The owners of the building that spans 210-216 Duval St. want to convert the property to an upscale restaurant on the first floor with four market-rate rental units above. CITY OF KEY WEST/Contributed

Key West officials faced the reality of outdated city codes and land development rules that may actually contribute to the city’s housing shortage for working residents and Old Town parking shortages.

At the Oct. 19 city commission meeting, lawmakers were faced with two development applications that are allowed by law, but made no provisions for workforce housing or parking.

The owners of 210-216 Duval St. want to turn the former collection of T-shirt and retail shops into a 75- to 150-seat upscale restaurant with four market-rate rental units on the second floor.

Instead of designating 30% of the living units as affordable, the owners opted to pay a $200,000 fee in lieu of creating workforce housing. 

After a lengthy discussion with attorney Bart Smith, who represents the property owners, commissioners voted to postpone their decision until Nov. 3 in the hope that the owners would agree to provide one unit of housing either on-site or off-site.

Bart Smith told the commission, “At this juncture, those units could only be rented for 28 days or longer. The owners have looked at whether they can obtain transient licenses for the property.”

Commissioner Mary Lou Hoover then asked Smith the question on everyone’s mind: “So, how long until these four new units become transient rentals?”

Smith acknowledged that the process could take 180 days, and added in response to Hoover’s next question, “this is located in the pedestrian corridor, so any change in use doesn’t need parking. That’s how the code is set up.”

The “set up” of city code rankled Commissioner Sam Kaufman, who acknowledged the legality of the proposed project, but said, “I think this application shows how desperately we need revisions to our land development regulations. Here we have a new 150-seat restaurant that’ll require 40 to 70 new employees with nowhere for them to live and here we have an applicant not even providing one unit of employee housing. … I’m not happy with our code, which is antiquated. And we don’t have a provision to require more (of developers). As a community, when we replicate this over and over, we end up in a dire housing situation.”

Mayor Teri Johnston largely agreed with Kaufman.

“The code needs to be rewritten, and we can’t have a rotating planning staff that does it,” Johnston said. “But the current code says this is allowed. We can’t punish the applicant for abiding by the code as it’s written. But it does need to change.”

Another development proposal at 1020 Margaret St. received many of the same questions and a vote on it was also postponed until Nov. 3.

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Mandy Miles drops stuff, breaks things and falls down more than any adult should. She's married to a saintly — and handy — fisherman, and has been stringing words together in Key West since 1998.