The island city of Anna Maria is once again contemplating tighter regulations on vacation rental homes to protect residential neighborhoods from being dominated by what some consider hotels. If adopted, this particular policy, one that was discussed and discarded in the past, could expose property taxpayers to expensive lawsuits.
We urge commissioners to be wary of unintended consequences in the city's struggle to come to grips with the growth of vacation rentals. A new state law allows local governments some leeway in regulating these resort dwellings.
In late September, the commission adopted a new building moratorium to prohibit permits for the construction of new structures with four or more rooms that could serve as bedrooms. Two weeks ago, the commission went a step further by discussing the addition of a restrictive covenant that would grant building permits to property owners who vow not to rent or lease to nonfamily members for less than 30 days.
But another commission policy discussion on vacation rentals brings some major legal questions. Current city land development code prohibits motels in residential districts, and the regulations define a motel as having three dwelling units that rent for less than 30 days.
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So the city is considering reinterpreting code to define a bedroom as a lodging unit. Vacation rental homes with three bedrooms would then be labeled a motel, and thus illegal in residential neighborhoods.
Scott E. Rudacille is an attorney with Blalock Walters, and he is board certified in city, county and local government law. He sent Anna Maria commissioners a letter dated Oct. 22 that calls the idea unreasonable. First, he notes, the city attorney previously opined "the interpretation is not tenable unless the bedrooms are rented separately ..."
Second, no city commission has construed the code to mean a bedroom is a lodging unit, and this exact interpretation was formally rejected by commissioners two years ago, Rudacille wrote. "The current City Commission has stated openly on the record several times that this course is only being pursued in order to circumvent" federal and state law.
Furthermore, "If the City's position were taken seriously, all vacation rentals in the state could be deemed illegal."
The City of Venice attempted to reinterpret code and limit short-term vacation rentals in 2009 and then lost a massive lawsuit, paying one property owner $300,000 and more in attorney's fees.
None of this is news to Anna Maria as Rudacille, who represents city property owners, has cautioned city officials about Venice's disastrous experience over the years.
The Legislature and Gov. Rick Scott eliminated local control of the home vacation rental market in 2011 (with some grandfathered exceptions). That unleashed a torrent of home development and conversions. Cities and counties around the state fought for changes in state law this past legislative session and achieved some relief. A new state law that went into effect on July 1 removes the total preemption by the state for regulating vacation rentals. It allows local governments to constrain these dwellings as long as the rules do not ban the rentals or restrict the duration or frequency of a rental.
Interestingly, the final House analysis of the new law cites a report by Robinson & Cole that provides regulatory options for local jurisdictions "that could curtail the complained effect vacation rentals have on a community. It is possible for a local government to create regulations of the vacation rental industry in a way that could have a beneficial impact on both local property values and keep the vacation rental market relatively intact."
The report, prepared for the National Association of Realtors, suggests one way for communities seeking to retain a balance between long-term residences and visitor-oriented accommodations: through the adoption of a ratio of long-term dwellings to short-term rental permits.
The state should be consulted on whether that or other regulations mentioned in the report would be allowed under the new Florida law.
As Anna Maria commissioners proceed with discussion, they should be confident that any action taken on vacation rentals will pass muster with state law.