Vacation property owner threatens to sue City of Sarasota

Written by on Friday, November 10, 2023

The move could throw a wrench into efforts to regulate short-term rentals.

By Ramon Lopez

Original Air Date: Nov. 10, 2023

Host: Vacation rentals are taking over entire neighborhoods in sunny Sarasota, and that is not good news for many people who live and work here. The City of Sarasota is now trying to get a handle on short-term rentals, but a backlash is brewing, in the shape of lawsuits by property owners. Ramon Lopez reports.

Ramon Lopez: The City of Sarasota has been notified of three claims under the Bert J. Harris Private Property Rights Protection Act. The Harris Act provides a property owner the means to sue a local government, if it has adversely impacted their property. The claimant, with three large vacation rentals – so-called hotel-houses – on Lido Key, says the maximum occupancy limits in the city’s vacation rental ordinance has cost him $4.6 million in lost rental income. The owner of the property has served notice on the City of Sarasota of a pending lawsuit filing.

Sarasota has to notify the claimant, in turn, whether or not it will fight the lawsuit or settle out of court. At issue is the fact that all three properties can accommodate 16 people, but the city ordinance allows fewer occupants. The claimant has offered the city a compromise settlement that would forgo filing of the lawsuit. It would allow for 16 adults with greater city oversight to keep things under control. The Sarasota city commissioners at Monday’s hearing discussed the issue.

Three options on the table include a settlement that will permit the owners to operate at their capacity, in exchange for a higher level of scrutiny. A second discussed option would allow them to operate at capacity, with a step-down over three years until meeting ordinance compliance. The third option would let the matter go to court. City Attorney Robert Fournier suggested Option One as a counter-offer. And back on Oct. 2, the commissioners voted unanimously to go to litigation, should owners decide to file suit.

There was much discussion at Monday’s meeting. Commissioner Jen Ahearn-Koch was concerned that one-off exceptions to the ordinance might open the floodgates to many more. And the commissioners said a new citywide ordinance to expand the existing vacation rental rules to be discussed in early 2024 might impact this particular problem. The commissioners, in the end, unanimously decided not to decide. They did not rule on the claimant’s settlement offer and kept open the option to fight a future lawsuit. They said the matter will be addressed at a future meeting, probably after the first of the year, when the dust settles.

Commission votes to raise fees

Meanwhile, the Sarasota City Commission on Monday voted four to one to raise the fees paid by vacation rental house owners to operate. The higher fees will now apply to about 130 vacation rentals on the barrier islands. But the City of Sarasota is considering making its vacation rental regulations apply to the entire city, potentially affecting over 700 or so vacation rental properties. That would happen after the first of the year. Many Sarasota city residents mad about the growth of short-term rentals in their mainland neighborhoods favor expansion of the regulation city-wide.

The city commission created an ordinance in 2021 that requires the owners of vacation rentals on barrier islands to register with the city. The owners paid a $250 application fee and a biennial renewal fee of $150. The properties must be inspected biannually. The owner must have someone available by phone 24 hours a day to respond to complaints.

But the city commission decided that the original fees did not cover the actual cost of running the program. It increased the initial application fee to $500. The renewal fee is now $350 and will be assessed every year. Inspections will now take place annually. The inspection fees went up as well, as did some other fees. Commissioner Jen Ahearn-Koch backs the fee hikes.

Ahearn-Koch:  I just want to be crystal clear. This does not apply to homeowner-occupied AirBnb’s. This is not the small person in our community that’s just trying to make some money to help pay their mortgage, or make a little extra money to do the roof repair. This does not apply to them at all. This is targeted at our city being able to recoup the money that we spend in inspecting and creating this registry program to protect our neighborhoods and our communities from these massive hotel houses.

RL: But Commissioner Erik Arroyo cast the one nay vote. He questioned management of the fee program and who it will apply to.

ArroyoAnd I’m just going to, for the record, voice my opposition to this proposed ordinance again. We are increasing just fees all across the board, and we are making it so that, instead of every two-year inspection, we now inspect individuals’ homes every year. But there’s no rational connection between what the inspection is supposed to yield. This is going to affect people who are … just small, getting started, and trying to make a living in a world where everything has skyrocketed.

RL: This is Ramon Lopez for WSLR News.

WSLR News aims to keep the local community informed with our 1/2 hour local news show, quarterly newspaper and social media feeds. The local news broadcast airs on Wednesdays and Fridays at 6pm.