Many people for years have been renting their single family Florida homes as furnished short term rentals. Unlike condominiums which generally set specific minimum rental periods, most homeowner associations never considered this. The Orlando area is one exception, with some communities designed specifically for short term rentals.
Neighbors often object to these rentals, whether for a week, a fortnight or a month. In actuality, many of these homes are better maintained than annual rentals, since it's important to keep a house and grounds attractive in order to keep vacationers happy. Most of the time the renters are families who fit in with the neighborhood - but what about the times that the renters want to party all night?
Most zoning ordinances for single family neighborhoods don't specify minimum rental periods. St. Pete Beach, an unusual situation and an area with a lot of hotels, has a city rule that neither homes nor condos can be rented for less than 90 days. (This doesn't stop the rentals, but it probably curbs it). For the rest, though, the closest to regulation is a clause that says an owner shall not operate a business out of his house. Hmmm, that's a gray area. Is an annual lease a business? Is a nightly lease a business? Where's the line?
Many Florida communities have sought to pass laws preventing short term rentals - some have succeeded, but most haven't.
Clearwater Beach is a popular resort destination. The northern end of Clearwater Beach is primarily residential, with many high priced homes. The city says that short-term rentals are illegal in residential neighborhoods, but didn't define "short term" until it tightened the ordinance in 2003, prohibiting rentals for less than 31 days. A group of homeowners - 31 properties to be specific - filed suit, arguing that the city hadn't enforced the rule, that these rentals have been a way of life for decades, and that they should be grandfathered. They also alleged economic necessity since Clearwater Beach is losing so many hotel rooms to condominiums.
The Circuit Judge just ruled in favor of the group, based on lack of enforcement by the city. She also felt the ban wasn't clearly in the law. She rules that these properties could be grandfathered as long as they continue to be used for short-term rentals. If they quit or are destroyed, the exemption terminates. Naturally the neighbors say this won't end the 4 year battle.
Renee - are you having the same issues in Las Vegas?
Bryant - yes, they should be paying sales tax. Most do, and those who use a legitimate rental agent definitely do. I don't object to them either, as long as a) they do it legally, as you said, and b) they have enough control over the tenants that they don't become a nuisance to the neighborhood in any way.
To a point, they haven't gone all the way to zoning ordinances but many many SFR (as well as Condo/Townhome) HOAs regulate it. I do remember when I bought my house that I read in the CCRs (no association) that no "overnight rentals" were allowed. There is no association to enforce so you would have to depend on the county to do so.
I think short term rentals are another attraction for investors and keeps values high since there are many different forms of use for a property.
Sharon,
Great post, our brokerage has been actively involved in this lawsuit since we manage many of these short term rentals and as a resident of Clearwater Beach myself living there when the rules changed, many of these people had purchased these properties because of the short term rental income - I think the ruling is a good one. I've never known there to be any problems with the rental units and I personally lived next door to one. I can tell you there are at least 31 happy home owners on North Clearwater Beach today.
Renée - most of our neighborhoods are pre-HOAs. And as you mentioned, "overnight" wouldn't cover weekly rentals, anyway. Yes, investors do cause rising prices - but they are also the cause of our current decline caused by those super-fast increases. The ones that are now wiling to "dump" their properties are having a negative effect. Guess that's really the difference between flippers and investors.
Cyndee - good to know you manage short term rentals. I'll keep that in mind for the future, since the current short term rental company I use just deals in south Pinellas. We have some short term rentals in our neighborhood, too, since we're only 10 minutes from the beach but away from the frenzy, and I haven't found them to be a problem at all. Hope for all our sakes that the ruling won't be overturned. Too bad it's limited to those 31 homes.
I agree. That division of our company only does this part of the beach too. Good to know if I get people who want the St Pete Beach area. It only makes sense with all the traffic we found in the rental business you need to be close by or waste all your time sitting in traffic.
Sharon, we are definitely seeing investor distressed sales impact area property values - I tell people if they don't have to sell right now, don't. On the flip side - if anyone is thinking of buying I'm not sure the deals will get any better than right now. What do you think?