Airbnb bounces back on the beach

After a Florida appeals court ruled that Miami Beach’s fines for violations of its short-term rental laws – which in most cases exceeded $15,000 – were unenforceable, Airbnb hosts have seen the local industry bouncing back.

The idea that the company will be successful on a national scale was reinforced by the recent overwhelmingly successful initial public offering of the firm’s stock.

Though a judge decided last year that Miami Beach’s $15,000 fines for violations of its short-term rental laws were exorbitant, city officials continued to levy hefty fines through the summer and into the fall while it appealed to the lower court’s ruling. On Oct. 14, the Third District Court of Appeal stopped the practice, saying it contradicted state law.

“People will start to take the risk of renting Airbnb and risking the fines,” said Sebastian Giraldo, a South Florida real estate agent, broker and owner of Airbnb rentals. “There are homes rented for more than $1,500, $2,000 a night, and that is more than the amount of the fines.”

Giraldo, who is also the organizer of a monthly Airbnb Hosts Miami meetup, which has around 200 members, said the fines were outrageous.

“It’s great that the fines are now reduced,” he said. “Not just for the hosts, but also for the city because it’s a manageable number. I have friends who had fines of tens of thousands of dollars and they would never be going to pay them.”

People were losing money, he said, both in rental income and property value. Now, with the decline in short-term rental supply because of the COVID-19 pandemic, a great number of owners have sold their properties.

Giraldo said there has been a steep decline in the number of people interested in the local short-term rental market.

“Right now, the city and all the hotels have been affected so much because of the fact that there are no events,” he said.

The city has issued 71 such citations, since the beginning of the year, equating to almost $1.9 million in fines, according to a September report from spokeswoman Melissa Berthier.

Since the Miami Beach ordinance banning short-term rentals was passed in March 2016, the city has collected about $841,000 in fines. More than 60 property owners appealed their cases before the October ruling, not counting the $8.4 million in fines from those who have simply ignored the citations.

The law prohibits rentals of fewer than six months in specific areas on the city, according to the Code Compliance Department of Miami Beach. In accordance with state law, a first-time violation now has a cap of $1,000, increasing to $5,000 for fourth and later citations.

From an average of 156 zoning violation fines each year during the last four years, Miami Beach has experienced a reduction of 54% in fines.

“The number of violations has fluctuated due to COVID-19 and the ever-changing short-time rental restrictions found in the Emergency Measures throughout the pandemic,” Berthier said in a statement.

She also said the new ruling makes no changes to the short-time rental provisions except for the fine schedule that now has to be in accordance with the state cap of fines.

Under the law, short-term rentals are only allowed east of Collins Court, from North Beach to South Point. The maximum number of guests allowed is two guests per bedroom, with a maximum of four per unit or a family of up to six people.

The city prohibited all short-term rentals on July 15 due to an increase of COVID-19 cases in Florida. Short-term rentals operating under condos and hotels were allowed to accept guests Aug. 22 with permission from the city. But the overall ban on short-term rentals has not been officially lifted under the Phase 2 Reopening Order and Emergency Measures of Miami Beach, although they are now permitted in Miami-Dade County in general.

“This pandemic has gone on for a year now,” said Giraldo. “But in the long term, it’s going to be a blink in the chart. It did affect many people, but the ones who stick through it and made it through, even if they had to slim and trim their operations, will survive this.”

During the first six months of the year, Airbnb reported a revenue loss of $741 million, a 67% loss from the amount earned last year, according to a report by Bloomberg.

“At the end, Miami Beach is Miami Beach,” said Giraldo. “It’s still a world-wide destination and people are not going to stop coming. I am confident that, once the pandemic is over, we are going to be able to raise our rates like in times when Airbnb was fairly new, and people were making a lot of money renting.”

Caplin News Contributor

Monica L. Correa is a journalism student with a strong passion for social issues, international law and politics. Correa has a background in Spanish literature and hopes to become a voice for her community.