The Senate in the state of Florida recently passed a legislative proposal granting state authorities more regulatory powers over the short-term vacation rental market.This action targets companies like Airbnb and Vrbo, marking a significant transition from local to state-level oversight. Lawmakers throughout Florida have shown opposition to this move, showing a significant debate around the balance between state control and local autonomy in the vacation rental industry.
State Overrides Local Regulations
The state would have the authority to overrule county regulations involving short-term vacation rentals under the new bill labeled SB 280.
Despite this, regulations that were put into place before 2016 will remain unaffected. This law shows a centralized approach to managing the short-term rental market, with the purpose of standardized regulations across the state.
Dedicated Response
The legislation includes a provision that mandates all short-term rentals are required to have a designated person that is available 24/7, someone that can respond to renter complaints and emergencies.
This requirement is in place to help ensure that issues can be promptly dealt with, and improve the overall experience for renters.
New Requirements
The law will introduce multiple new requirements for short-term rentals, this will include occupancy limits of two people per bedroom, with an added allowance for two people in the common areas of the rental.
Additionally, owners will be required to register their properties with the local government. If they fail to comply with these requirements they could be faced with fines reaching $500.
Implementation Of Statewide Database And Tax Collection
The Department of Business and Professional Regulation (DBPR) has been assigned with creating a comprehensive database of all short-term vacation rentals within Florida.
In addition to this, platforms and operators, like Airbnb and Vrbo, are mandated to collect and remit specified taxes on behalf of the counties, streamlining the tax collection process from these rentals.
Enforcement And Supervision
In order to facilitate the enforcement of these new regulations, the DBPR will be recruiting nine additional officers. However, this decision has faced scrutiny from individuals like Brevard County Republican Randy Fine, who voiced concerns about the effectiveness of such a small team managing the vast vacation rental market across the state.
Fine stated, “There will be nine people – not in your homes. Not in your neighborhoods, not in your counties. Not in your cities – there’ll be nine people here in Tallahassee.”
The Vacation Rental Market In Florida
The short-term vacation rental market is a significant component of Florida’s tourism industry, since 2019 it has attracted over 100 million American tourists every year.
In just last year alone the state welcomed about 122.89 million United States tourists, showing the economic importance of this sector for the Sunshine State’s economy.
Opposition
The approval of this bill ignited significant opposition, with many pressing Republican Governor Ron DeSantis to veto the legislation.
Critics contend that the bill is giving too much control at the state level, taking away the ability for cities and counties to regulate the short-term market effectively according to their local needs and concerns.
The Economic Impact Of Airbnb’s
Airbnb produced a report of $387 million in taxes for the state of Florida in 2023 alone, highlighting the economic concern of short-term rentals.
This amount is the largest amount of tourism taxes collected by Airbnb in any state.
Reactions Of Stakeholders
Several stakeholders, such as the Florida Realtors Association and the Florida Alliance for Vacation Rentals (FAVR), have openly called on Governor DeSantis to veto SB 280.
They contend that the legislation is “a unique example of very ‘imperfect’ legislation” and emphasize the importance of maintaining a balance between private property rights and local government regulation.
Potential Impacts on Tourism
Opponents of this bill, which includes city officials and local government representatives, have voiced concerns in regards to its ability to disrupt local tourism economies and undermine local regulatory efforts.
They underscore the importance of local autonomy in addressing the unique challenges and opportunities presented by the short-term rental market in their communities.
Struggles Of Airbnb
Florida’s decision to increase oversight of Airbnb and similar short-term lodges hotel alternatives comes alongside a growing number of customer resentment around the experience they provide.
Airbnb CEO Brian Chesky said in an interview In November, that he was aware of the “tens of thousands” of complaints from its customers on social media around significant increases in the prices of Airbnb stays.
Moving Forward
The legislation is currently waiting on Governor Ron DeSantis’s decision. If he chooses to sign it into law, it would take effect on July 1, 2024, showing a marketable change in how short-term vacation rentals are regulated in Florida.
