisit the issue, but he
believes this is not the time to make changes.
"Amending ordinances
during pending litigation is not the right environment, from a public
policy stand point," said Scales, who is an attorney.
Commissioner Tom
Oosterhoudt is split on allowing short-term rentals in condo complexes,
but he agrees with an idea put forth by Commissioner Merili McCoy, who
said that if they are allowed they should pay an annual fee or be taxed,
with the money going into an affordable housing pool.
Village vacation rentals
Islamorada is proposing a
new vacation rental ordinance that allows condo complexes and gated
communities to establish their own laws about vacation rentals. The
ordinance is taking more than a year to be hashed out and the DCA is
being lobbied heavily by a group of residents that wants to put more
restrictions on vacation rentals.
The city is working with
the DCA on a law repealing Islamorada's old vacation ordinance, which
would have disbanded all vacation rentals in 2003. The original
Islamorada Village Council created the vacation rental, but it was
repealed after a majority of the council left office.
Prior to the second
Islamorada council agreeing on a new vacation rental plan, a sport
fishing captain presented a petition to the Village Council that listed
names of charterboat captains against the city's proposed vacation
rental ordinance. Some questioned if the names on the list were
legitimate. A local Realtor ran a newspaper column a week later asking
the captains if they were really against vacation rentals, and said that
if they were, they would be placed on a list of captains to which the
Realtor would not refer clients. The Realtor claimed that many of the
names were used without permission.
The council, in September
of 2003, passed an ordinance that set a cap of 411 vacation rental
permits in Islamorada. The law was rejected by the DCA, because the
state agency feared its effect on the affordable housing market. A
subsequent proposal by the village set the initial limit at 411 and
tapered it down to 300 after four years. The money set up annual fees
with some of the money going to an affordable housing pool. The city
also set up a tough two-strikes-and-you're-out policy and requirements
that owners or property managers live nearby. If the city receives two
legitimate complaints about a rental, it's off the market.
The DCA officials were
not satisfied. They asked for compromises to set up safeguards
protecting a quickly dwindling affordable housing stock and to appease
residents concerned about tourists renting in neighborhoods.
DCA officials also told
village staff that vacation rentals should not be allowed in mobile home
parks and areas zoned for typical single-family neighborhoods. The state
also objected to a provision in the law that would have allowed
short-term rentals in any home appraised at more than 10 percent above
the village's definition of affordable housing.
Like Key West, a group
has formed there to fight vacation rentals. The group is called Protect
Our Neighborhoods Inc. The group filed paperwork to intervene in the
mediation hearings between the city and the DCA. Subsequent negotiations
between the two sides reduced some of those differences. Now, the
village has prepared an offer that council members say will bring the
two sides' respective positions very close together.
The village trimmed the
number of legal vacation rental permits down to 331. Those rental
properties that have been legally registered since December 2001 are
grandfathered in under the law. But no new vacation rentals would be
allowed in mobile home parks and ordinary single-family neighborhoods —
those zoned "residential medium."
In addition, the
ordinance would set a new criteria for which specific nongrandfathered
properties could be issued vacation rental permits. Under that criteria,
only homes valued at six times Monroe County's median family income
would be eligible. At today's figures, that would set the threshold at
$343,200, city planning officials said.
In areas zoned for less
dense residential use, the threshold would be nine times the median
income figure, or $514,000.
Middle of the road
All's mostly quiet on the
Marathon front.
Marathon also is tweaking
its vacation rental ordinance as part of city land development
regulation amendments. City Mayor Jeff Pinkus is working with residents
and vacation rental owners and hopes to have the ordinance ready shortly
after the first of the year, he said.
"The issue runs hot and
cold," Pinkus said. "It heats up a bit during tourist and mini-lobster
season."
The city does not have a
cap, but does set requirements that would make only 15 percent of
properties used for vacation rentals, under Pinkus' proposal. The city
does not allow short-term rentals in certain zoning districts or in
mobile home parks. The law would set up areas where it would be
permitted, with a three-strikes policy and requirements that owners or
property managers live nearby.
The law is designed to
protect the affordable housing stock. The city in the past had up to 300
permits and officials are going through an inspection process now.
"We have spent a lot of
time studying it and a lot of thought has gone into it. Everyone is
happy with it," Pinkus said.
tohara@keysnews.com |
