A Monroe County Tourist Development Council research study, examining occurrences of illegal or non-compliant vacation rentals and vacation rental scams in the Florida Keys, was released Tuesday accompanied by recommendations to enhance a partnership between the TDC and the Monroe County Tax Collector’s Office to help mitigate such practices.
At the beginning of 2015, Monroe County Tax Collector Danise Henriquez assumed enforcement responsibilities of the county’s tourist development tax.
“We know that illegal or non-compliant units may evade tourist development and sales taxes, resulting in a loss of tax revenue funding for Keys schools, infrastructure and municipal governments’ general funds,” Henriquez said. “We’re working with TDC as well as county and municipal code enforcement officials to increase compliance and tax collections.”
Henriquez said already 22 new TDC tax accounts have been established, resulting in the assessment and collection of more than $25,000 in once-missing revenue.
Last year Key West Code Compliance found 43 illegal transient rentals and has already discovered 27 this year. In Key West there are 751 registered vacation rental properites, comprising 1,042 units, which does not include guest houses or motels. Property owners pay $152 to the city every year to keep their licenses current. Unlicensed rentals deprive the city of revenue.
“One of the cases we uncovered is a property being rented for $7,000 a week in cash without the tax collector seeing any of that money,” said Code Compliance Manager Jim Young. “It is cheating the taxpayers.”
The City of Marathon just hired a new code compliance officer specifically to deal with vacation rental issues (although he has other duties as well). Cody Ward earns $41,000 a year and in one month has already identified 10 illegal vacation rentals in Marathon.
“He found owners advertising unlicensed vacation rentals and mailed out a courtesy letter,” said Stacy Charlton, building code administrator in Marathon. She said several of the homeowners have already come in to apply for the vacation rental license, claiming ignorance.
“Our goal is compliance through education,” she said.
In Marathon, the cost to license a home for vacation rental use is $750 for first-time applicants and $500 every subsequent year. Charlton said there are currently 510 licensed vacation rentals in Marathon.
The little city to the east of Marathon has more. The City of Key Colony Beach has 526 short-term rentals. The licensing fees are $425 and $350 for first time licensing fees and renewals, respectively, for single-family homes. However, the City of Key Colony Beach’s fees are currently under discussion and may be based on occupancy in the future.
The TDC report revealed that illegal units are often the result of the homeowner not understanding or being aware of the specifics of the local county ordinance, according to TDC research director Jessica Bennett who coordinated the document.
“Some Keys property owners are under the misconception that, if they rent a spare room out or rent a home for a few months, vacation rental rules don’t apply, but they do,” Henriquez said. “Any sleeping accommodation rented six months or less almost always has tax implications, state and county licensing requirements, and may also be subject to municipal licensing and zoning requirements.”
The report was discussed at the council’s regularly scheduled meeting staged at Islamorada’s Postcard Inn.
“Scams swindle visitors of their hard-earned money, while illegal units may evade licensing procedures established to protect visitors and residents,” said TDC Director Harold Wheeler. “Vacation rental licenses ensure units have been inspected, meet safety standards, are properly cleaned, do not create parking or noise issues and have a Keys-based licensed manager.”
Young said the essential difference between affordable housing and transient rentals is the transient rentals demand the highest and best price, often being rented out for just a week or two.
The full report is available online at http://www.monroecounty-fl.gov/index.aspx?nid=328.
Recommendations in TDC’s report to maximize working with the tax collector include:
• Establish a toll-free hotline and email address to give residents and visitors an easier method to report suspected illegal units.
• Encourage private and corporate online vacation rental websites such as Airbnb and HomeAway, as well as TripAdvisor, to publish Keys vacation rental licensing requirements.
• Provide traveler tips on TDC’s website at www.fla-keys.com <http://www.fla-keys.com> for finding legal vacation rentals, avoiding illegal ones and educating travelers on why it is so important to stay in legal units.
• Work with Keys chambers of commerce to assist them to inform travelers and, if a vacation rental issue arises, encourage them to forward complaints to the tax collector.
• Recommend municipalities take time to review and update their vacation rental code to identify needed changes, including addressing modern methods of marketing rentals such as Airbnb and other websites.