Planning for Growth and More Growth

Growth in Florida is expected to continue its upward trend in 2018. According to data from U-Haul, Florida was the country’s No. 2 Growth State for 2017, for the second year in a row. This is consistent with the U.S. Census Bureau’s estimates. The continuing flow of refugees from Puerto Rico (approximately 300,000 so far and counting), and the bitter cold striking the northeast this winter along with impending changes to the federal tax system that make states like Florida even more attractive to residents of states with high taxes such as New York, New Jersey, and Connecticut, further indicate that the population will continue to rise in the Sunshine State.

Some local governments are keenly focused on this, particularly as they face increasing populations on top of already heavily congested streets and affordable housing shortages. For example, Broward County’s new growth plan, Broward Next, took effect in mid-2017. Broward Next shifted the county’s emphasis on wide streets and suburban development to transit-oriented development, increasing public transportation options, and mixed-use developments. Broward is also requiring new construction to have better drainage to reduce stormwater runoff and flash flooding. The drainage regulations are based on groundwater level maps that assume a 2-foot rise in sea level by 2060. It also includes incentives for building affordable housing units. With rising populations, sea levels, and traffic volumes, such updated approaches to land use planning are timely. Will other counties follow suit?

The Right to Rent? Or, more like…. the Right to Apply for a License To Rent?

A new state-wide vacation rental law bill proposed in the Florida Senate would require vacation rental owners to apply for and pay a fee for a license in order to operate a vacation rental whether advertised on a website or not, as well as wipe out city and county vacation rental regulations now in place.

With at least three new vacation rental bills ready for debate when the Florida Legislature convenes on January 9th, vacation rental owners are going to suddenly find themselves wondering whether it would be better to be regulated by local governments, or better to be regulated by the State Division of Hotels and Restaurants and the red tape that comes with state-level regulation.

The newest vacation rental Bill (Senate Bill 1400) begins with text language describing the intent of the Florida Legislature to protect private property rights including the right to rent.  It states, “Property owners who choose to use their property as a vacation rental have constitutionally protected property and other rights that must be protected, including the right to use their residential property as a vacation rental.

However, that is not an absolute right.   Vacation rental owners will be interested to read through the rest of the proposed bill which would impose several significant conditions on “The Right To Rent” and shift complete control of regulation to Tallahassee through the Division of Hotels and Restaurants.  Here is a brief summary of the significant conditions that would be imposed by SB 1400:

  • Residential property cannot be rented as a “vacation rental” unless the owner applies for and receives a license from the State Division of Hotels and Restaurants (or will face criminal charges if renting anyway without a license). An application fee is required when submitting the application.
  • Once obtained, vacation rental licenses will have an expiration date and must be renewed every year the property is rented as a “vacation rental.”
  • The Division of Hotels and Restaurants would now be authorized to adopt additional Rules (through the state agency rule-making procedures of the “Administrative Procedure Act” (Chapter 120, Florida Statutes)) to regulate vacation rentals including adopting fee amounts.
  • Late fees can be assessed if renewal applications are submitted after the license expiration date.
  • Vacation rentals would be subject to taxes the same way that hotels or other transient rentals are taxed pursuant to Chapter 212, Florida Statutes.
  • Once obtained, vacation rental licenses must be “conspicuously” displayed somewhere on or inside the property.
  • After obtaining a license, a vacation rental must be made available for inspection by the Division of Hotels and Restaurants upon request.   The text language of the bill actually states, “Inspection of premises – For purposes of performing inspections and the enforcement of this chapter, the division has the right of entry and access to a vacation rental at any reasonable time.”    In addition, the Division will have the power to inspect vacation rentals whenever necessary to respond to an emergency.
  • Local law enforcement shall provide immediate assistance in pursing an illegally operating vacation rental.
  • The Division of Hotels and Restaurants can refuse to issue or renew a license to a vacation rental owner if in the preceding 5 years the owner was convicted of any crime reflecting on “professional character” (or convicted of drug-related crimes or prostitution-related crimes).
  • Vacation rentals that violate the new law or are operating without a license or are operating under a suspended or revoked license may be subject to a fine of up to $1,000 per offense. Each day a vacation rental is in violation counts as a separate offense. The Division of Hotels and Restaurants shall have the authority to post a prominent “Closed-For-Operation” sign on the property if an owner’s license is suspended or revoked, and the owner could face criminal charges for defacing or trying to remove it.  Not until after 12 months of suffering a suspended or revoked license, can the vacation rental owner apply to have the license reinstated.
  • SB 1400 would delete subsections 509.032(7)(a) and (7)(b) of the Florida Statutes which allow for minimal regulation by local governments and the “grandfather” provision that allow local government regulations to stay in place if they were on the books prior to June 1, 2011. This would have the effect of making all existing city and county vacation rental regulations unenforceable.
  • SB 1400 keeps the definition of “vacation rental” but adds it to Section 509.013 “Definitions.” It defines “Vacation Rental” as  “any unit in a condominium or cooperative or any individually or collectively owned single-family, two-family, three-family, or four-family house or dwelling unit that is rented to guests for periods of less than 6 months.”

