Miami Beach fined short-term rentals $1.6M over the last five months

Miami /
Aug.August 24, 2016 04:50 PM

Updated, 9 p.m., Aug. 24: The city of Miami Beach is sending a message to those breaking its short-term rental violations: pay up.

From March to mid-August, fines issued by the city for short-term rental violations total $1.59 million, according to a public letter to the Miami Beach City Commission from City Manager Jimmy Morales. Those fines start at $20,000 for first-time violators, then double, and then triple for subsequent violations.

City and county leaders have grappled with issues related to short-term rentals. In Miami Beach, city code allows for vacation and short-term rentals (less than six months and one day), in certain zoning districts. But, they are banned in all single-family homes and in a number of zoning districts. See a map here. Fines previously ranged from $500 to $7,500 but rose after the commission voted to increase them in December.

In 42 of the 106 cases cited in Morales’ letter, short-term rental advertising companies, including Airbnb, Homeaway.com and Booking.com, were also fined. At least two code enforcement officers are dedicated to short-term rentals, Morales said earlier this year.

Julian Johnston, a luxury broker in Miami and Miami Beach, said the increased fines have affected the luxury rental market in Miami Beach. He said the typical single-family home renter is a large family, up to 15 people, that doesn’t want to stay in a hotel, or celebrities looking for privacy.

“The short-term rental market is moving off the beach,” Johnston, head of Calibre International Realty, told The Real Deal. ” You can’t advertise anymore.”

Among the violators? Real estate investor/developer Jon Shields, architect Robert Swedroe, New York investor Simon Itah, and a number of LLCs.

Reed Zaroff, a veterinarian and real estate investor, owns the five-bedroom, 3,588-square-foot house at 244 West Rivo Alto Drive. Zaroff has been fined repeatedly by the city for illegally renting out his waterfront home: on May 21 for $20,000, June 15 for $60,000 and June 16 for $80,000. Jamey Kolka, CEO of the luxury vacation rental company SoBeautiful Lifestyle, was also fined $60,000 in June. His company was also fined $20,000 in May for the same home.

In all, the Venetian Islands house has racked up $260,000 in fines.

At 2502 Prairie Way, Monsant LLC and Innove Investment Group LLC were fined twice at $20,000 a pop for the unlawful advertising of a short-term rental and for illegally renting the house, a four-bedroom, 3,469-square-foot house that was built in 1950. It’s listed for sale, asking $1.95 million.

And still on the market for rent is the six-bedroom, 3,400-square-foot townhouse at 1545 Meridian Avenue. The city fined Daniel Sehres $20,000 in March, $40,000 in May and $60,000 in August – totaling $120,000. A Trulia listing shows it’s available for rent for $5,500 a month.

The house at 2232 Alton Road amassed fines totaling $205,000 during the month of May. Airbnb, Miami World Rental LLC and Gleason Properties LLC are the violators, according to the city’s list of rental citations. (The eight-bedroom, 7,400-square-foot house has been described as a former home of Jackie Gleason, but his family disputed it.)

For Airbnb, Miami is one of its biggest markets. In 2015, more than half of Florida’s 16,100 Airbnb hosts were in South Florida, including nearly 8,000 hosts in Miami/Fort Lauderdale. A report released in July shows the short-term rental giant grew by 120 percent in Miami and Fort Lauderdale.

Among the concerns of residents, municipalities and hotels are regulating and taxing short-term rentals, especially in a municipality like Miami Beach were zoning will likely remain unchanged.

An Airbnb spokesperson said the short-term rental platform is part of Miami Beach’s tourism ecosystem.

“We are working to voluntarily pay our fair share of county transient occupancy taxes, and we have been paying the state tourist and sales taxes since December 2015,” the spokesperson said in an email statement. “We look forward to working with community leaders and stakeholders in the coming months to create fair rules for home sharing.”

The first round of appeals for violations is scheduled for a special master hearing on September 19, according to public documents.

The Miami New Times first reported the fines.


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