The outcome of this decision could have far-reaching consequences for the state’s tourism industry, local governance, and the short-term rental market.
Resentments Are Growing
In 2023, multiple articles with titles like “Airbnb Really is Different Now” and “Airbnb Hosting Isn’t What It Used to Be” were published by major publications like The Atlantic, Bloomberg, and others.
The main complaints of these pieces was an increased alienation between customers and hosts, and a feeling that the brand wasn’t “part of the gig economy at all.”
Rent Vs Stay
Long gone are the days of couch-surfing with a host in their personal home. It is far more common for a Airbnb customer to rent out the entirety of the home, having the space all to themselves, instead of sharing it with the hosts.
Booking a private room only made up 16% of United States short-term rental bookings in May 2023. This was considered an all-time low at the time.
Corporate Entities Take Over
Fortune reported In November that a lot of the Airbnb houses in Florida are now owned by a large private equity firm. Marking a significant transition in Airbnb hosts from traditionally owned properties to corporate overlords.
An August report from NerdWallet showed that three out of four Airbnb listings are now managed by hosts with more than one property under their ownership.
Multi-Property Hosts
As of May 2023, 30% of the active listings on Airbnb were being managed by hosts that controlled 21 or more properties. Surpassing the listings managed by single-property owners, which stood at 26% at the time.
With more short-term rental guests interacting with a company instead of a person, which could likely be a reason people’s attitudes towards their stays have soured.
Cost Effectiveness
Chesky defined the issue he saw around affordability and acknowledged the difficulties between balancing low prices for customers and suitable profits for hosts. He acknowledged “the price of Airbnbs has gone up significantly over the past five years.”
TechCrunch reported In 2023, that the average price of an Airbnb rental has gone up 36% since 2019.
Experiences Of Guest
Visitors cite the noticeable change in the experiences they have received with companies like Airbnb. Previously, Airbnb hosts would offer local recommendations and enhance the experience in a personal way a hotel could not. Now most Airbnb hosts aren’t available 24/7 to respond to issues
Jamie Lane, chief economist at AirDNA said, “There’s typically lower review scores when you’re reviewing a company rather than a person.”
Making Travel Accessible
The Ceo of Airbnb sees their hotel alternative service as a way to allow more people to travel who couldn’t before. However, in his view, Airbnb can only be in a position to do this if it maintains affordability for travelers.
Chesky said, “I think that Airbnb has always been a way to help democratize travel as you make something more affordable and more people do it.”
Renting Out A Room
Chesky listed his own spare room on Airbnb in 2022, the listing said,“Stay with me – the co-founder of Airbnb and its first host. Back in the day, my roommate Joe and I blew up some air mattresses and welcomed three guests – Michael, Kat and Amol.”
There was a catch however, there were no available dates to book until 2024, prompting criticism online. One Twitter user made the comment, “Another PR stunt Brian, no availability in a zero price tag. You yet again delivered something unattainable.”
Brand For Youth
To reinforce his point about affordability, Chesky discussed how he imagined the brand being for young people as one of the reasons it needs to remain affordable.
Chesky said, “Airbnb has always been a brand for young people. I was 26 when I started this company…I want to know in my heart that the 26-year-old me if they were alive today they would still use Airbnb, and if that’s true then they would have to be affordable.”
Financial Viability
Chesky founded Airbnb in 2008 with Nathan Blecharcyk, and Joe Gebbia. Despite the company being founded almost two decades ago, the company didn’t see profit until 2022.
In a statement issued in 2023 they shared that they had a revenue of $8.4 billion that had grown 40 percent year over year. “Net income was $1.9 billion—making 2022 our first profitable full year on a GAAP basis,” the statement said.
Florida Division
The introduction of the new Florida provision aimed at short-term rentals has Florida residents divided. Some view it as a good move because the rental rental industry is taking homes away from residents that need them. It is also causing housing prices to reach amounts that most can’t afford.
However, some see the property rental as a significant source of revenue stream and are not keen to have the government come in and tell people how to run their businesses. They see it more as an infringement on their rights.