Click here to see the full draft Senate Bill 1400 filed by State Senator Greg Steube of Sarasota for the 2018 Legislative Session.  Our blog post on Dec. 5, 2018 discusses two other proposed bills (HB 773 and HB 789). Stay tuned to see how these various proposals evolve throughout the Session.

Tiny Houses Gain Momentum in Florida

We have previously discussed on our blog the tiny house movement and the possibility of this growing trend ameliorating the shortage of affordable housing in the Sunshine State. The second annual Florida Tiny House Festival took place in Elkton (near St. Augustine) last month. The festival was held by the United Tiny House Association and featured dozens of tiny houses as well as workshops and house tours. Tiny houses are affordable, minimalist housing options, and tend to be more environmentally friendly including by having a smaller footprint and consuming less energy than a traditional house. However, many local governments do not recognize tiny houses in their zoning codes, posing challenges for people who would like to downsize to a tiny home. If a tiny home is mobile such as on a flatbed truck, it may be categorized as a mobile home or a recreational vehicle and therefore allowed in RV parks. But whether or not tiny homes are legal – and where in a community they are allowed, if anywhere – depends on the applicable zoning code. Continue Reading

Repairing Damaged Docks, Piers, and Seawalls After Hurricane Irma

Salvaged vessels being stacked up near Dinner Key Marina, Miami.

Waterfront properties in the Keys and on both sides of South Florida coast were hit hard when Hurricane Irma began its assault on the state on September 10. The devastation included massive damage to the docks, boat-lifts, piers, and seawalls (“bulkheads”) that offer moorings to boats along waterfront properties. More than 2,000 vessels of all types were ripped from their moorings during the storm and cast all over the coast like toys.   It’s been a little over 100 days since Irma pummeled Florida but many docks, piers, and seawalls are still in need of repair. Continue Reading

Brightline Train Launches This Month in South Florida

The country’s first private high-speed train is set to roll out this month in South Florida.  The proposed route will connect Miami to Fort Lauderdale in half an hour, and Miami to West Palm Beach in just one hour.  Train service this month will commence between West Palm Beach and Fort Lauderdale, with service expected to expand to Miami in early 2018.  The second phase of the project will connect West Palm Beach and Orlando.  Brightline is a $3 billion project that is owned and funded by All Aboard Florida, which is funding the project through tax-free bonds and by constructing mixed-use projects around the stations including retail, restaurants, and residential developments.  In October, the Florida Development Finance Corporation (a special financing unit authorized to issue tax-exempt bonds to private entities) authorized the company to sell $600 million in tax-exempt bonds to help finance the first phase of the project (the West Palm Beach to Miami leg).  All Aboard Florida has now raised the $600 million for these private-activity bonds.  Continue Reading

Florida’s “Vacation Rental” Laws To Be Readdressed in 2018 Legislative Session

Florida’s state legislators have begun filing their initial bill proposals for the 2018 Legislative Session, and it looks like the battle over local government regulation of vacation rentals (a.k.a. “short-term” rentals) will heat up again after several opposing bills either died in committee or were withdrawn last year.  On one side of the ongoing controversy are property owners who want greater freedom to use residential property for short-term rentals through website platforms like Airbnb, VRBO, HomeAway, Flipkey, and, to name a few.  On the other side are mainly: (a) local governments wanting zoning control and the ability to regulate problems supposedly caused by residential vacation rentals such as noise, parking, garbage and safety, (b) property owners’ associations and homeowners who live near or next to “short-term” rentals, and (c) the hotel industry.  At least two House Bills have been filed so far for the 2018 legislative session that affect vacation rentals, and we’ll look at those at the end of this post, but first, let’s take a look at the current status of the law. Continue Reading

