Miami Beach Comission To Again Address Issue Of Short-Term Rentals
Sep 13, 2016
Miami beach commission to again address issue of short-term rentals: Advocates Push for Regulation & Taxation Allowing Vacation Rental Properties in the interest of Property Values and Tourism, Comments by Real Estate Expert and Broker Ross Milroy of Ross Milroy Real Estate
Miami Beach, United States - September 13, 2016 /MarketersMedia/ —
Mosquitos aren’t the only things the City of Miami Beach is killing off with their toxic decisions. Over the past three months, as the City has been doling out millions of dollars in fines for short term rental properties, the number of Miami Beach listings on sites like Airbnb and HomeAway have dwindled drastically, down to only a few hundred.
On the surface, those who don’t personally engage in short-term rentals might assume Miami Beach’s crackdown is good for the neighborhood and won’t have a direct affect on them.
What many don’t consider are the long-term consequences and the steep financial impact these bans have on not only local businesses and the city as a whole, but directly to their individual property values.
Local Miami Beach real estate expert and Broker, Ross Milroy of Ross Milroy Realty, explains:
“As short-term rentals are getting pulled off the market by the hundreds and removed from sites like Airbnb, property owners scramble to rent those properties on a long-term basis. As a result, the rental pool has exploded with the addition of these furnished rentals. In order to remain competitive with the huge influx of inventory, property owners are being forced to lower their asking rents. When rents lower, so do property values.”
In addition to lower rental rates, condo sales prices are also expected to take a hit as investors and potential investors move out of Miami Beach and seek properties in other surrounding areas such as Downtown Miami, Brickell, Midtown Miami or even as far north as Sunny Isles Beach where short-term regulations and fines remain much less stringent.
“It’s not only the investors that are leaving the Beach, family vacationers, the very lifeblood that made Miami Beach what it is, are choosing other places to stay where they can rent space for their family – more comfortably, and for less money,” said Milroy. “Let’s face it, how many families can afford to rent at a beachfront condo-hotel, such as the W Hotel or Setai, in Miami Beach and pay upwards of $500 per night?”
It’s well known that Miami Beach is a transient tourist community. Out of the 51,065 properties recorded in 2015, only a bit more than one quarter (14,196) are recorded as homestead properties designating them as the owner’s primary full-time residency. This leaves over 70% (36,869) non-homestead properties which are often owned as investments or vacation homes where owners rely on rental income during times they are not using them to help offset costs. (Source: Miami Beach Economic Development Dept. based on information provided by the US Census Bureau)
Many experts, including Milroy, are pushing Miami Beach to not outright ban and fine short-term rentals, but to regulate and tax them. Other cities, such as Los Angeles have made deals with Airbnb to collect millions in lodging taxes. With taxation and regulation, cities hope to not only keep their property values from dropping and tourists from fleeing, but it also allows them to keep tighter control on who and what properties are being rented -- all while taking in much needed tax revenues.
“The implementation of the a wide-spread ban on these rentals means that those who do still choose to rent, do so by breaking the law – those who break the law are often the same ones not paying any attention what type of people are renting their units or what might be taking place within them,” said Matis Cohen, president of the North Beach Neighborhood Association. “The owners of the high-end rental properties, which are those that tend to attract families, go to great lengths to avoid groups of partiers… they don’t want those type of people in their properties even more than the city or neighbors don’t want them.” Cohen is a proponent of “Localizing, regulating taxing & enforcing".
Just as the taxi commission was the strongest voice opposed to Lyft and Uber, so is the Hotel Association who claim they are in danger of losing business if short-term rentals are allowed to operate. Many experts negate these concerns by presenting figures published by the Greater Miami Conventions and Visitors Bureau that show very healthy occupancy numbers as well as average daily room rates 44% higher than the US average.
According to statistics published by the GMCVB, Miami Beach hotels have continued to enjoy growth over the years Airbnb and HomeAway have been in operation and a consistent 78% occupancy rate thus far this year with an average daily rate of $292 per room. If a visiting family requires at least two rooms, their daily rate climbs close to $600 per night, compared to the most popular Airbnb multi-room listings, which average under $150 per night (according to AirDNA Data Services).
The Miami Beach City Commission will again tackle the short-term rental issue when they meet on September 14th to discuss potential amendments to the regulations for select areas on Harding and Collins avenues.
“It’s time for the Commission to do what is best for residents and Miami Beach as a whole. It’s unjust for them to be swayed by the high-tax paying commercial lodging industry and time for them to develop a short-term rental plan that includes regulation and taxation which will maintain property values, permit housing alternatives that attract tourists, and allow investors to supplement their vacation home costs with rental revenue,” said Milroy.
Commission Meeting: 3PM - Wednesday, September 14th: 1700 Convention Center Drive, 1st Floor, City Hall, Miami Beach,
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