Short Term Rentals
Background information
Overview
Local governments have home rule power to regulate short-term rentals (STRs) in their jurisdiction. Typically, short-term rental regulations would not affect the multifamily industry, but because each local government creates its own rules and definitions, sometimes multifamily communities get wrapped up and included with STRs.
Background
A white paper prepared by the Robinson & Cole law firm defines STRs: “The term short-term rental housing typically means a dwelling unit that is rented for a period of less than thirty consecutive days. In general, short-term rental housing differs from bed & breakfasts, hotels, motels, and other lodging uses by providing complete, independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking and sanitation.” [1]
Section 509.032 of Florida Statutes specifically preempts local governments from imposing additional regulations or inspections on apartment communities and limits the authority of local governments to regulate or prohibit short-term rentals. As noted in subsection (b), this legislation grandfathered in any prior local regulation on STRs, therefore some cities may still have strong regulation on STRs.
(7) PREEMPTION AUTHORITY.—
(a) The regulation of public lodging establishments and public food service establishments, including, but not limited to, sanitation standards, inspections, training and testing of personnel, and matters related to the nutritional content and marketing of foods offered in such establishments, is preempted to the state. This paragraph does not preempt the authority of a local government or local enforcement district to conduct inspections of public lodging and public food service establishments for compliance with the Florida Building Code and the Florida Fire Prevention Code, pursuant to ss. 553.80 and 633.206.
(b) A local law, ordinance, or regulation may not restrict the use of vacation rentals, prohibit vacation rentals, or regulate vacation rentals based solely on their classification, use, or occupancy. This paragraph does not apply to any local law, ordinance, or regulation adopted on or before June 1, 2011.
Some apartment communities have designated units as short-term rentals, by partnering with companies like Airbnb. They have decided to rent certain units only as short-term rentals rather than as apartments with traditional leases.
Short-term rentals raise potential issues for apartment companies, including tenant lease violations, on-site security concerns, and questions around liability and property insurance. Tenants sign a lease and abide by certain regulations, but when an individual who is not the tenant stays in a unit, that opens a door to a host of potential problems. [2]
Problem
Unfortunately, local ordinances when written poorly can inadvertently apply to apartments that are not participating in short-term rentals. If a local ordinance does not specifically state that it doesn’t apply to apartments, then regulations for STRs can be misconstrued and interpreted to apply to apartments. Some ordinances blatantly incorporate the entire apartment community. An example of this would be if the local ordinance defined STRs as lodging for a period less than 30 days [3]. For this reason, it is important to define the public lodging establishment in the ordinance to ensure it excludes residential apartment communities with five or more units. Apartment communities with five or more units are already regulated and licensed under state law.
Some local jurisdictions require the STR to register their property with the local government. They often require short-term rental properties to pass certain inspections prior to the issuance of a permit, license, or renewal.
Examples in Florida
Miami Beach
Miami Beach has decided to prohibit short-term rentals for a designated amount of time in certain zones. The City of Miami Beach Land Development Regulations “prohibit short-term rentals for periods of less than six months and one day in single family homes and other multifamily residential buildings located in certain areas of the City.” [4] For those eligible, the city sets certain requirements and fees for apartments that rent out short-term rentals as their primary source of income. [5]
St. Augustine
St. Augustine clearly defines short-term rentals to exclude apartment communities. The city’s definition states, “Short-term rental unit means a one- or two-family dwelling unit which is rented more than four (4) times in any calendar year.” [6]
Atlantic Beach
Atlantic Beach defines short-term rentals with a vague definition that could potentially apply to apartments. The code states, “Short-term rentals shall mean any residential rental or lease the term of which is less than ninety (90) days. Short-term rentals shall similarly be considered to be commercial uses as are hotel, motel, motor lodge, resort rental, bed and breakfast or tourist court uses.” [7]
Orlando
Orlando has permitted some apartment communities to designate units as short-term rentals, by partnering with companies like Airbnb. Steelhouse Apartments is one of the apartment communities allowed to lease out a small portion of its units as short-term rentals. The community applied for short-term rental licenses in 2018. “City code states the number of units in apartment buildings that can be leased as short-term rentals cannot exceed 10 percent.”
Alternative Solutions
It is important for the local jurisdiction to accurately define short-term rentals in order for there to be no confusion with traditional apartment leases. Following Florida State Statutes’ definition of a vacation rental can be one best practice. The definition is found in section 509. 242(1)(c):
A vacation rental is any unit or group of units in a condominium or cooperative or any individually or collectively owned single-family, two-family, three-family, or four-family house or dwelling unit that is also a transient public lodging establishment but that is not a timeshare project. [8]
This definition will exclude apartment communities.
[1] Robinson & Cole LLP, Short-Term Rental Housing Restrictions, 2011 http://arlingtontx.granicus.com/MetaViewer.php?view_id=2&clip_id=1188&meta_id=140526
[2] National Apartment Association, Short Term Rental Fact Sheet
[3] https://www.miamidade.gov/building/standards/residential-short-term-vacation-rentals.asp
[4] Miami Beach Code of Ordinances, Chapter 142, Article IV, Division 3, Sec. 142-1111 (a)
[5] Miami Beach Code of Ordinances, Chapter 142, Article IV, Division 3, Sec. 142-1111
[6] St. Augustine Code of Ordinances, Chapter 28, Article III, Division 2, Sec. 28
[7] Atlantic Beach Code of Ordinances, Chapter 24, Article II, Sec. 24-17
[8] Florida State Statute 509.242 (1) (c)