Other commissioners stress need for program to pay for itself
With Sarasota City Commissioner Erik Arroyo in the minority, the board members have voted 4-1 to increase fees and make other adjustments to the Vacation Rental Home ordinance that they originally approved in 2021.
The program, which was approved on May 4, 2023, applies only to homes on the barrier islands.
As the Agenda Request Form for the Sept. 5 regular commission meeting noted, the general purposes of the regulation of vacation rentals are to ensure that city residents have “the tranquility and peaceful enjoyment of their homes and neighborhoods; to mitigate incompatibilities between vacation rentals and resident occupied homes and to protect the health, safety, and welfare of the occupants of vacation rentals and their guests and to encourage them to be respectful of the residents of the neighborhood in which they are vacationing.”
The registration process began on Jan. 3, 2022.
Even though the focus of the Sept. 5 public hearing was the proposal for raising the fees associated with the program, a number of city residents took the opportunity to implore the commissioners to implement the regulations citywide. That topic is planned for the Oct. 2 meeting agenda, City Manager Marlon Brown indicated.
During the discussion about staff’s recommendation for the fee increases, both Vice Mayor Liz Alpert and Commissioner Jen Ahearn-Koch stressed their belief that the program should pay for itself, instead of city taxpayers having to subsidize the expenses that city staff incurs in enforcement of the original ordinance.
Ahearn-Koch emphasized that Chris Goglia, president of the St. Armands Residents Association, had sent the commissioners a letter with details about a survey that he had undertaken, in regard to the vacation rentals. He found that “over 70% of the hotel houses on the islands are owned by [limited liability companies located out of state],” she pointed out. Seventy percent [of the vacation rentals revenue “is going out of our city, out of our region and out of our state,” Ahearn-Koch emphasized. The issue before the board, she added, is “the commercialization of the neighborhoods. And these fees are very specifically about making the program pay for itself and not putting the burden on the citizens.”
“I’m for having us recoup all of our costs,” Alpert said. The owners of the vacation rental houses “make a lot of money,” she added. That is why they build and rent out the homes.
The changes in the fee schedule are as follows:
- The registration fee for a vacation rental house on the barrier islands will rise from $250 to $500.
- Instead of a biennial renewal fee of $150, an annual fee of $350 will be charged.
- The initial re-inspection fee for a house will climb from $50 to $100. If second and third re-inspections are necessary, the cost will double, from $100 to $200.
- The fee for a late payment will rise from $100 to $200.
- If a new owner takes over a vacation rental house, the fee for updating the city’s records will double, from $100 to $200.
Diane Kennedy, the city’s code compliance manager, and Hannah Chabica, a code compliance specialist, provided a PowerPoint presentation for the board members as they discussed the proposed increases.
Chabica pointed out that the annual inspections cover issues such as pool and fire safety and ensuring that the required information about the owners or property managers is up-to-date, so the appropriate individual can be contacted if a problem arises.
The total annual expenditures for the program add up to $130,688.99. Of that, she continued, the city’s staff expense is $80,222.99, which includes her salary and one-third of the salary of an administrative specialist who assists with the work. The city also pays $50,466 a year for the Granicus third-party software that staff uses to track compliance with the program.
The city’s revenue for the first year of the program was $36,352, Chabica told the commissioners.
If the city were to use fee revenue to cover all of the program expenses, the annual renewal for the owner of a vacation rental property would need to be $968.06, a chart showed.
A series of questions from Arroyo
Commissioner Arroyo started out by asking what had prompted the discussion. “Who is bringing this forward, telling staff to do this?”
City Manager Brown responded, “It came from me looking at the cost for the program” and how much money the city is receiving.
He reminded Arroyo that the revenue issue also had come up during the commission’s budget workshops in late July. “All of the detail is in the backup of this agenda item, as well,” Brown noted.
Then Arroyo asked about the impetus for switching from biennial inspections to requiring them on an annual basis. “The main driving force,” he said, “it’s more money.”
Brown once more referred Arroyo to the agenda packet materials on the item. Annual inspections are required in adjacent communities, Brown pointed out. “We looked at as many jurisdictions as possible, but this is all to recoup the cost associated [with the inspections].”
Later, in response to questions from Commissioner Debbie Trice, Kennedy of Code Compliance explained that when staff undertakes an initial inspection of a vacation rental property, the staff member gives the appropriate person a list with any items that need to be corrected, to come into compliance with city regulations.
Responding to a follow-up question from Vice Mayor Alpert, Kennedy said that during the time the program has been in effect, “We have come across many residences [with] illegal work. Once we do the inspection, [people] go in and take out the pool alarm, or they take down the baby barrier. We have various safety [measures] that we’re looking for.” She then emphasized that ensuring safety of guests is the rationale for the inspections.
Arroyo also inquired about the $50,000 the city pays each year to the Granicus software company, indicating that the funds were used just to cover the cost of handling details related to the 135 vacation rental homes. (That was the count as of Sept. 5.)
Brown explained that the software also is used to track vacation rentals in the portion of the city on the mainland. Granicus will alert city staff if a property owner is renting a home for less time than the seven-day minimum specified in the city’s Code of Ordinances.
