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Owners of short-term rentals seek help with expenses

Residents complain about short-term renters disrupting their neighborhoods.

By MIKE DONILA
Published April 2, 2007

They have alluring names used to enchant visitors: the Buccaneer Bungalow, the Cabana Lantana and the Hideaway House.

The lawns are well-manicured, the neighbors quiet and the rent affordable.

But tourists who rent one of these homes in north Clearwater Beach - or anywhere else in Florida - could find themselves in the middle of one of the state's most contentious real estate issues.

All along the coastline, communities are wrestling with what to do about the short-term rentals that are popping up in neighborhoods never meant to house vacationers.

A convergence of factors has spawned the trend. Skyrocketing property taxes and insurance have combined with the easy advertising on the Internet to make it a lucrative option for owners of second homes or investment properties. And fewer low-cost, near-beach hotels have made it far more appealing for renters.

But for the full-time neighbors of such properties, the revolving door of tourists is troubling: noise, trash and traffic jams.

Stuck in the middle are Florida's local governments and their small band of code enforcers, who appear near powerless to stop the short-term rental practice, even though it's against the law in most communities.

"We all experience the same situation where people are working underground," said Monroe County Code Enforcement Director Ronda Norman, whose domain includes the Florida Keys. "They're continually renting, but when we go to the door the (renters) say: 'I'm just a cousin or a long-lost niece.' They're basically coached before they rent. That's when it's very difficult to get a conviction."

At the heart of the debate, like so many in Florida, is property rights, the real estate market and the increasing cost of owning a piece of paradise.

Runups in property values have led to higher taxes. Active hurricane seasons have multiplied insurance costs. The upshot: Many investment owners and snowbirds are stuck with an asset they can't unload or afford, notes Grant Thrall, who teaches business geography at the University of Florida.

Practice isn't unique

For relatively little hassle - and without the hefty fees charged by a management company - the owner can use the Internet to rent the property on a cash basis. The practice has particularly escalated along Florida's Atlantic coast south of Daytona Beach, where recent hurricanes have culled the hotel supply, said Thrall, a member of the American Real Estate Society's board of directors.

The practice isn't unique to single-family homes. Gary Poliakoff, whose Fort Lauderdale law firm of Becker & Poliakoff represents more than 4,000 condominium associations, has seen the issue pop up again and again in condo communities that restrict the practice.

"There have always been, since the dawn of time, multiple family houses where there has been a market for people looking to (lease) particularly during the tourist season," said Poliakoff. "You also saw more people buying condos with the intention to flip them and now they're looking for ways to derive income to fill the expense until the buyer pops up."

The latest ground zero in the debate may be north Clearwater Beach, a community of roughly 750 addresses where homes start at $500,000. Clearwater officials this month hope to resolve a 4-year-old lawsuit brought by owners of short-term rentals after the city attempted to crack down on the practice in late 2002.

Since then, the number of properties available as short-term rentals - those leases that are less than the city's minimum one-month lease - appears to only have mushroomed, according to neighbors, city officials and perusals of the Internet. The best estimate: more than 60.

Noise and loud music

"It's taken off like the stock market," complained Jerry Murphy, 73, a retired veteran from Clearwater Beach who along with neighbor David Ramos, 61, has formed a self-appointed volunteer posse to document the practice for City Hall. "It becomes a problem when the radio is blasting and you have 10, 12 young adults drinking and making noise and dancing and listening to loud music."

But Bill Schiller, 39, a software consultant from Minneapolis, hardly looks like a problem.

He, his wife and their two sons were ensconced last month for three weeks in a four-bedroom home on Clearwater Beach's Eldorado Avenue with another family of four.

Just two cars sat in the driveway. The biggest benefit over a hotel for the price of about $1,100 per week: a nice living room the two families can share as a common space, a real kitchen for snacks and a quiet residential setting that makes it easy to navigate the four youngsters' varying nap times.

The two families had considered a hotel or condominium but couldn't find one with nearly as much value, Schiller said. Plus, the beach is just across the street - no trekking up and down public elevators with umbrellas, towels and coolers.

"We wanted someplace close to the shops and restaurants, and we wanted someplace quiet," Schiller said. "We found it."

David Allbritton, who owns two Mandalay Avenue homes he rents in Clearwater Beach, doesn't see why the city would want to stop such tourist traffic. He's among the 30 property owners who sued the city in 2003, months after city leaders clarified an ordinance that further cracks down on short-term rentals. The plaintiffs' contention: The city had failed to enforce its short-term rental ban for years, making its enforcement capricious.

Allbritton, 56, contends most of the beach's short-term landlords rent to responsible adults, not out-of-control college students.

"Clearwater has such a beautiful beach but if the judge rules against us, you're not going to see as many people come," said Allbritton, a general contractor.

Said John Meek Jr., 53, a real estate agent and short-term landlord who says he rents his homes only to families: "I've put a lot of money into my properties, I don't want those parties. I won't tolerate them."

But not every renter is a Schiller, David Ramos will tell you. He and Jerry Murphy have photos of properties where six-plus cars stack up in a driveway for weeks at a time; of a wedding for 100 that spilled out of a 800-square-foot house into neighbors' yards; of overflowing trash cans.

"This is having an effect on the quality of life," Murphy said. "We deserve more decorum in a residential neighborhood."

That's the problem, said Mayor Frank Hibbard, who backs the city's efforts to stop short-term rentals. Since 2003, inspectors have contacted 48 property owners - though none of those involved in the lawsuit out of a pre-trial agreement. Eleven have gone to the code board and the city has put liens on two properties, one up to $22,000.

Hibbard said he sympathizes with landlords who say they have a right to rent their homes, but they "lose their rights once they infringe on the quality of life of others."

Other Florida leaders see a similar problem and also find themselves in court battling property owners.

"Generally speaking, it's a practice in most beach communities whether we realize it or not," said Mike Bonfield, city manager for St. Pete Beach, which limits rentals to 90 days in practically all residential areas.

"We're trying to protect the traditional neighborhoods," said Julie Silverboard, city manager of Madeira Beach, which rewrote its code after noticing the uptick in short-term rentals. "There was disruption, noise and trash."

[Last modified April 2, 2007, 01:30:49]