Key West city officials want to make it more expensive for homeowners to rent their properties for a month or a week at a time.
Monthly and weekly vacation rentals are a main cause of Key West’s long-term housing shortage, Commissioner Jimmy Weekley said at the Jan.4 city commission meeting, where officials raised the city’s transient rental fee from $150 to $300 while instructing city staff to investigate the possibility of raising those fees even more.
“Why $300 and not $3,000 or $4,000?” Weekley asked. “If the city wanted to use that money and put it into an affordable housing trust fund because so many of these properties are diminishing our affordable housing supply, is that doable? Since they’re responsible for the loss of housing in this community, I think they oughta be paying more into a housing trust fund.”
City Attorney Shawn Smith said, “We can certainly look into it, but it’s a complex issue that will take time because you can’t put the cost of affordable housing entirely on the back of a private citizen.”
He added that the topic would be a good one for the city’s new community development and housing director to explore. That position was added to the 2022 budget at the request of Mayor Teri Johnston, and five candidates are being interviewed this month, facilitator Elisa Levy said during her report on the Key West Forward strategic plan.
During the discussion, officials made a distinction between the fees charged by the city for transient, or short-term, rentals, which are fewer than 28 days, and the market-rate cost of an existing transient license. The city no longer issues new transient rental licenses, so an existing one must be bought on the open market, where they often sell for $350,000 to $500,000 due to their profitable potential.
With commissioners in agreement with Weekley, officials did vote unanimously to raise the fees for transient rentals from $150 to $300 while they explore additional price increases and possibilities.
In other news, the commission voted 6-1 to approve the new sidewalk cafe program and the new fees, which were lowered since the outdoor dining program started last summer.
Initially, participating restaurants had to pay an annual base fee of $100. “The program also required a $500-per-seat revocable license fee. In addition, the city charges a one-time per seat
impact fee of $592, billed over seven years,” city documents state.
The new fee schedule eliminates the $500-per-seat fee, but includes a $592 fee that’s payable over seven years.
“At this time, staff recommends amending the café dining/seating ordinance to require a one-time $100 application fee and payment of the aforementioned impact fees; however, at this time the revocable license fee is recommended to be removed,” city staff recommended.
Commissioner Billy Wardlow was the only dissenting vote, saying, “I really don’t care for it. I approved it for COVID, but a lot of them are making plenty of money down there. Is the city liable for any problems, like if a drunk person walks by and takes food off someone’s plate?”
Commissioner Mary Lou Hoover pointed out that the new ordinance requires restaurants to carry an additional $1 million in insurance for outdoor dining.
Commissioner Sam Kaufman added that the sidewalk cafes “could be a really good selling point for our Duval Street revitalization, especially if we can get more uniformity and wider sidewalks on both sides of the street.”
As for cruise ships, City Attorney Shawn Smith told the commission that he and City Manager Patti McLauchlin were meeting with special counsel Ed Pozzouli on Jan. 5, the day after the commission meeting. “We’ll get an update on the new cruise ship ordinances from him. And Judge Sandy Taylor is also looking at her schedule for a date that she can accommodate mediation. We’re hoping for a Saturday before February.”
At the start of the meeting, Johnston presented her State of the City address, outlining past and upcoming projects, successes and challenges.