Arroyo next pointed out that the city pays $80,000 for staff to deal with 135 vacation rentals approved for two years. Dividing the number of rental applications by 24 months equals 5.6 a month, he said. “We don’t have anybody in the entire city that can process five applications a month, essentially?”
Kennedy of Code Compliance responded that the Granicus software “does all of the ‘web crawling’ ” — the searches on the internet to try to find illegal vacation rentals. “We don’t have the resources to web crawl,” she told Arroyo. “I think it’s really important to realize that they provide a really good service. They feed all of our data.”
Arroyo asked Brown another question: “How bad is the issue — I’m not going to say, ‘hotel houses,’ because that is a very specific type of short-term rental.” Arroyo then asked whether arrests are made for violations of city regulations and whether people are cited for noise complaints.
Brown called on Chabica to explain a typical day for staff, in regard to handling the vacation rentals, plus the types of issues that the staff addresses on a regular basis.
Chabica explained that she is the primary staff member handling vacation rental compliance with city regulations. She reviews new applications, completes on-site inspections, handles payment reconciliation, and works with the Granicus system developers in regard to the portal that the city makes available for people to apply for the program, she said. “We essentially brought [on] a new program from the ground up.”
Letters can be sent through that system, Chabica continued, which means staff does not have to manually complete letters about code compliance and put them in the mail. “We can send as many letters as we want.”
She added that she also handles phone calls and walk-in customers.
Staff does receive complaints about vacation rentals, Chabica said. Some people prefer not to give their names, she explained, though state law requires their names and addresses, or a complaint cannot be lodged formally.
“What are the complaints normally about?” Arroyo asked.
Often, they deal with guests partying, leaving trash out or creating parking problems in neighborhoods, she replied. Staff gets calls about those situations both on the barrier islands and on the mainland, she said.
Because she has forged a good working relationship with the managers of the vacation rentals on the islands, Chabica added, she usually can resolve a problem by talking with the appropriate manager; that prevents the need for the city to issue a Notice of Violation.
Chabica told Arroyo, “I can say objectively that we’ve had good success with compliance on the barrier islands since we launched this program.”
“It’s compliance with a program we created,” he replied. “What do any of the proposed changes [do to] prevent parking, trash or parties? That’s not being addressed in the [proposed] ordinance,” he pointed out. “We’re just increasing fees because we have a program that’s very expensive and not enough users, I guess, for the staff and manpower it takes to make this program run. There has to be a better way, I think.”
City Manager Brown responded, “It’s a policy decision.” The funds the revised fee schedule would generate would not cover the costs, either, he added. “We’re not even near there. … If the commission in its wisdom believe this is too onerous for the vacation rental management companies … the general taxpayers would be picking up the cost.”
Over on the mainland …
Six members of the public addressed the commission during the hearing. Only one of them — Max Brandow, vice president of advocacy and member programs for the REALTOR Association of Sarasota and Manatee — opposed the fee increase.
“We don’t want loud parties, trash, parking, all that to go on in the neighborhoods we sell,” Brandow pointed out. “Unfortunately, this ordinance doesn’t address any of those issues.”
He also complained that the fees will be doubled, and he contended that the inspections will not prevent the issues that disturb residents.
Moreover, Brandow said, “The city has provided no data, no background, on why vacation rentals are inherently more dangerous [than other homes].”
“The bad apples,” he added — the operators of “nuisance properties” — will have no financial incentive to adhere to the city regulations. “They are just going to go underground.”
Richard Harris, president of the Coalition of City Neighborhood Associations of Sarasota (CCNA), expressed his organization’s support for the fee adjustments. He added that he and other members of the organization “will be back when it comes time to promote [this program] to go citywide.”
Flo Entler, president of the Arlington Park Neighborhood Association, also called for including the mainland in the vacation rentals program.
She noted that Commissioner Arroyo has been the only member of the city board to oppose the program’s expansion, even though he represents District 3, where vacation rentals have become a growing problem.
Entler cited statistics that Ron Collins, a city resident with expertise in demographics and statistical analysis, provided recently to the commissioners. Collins wrote that he had found that 70% of the short-term rental units in Arlington Park advertise a stay shorter than the legal minimum of seven days. “Fifty-six percent offered stays of three days or less,” Entler added, and “over 80% have failed to file to pay the required business tax.” Further, she said, “Over 70% have failed to file for the required vacation rental license from the [Florida] Department of Business and Professional Regulation.”
Entler also noted that Collins had found that the owners of one in five rental units not owned by corporations claim a full homestead exemption,” which violates state law. “The city is losing a lot of property tax revenue.”
Moreover, Entler stressed, “Half of the single-family homes in Arlington Park are less than 100 feet away from short-term rental property. Not only are the single-family neighborhoods losing their affordable housing, but these commercial businesses within our neighborhood are affecting our quality of life.”
Then she cited fees for some of those Arlington Park rentals, noting amounts from $4,000 to $12,000 a month. The owners, she pointed out, “can afford to pay the [vacation rental program] fees.”