Vacation rentals become focal point of state vs. local power struggle


Six years ago, Aline was on the verge of losing her Boca Raton home.

The single mother was employed but a divorce had left her bad off financially. Additionally, she struggled to care for her aging parents.

Anxious to turn things around, she spotted an Airbnb newspaper ad. A former hotel owner, Aline jumped at the chance to make some extra money renting out the efficiency on her property.

»RELATED: The latest in Florida political news

Today, Aline, who spoke to The Palm Beach Post on the condition that her last name not be used, estimates she earns about $12,000 a year from her Airbnb rentals, a boost in income that she says saved her from the threat of foreclosure and allows her to assist her parents.

Becoming an Airbnb host is a decision that “saved my life,” she said.

Airbnb, an online marketplace that is to homes what Uber is to cars, and other websites like it are a growing part of an issue that is turning into a power struggle between state lawmakers and local government leaders.

At a press conference last week in Tallahassee, Sen. Greg Steube, R-Sarasota, and Rep. Mike La Rosa, R-St. Cloud, discussed their bills – SB 1400 and HB 773 respectively – which would put limits on how local governments regulate vacation rentals. The bills are backed by online vacation rental companies, including Airbnb and HomeAway, which chartered four buses to deliver vacation rental owners from around the state to Tallahassee for the press conference and a day of lobbying.

The Senate bill would prohibit county and municipal governments from regulating vacation rentals. Only the state would be allowed to set rules for people wanting to lease their homes or parts of their homes for short-term uses. The Senate bill also would require each vacation rental unit to be licensed by the state, and the state would charge a fee for the license.

The House proposal would change far less. It would simply say local governments cannot prohibit vacation rentals or regulate how long or how often a property could be used for vacation rentals. Otherwise it would require local governments to uniformly regulate all rentals — whether they are vacation or long-term.

The lawmakers say their bills would protect homeowners like Aline from losing their property rights. But local officials say Steube and LaRosa’s efforts are more about chipping away at local government control than protecting homeowners.

Local leaders said it’s part of the larger agenda of House Speaker Richard Corcoran, R-Land O’ Lakes, to use the 2018 legislative session to crush municipal rule with bills such as HB 9, a proposed ban on so-called sanctuary cities.

Flanked by the vacation rental owners, Steube said Tuesday that local regulations are in violation of a state law that prevents local governments from deciding how often and how long single family homes can be rented.

“Local governments have been infringing on those rights,” he said.

Aline concurred.

“You should not be told what you can do with your home,” she said.

But Richard Radcliffe, executive director of Palm Beach League of Cities, said his group has battled legislation like Steube’s and La Rosa’s bills “for years” to stave off a “trampling” on the rights of residential property owners who prefer that their local government handle regulation.

“The key to home rule is keeping neighborhood alive and together and you don’t do that from Tallahassee,” he said. “(Legislators) all seem to think they know how to do it.”

Allowing the state to set the standard for vacation rentals doesn’t make sense in a state where communities differ greatly from town to town, Radcliffe said.

“What makes Riviera Beach a waterfront community is very different from Delray,” he said. “They should be able to regulate their communities.”

In a telephone interview, state Rep. Al Jacquet, D-Delray Beach, agreed.

Jacquet, who calls himself a strong proponent of Palm Beach County’s tourism industry, said that while property rights should be respected, it’s the responsibility of local government to set limits that help ensure communities are livable for all residents.

“Every city is different, every county is different,” he said. “We want to be able to determine how we regulate vacation homes.”

The $30 billion vacation rental business is an integral part of Florida’s tourism industry, which set a record last year with more than 88 million visitors coming to the state compared to 85 million in 2016, according to VISIT Florida.

Locally, West Palm Beach was identified as one of popular selections for vacation rentals between summer 2014 and summer 2015 with bookings jumping 852 percent, according to travel website Hipmunk.

That flood of tourists coming to the area is a boon for everyone, not just vacation rental owners, said Aline.

“I give referrals to businesses in my town,” she said. “It helps the businesses.”

But with tremendous growth comes equally tremendous headaches – like trying to capture all of the tax revenue those vacation rental bookings generate.

Palm Beach County Tax Collector Anne Gannon in 2014 filed a lawsuit against Air BNB Inc., HomeAway Inc., TripAdvisor LLC and CouchSurfing International Inc.

In the suit, Gannon alleges the companies have not registered as rental dealers and have not been collecting or paying the county’s 6 percent tourist development tax on vacation rentals booked through their sites. The suit, which was set for trial in December but then postponed, alleges the companies charge customers a service fee that implies the companies are paying the county the taxes due for a room but in actuality are not paying the taxes.

The tax – known as a “bed tax” – is levied on all hotel stays and vacation rentals of six months or less. That money is used to pay for tourism-related advertising, beach renourishment and facilities such as Roger Dean Stadium and the new Ballpark of the Palm Beaches. The County Commission also recently discussed using it for the upkeep of natural areas.

Gannon declined to comment on the pending litigation, but she and Airbnb Florida Policy Director Tom Martinelli exchanged accusations in May letters to the editor in The Post. Martinelli’s letter said Palm Beach County residents earned $9.5 million in supplemental income in 2016 by hosting on Airbnb and estimated the county could collect more than $500,000 in taxes if it would sign a tax agreement with the company, as Martinelli said 38 Florida counties had done. But “Gannon has expressed no interest in entering into a tax agreement with Airbnb,” Martinelli’s May 18 letter said.

Gannon’s letter, published May 27, said she would be eager to reach an agreement with Airbnb except that the company was insisting on keeping its host and property information secret, which would prevent her office from ensuring that the accurate amount of taxes were being collected and paid, which she pointed out is the legal obligation of her office.

Gannon did say last week that her office employs a number of tactics to collect the tax, including hosting programs that educate vacation rental owners about properly registering their property and paying the tax. Beginning in May, vacation rental owners will be able to register their properties online to make the process more efficient and accessible, she said.

Bills like SB 1400 and HB 9 would restrict constitutionally independent elected officials such as tax collectors from doing their jobs, Gannon said.

Obtaining input from all stakeholders in the matter – and not just property owners – “would be more productive,” Gannon said.

Vacation rental owners, like those in other industries, generally favor the broader consistency of statewide as opposed to local regulations, but not all property owners are in favor of the state handling vacation rental regulation instead of their local governments.

While West Palm Beach resident and vacation rental property manager Rick Rose depends on vacation rentals for his livelihood, he said he sees the issue “more from the neighborhood perspective.”

Rose, who owns Palm Beach Vacation Rentals and Grandview Gardens Bed and Breakfast and Vacation Homes Resort in West Palm Beach’s historic Grandview Heights neighborhood, said it’s OK if some communities do not want vacation rentals.

“If a community says it wants only single-family homes…they should have the ability to regulate that,” he said. “There are lots of neighborhoods in the state that do not want tourists,” he said.

Rose said he’s in favor of “city rule” but also believes “there is a such thing as a healthy balance” like West Palm Beach’s requirement that hosts rent their properties for a minimum of seven days.

“The minimum stay is a way to strike that balance,” he said.

Kenya Woodard is the Capital Correspondent for The Palm Beach Post. Her byline has appeared in several news outlets and magazines, including the Daytona Beach News-Journal, The Tampa Bay Times, and Essence.



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