Puerto Rican Evacuees Increase Pressure for Affordable Housing in Florida

More than 150,000 people have left Puerto Rico since Hurricane Maria devastated the island in September and have come to Florida.  This surpasses the number of Cubans who fled to Miami in the Mariel boatlift of 1980.  Evacuees continue to arrive and are in need of housing and other services including health care and schools.  It is reported that nearly half of the evacuees are arriving in Orlando, which is anticipated to be dramatically changed by the mass migration.  While many evacuees have been staying with relatives or in hotels, they are increasingly looking for more permanent housing.  Earlier this month, Gov. Rick Scott directed the Division of Emergency Management to activate the State Emergency Operations Center to “Level 2,” meaning that cooperation between state, local, and federal emergency management agencies will be enhanced.  This was done in response to the Federal Emergency Management Agency (FEMA) announcing that it will offer Transitional Sheltering Assistance (TSA) to Puerto Rican families who evacuated to Florida as a result of Hurricane Maria.  TSA refers to short-term lodging assistance such as covering hotel costs until the evacuees find long-term housing.  TSA offers short-term relief, but it does not solve the percolating housing problem, which continues to linger and grow while the rebuilding slowly continues in Puerto Rico, where over half of the island is still without power.  FEMA is also offering to relocate to the mainland about 3,000 Puerto Rican residents who are still living in shelters as a result of the hurricane. Continue Reading

Congress Moving on Re-authorization and Reform of National Flood Insurance Program

Just in time for Thanksgiving, the U.S. House of Representatives voted last Tuesday to approve House Resolution 2874 entitled the “21st Century Flood Reform Act.”   The Act must still pass the Senate and be signed by the President before becoming law with a current expiration date just around the corner – December 8, 2017.  But if the Act does become law, many may be giving thanks and a sigh of relief as it would extend the FEMA National Flood Insurance Program (NFIP) another 5 years by establishing a new expiration date of September 30, 2022.  However, the proposed law also makes some other significant changes to the current NFIP which could affect property owners, developers, realtors, and real estate investors throughout Florida.  So far, the Act appears to include many changes to current law, but here are two significant changes we think our readers would be particularly interested to know are working their way through the proposed legislation: Continue Reading

Facing Increased Beach Erosion, Florida Looks Internationally for Sand

Florida, like other coastal states, faces the continual challenge of how to maintain beaches in the face of increased erosion, exacerbated by sea level rise, severe storm events, and certain coastal developments. Earlier this year, the U.S. Army Corps of Engineers completed a $11.5 million dollar project to restore beaches in Florida including widening Miami Beach. In September, Hurricane Irma washed much of this away, as seen in these before and after photos. Miami Beach’s environmental director reports that the sand dunes and wider beach were effective in slowing the storm surge and retaining some of the sand. Nevertheless, Irma washed away hundreds of thousands of cubic yards of sand in Florida, and significant storms will continue to affect beaches, particularly where seawalls, jetties, and other forms of shoreline armoring prevent the beach and coastal ecosystems from migrating inland. Continue Reading

Miami Voters Approve “Sea Level Rise” Bond Initiative

On November 7, 2017, Miami voters approved a $400 million dollar general obligation bond initiative with nearly half of the bond money ($192 million) going toward infrastructure projects to specifically, “Reduce Flooding Risks; Improve Stormwater Infrastructure.”   Although the wording of the initiative on the ballot did not include the term “sea level rise,” the initiative was heavily promoted here in South Florida as a funding mechanism to pay for much needed infrastructure necessary to deal with flooding issues related to sea level rise and was dubbed “Miami Forever.”  The bond will also fund affordable housing projects and other capital improvement projects.  The breakdown of specific proposed projects and funding is featured in our previous blog on this topic from last week.  The vote split for the bond initiative in Miami’s general municipal election yesterday was 56.8% for the bond (13,621 voters) and 43.2% against (10,359 voters).  With this approval, the City can now borrow money on the municipal bond market, and the new debt will be backed by local ad valorem property taxes – which will not increase under the terms included in the ballot measure.