Miami Beach Could Soon Arrest People Operating Airbnb-Like Rentals Without A License

By Kyra Gurney
Miami Herald

WWR Article Summary (tl;dr) At a meeting on Wednesday, commissioners in Miami voted to criminalize operating a business (like Airbnb) without a license after the second offense. The City Commission also passed new rules requiring platforms that advertise short-term rentals to post listings only if they include business license.

Miami Herald

In its ongoing battle against illegal short-term rentals, Miami Beach has developed tough tactics: $20,000 fines, late-night enforcement visits, and even an online tool to help property owners screen potential tenants for violations of the city’s short-term rental laws.

But none of it has been enough to control the city’s flourishing illegal rentals market. Now, Miami Beach wants to criminalize operating a business, such as a short-term rental, for more than two days without a license. The city is also restricting how short-term rentals are advertised on platforms like Airbnb and HomeAway.

At a meeting on Wednesday, commissioners voted to criminalize operating a business without a license after the second offense. The violation is currently punishable by a $1,000 civil fine, but if the new proposal passes a final vote in October, violators could face up to 60 days in jail for a third strike.

Each day operating without a license is considered a separate offense, so unlicensed short-term rental hosts could be arrested for renting a property for three days or more. Miami Beach prohibits rentals of six months or less in most residential areas.

Mayor Dan Gelber, who proposed the measure, said that criminalizing a third violation would give the city an extra tool to go after the operators of any type of unlicensed business. He noted that a Miami-Dade County ordinance already makes it a misdemeanor to operate without a license, but said that the county ordinance is not often enforced in Miami Beach. The city’s existing ordinance criminalizes unlicensed operations only for continued violations of 30 days or more, which can be difficult to enforce.

“I felt like our enforcement ought to have different parts of the tool kit available,” Gelber said. “This gives our folks the ability to do a gradual enforcement if they want to or a more immediate enforcement if they want to.”
Commissioner Michael Gongora, who opposes the measure, called it “very scary.”

“There are a lot of people that operate businesses out of their house, that operate businesses on the street, and if I’m reading this correctly … each day that the person operates is a new violation so technically within three days they could be in jail,” he said.

The commission voted 4-3 to pass the measure in an initial vote. A final vote will be taken Oct. 17.

The City Commission also passed new rules requiring platforms that advertise short-term rentals to post listings only if they include business license and resort tax registration numbers, information proving that the property owner has registered with the city. Platforms will be fined $1,000 for a first offense and up to $5,000 for repeated violations. City officials argue that the restrictions and fines are necessary to curb illegal rentals, which they say diminish the quality of life in residential neighborhoods.

Platforms that agree to use a technology known as “geofencing” or “geocoding” to block property owners from listing properties located within a prohibited area are exempt from the new rules. In order to qualify for the exemption, platforms have to submit a monthly certificate to the city verifying that the geofencing or geocoding is active and effective.

Airbnb, the leader in short-term rentals, said the company disagrees with the new platform rules.

“We are disappointed by the city’s decision to double down on a law that even they admit isn’t working,” said Tom Martinelli, the company’s Florida policy director, in a statement. “We stand by our position that our hosts and residents in Miami Beach deserve comprehensive short-term rental reform that addresses the fundamental flaws in the city’s existing system.”

In a letter sent to the City Commission before the vote, Airbnb said the proposed platform restrictions violate federal law protecting internet companies from liability for user-generated content. The company said the proposal was “regrettably short-sighted, incomplete, legally insufficient, and will not fix the issues the residents want solved.”

Instead, Airbnb urged Miami Beach to work with short-term rental platforms to find another solution to disturbances in residential areas and to streamline the process for registering short-term rentals in areas where they are permitted. The company declined to comment on the criminalizing of unlicensed business operations.

HomeAway, another popular short-term rental platform, did not respond to a request for comment.

The new restrictions also apply to property owners, who must now include their business license and resort tax numbers on all listings advertising short-term rentals. Otherwise, according to the ordinance, the city will assume that the rental hasn’t been registered. Violators will receive a written warning after a first offense, but could face fines of at least $5,000 for repeated violations.

Enforcing the new restrictions could prove to be a challenge. There are dozens of online platforms advertising short-term rentals and thousands of listings to comb through. Although there are currently more than 6,100 short-term rentals in Miami Beach that are advertised online, according to AirDNA, a website that analyzes the vacation rental market, the island has only 465 registered short-term rentals. These numbers suggest that just 8 percent of short-term rentals comply with city law.

Miami Beach has also found it difficult to enforce the current fines. Although the city fines property owners, lease holders, and short-term rental platforms for violations, the fines can only be enforced by putting a lien on a property. Renters typically don’t own property, which can make it hard for the city to collect fines from lease holders.

A. Michael Froomkin, a technology law professor at the University of Miami, said the new platform restrictions could still be effective even if the city isn’t able to catch everyone who violates the rules.

“Of course, you don’t need to get everybody to scare people into complying,” Froomkin said. In addition to combing through short-term rental platforms for violations, Froomkin noted that the city could wait to get a complaint about a particular property and use the new restrictions to level additional penalties against violators.

The city’s approach to illegal short-term rentals, which includes the country’s highest short-term rental fines, has sparked controversy.

Some residents argue that the rentals are a legitimate means of earning extra income and provide affordable options for tourists. The city also faces lawsuits from residents challenging the short-term rental rules.

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