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Never-ending battle between Airbnb and Miami Beach


Miami is one of the top-5 Airbnb destinations in the United States. It sounds like a great deal for everyone... Hosts get a profitable output of their investment and their guests get a more private and wide list of options where to stay. However, this is not the same point of view for the City Commission of Miami-Dade County, which has been enacting fines of $5,000 up to $20,000 when renting on this kind of platforms. Even though it has been a problem all around the city, Miami Beach has suffered the most.

Fines depend on the type of legal breach that has been committed. Hosts who don't submit a sworn statement of fact voluntarily that their property is located in an Airbnb-approved zone will have to face a punishment. This wasn't really taken seriously by landlords, which was the reason why the government decided to increase the penalty from $1,000 for each violation in 2015, to $20,000 for the first unlawful act (which can increase up to $100,000 depending on the number of offenses)!

What was the impulse of this great leap? Mainly it is the city of Miami Beach trying to do what they did in 2010 with the $1,000 fine. Almost a decade ago, the government was receiving a large list of complaints from neighbors of units that were used for short-term rentals due to noisy parties and public nuisance. Not to mention the hotel industry pushing the government to intervene. The answer from the City Commission was to create the $1,000 fine for each violation. Nowadays the same problem is occurring, and that's why the jump to $20,000/violation.

As a consequence of this government decision, condos in the prohibited Airbnb areas are getting harder to sell. Even more, knowing that there are some other condos that have been Airbnb-approved such as the Setai condo , or the W residences condo, which will clearly have a better return for real estate investors. This has affected properties under the five million dollars (mainly small condos and single-family homes). Most of the buyers that invest in Miami are looking for a second or third home, and the fact that they can't rent it when they are not using it is definitely a deal-breaker.

The problem the city is facing now is that owners are still doing short-term rentals, but they are just hiding it. The government is mislaying a big amount of tax revenue with these unreported rentals. It has been beneficial for the "few" risky owners that decide to post their place on Airbnb or VRBO, as the ban has pushed supply down, so landlords can charge a higher fee. Small Art-Deco condos have been extremely affected too, as their design from 1950 - 1960 was willing to feature short-term stays. These condos are now competing to modern and bigger condos for the same market, which clearly creates an incongruity where Miami Beach historic buildings are in a great disadvantage.

The solution that the government is proposing wasn't a good solution back in 2010 and is not a good solution nowadays. Landlords will continue to take the risk of renting their properties for short-term and creating higher fines won't stop them. New solutions are required soon.

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