UPDATE: Commission to Decide Fate of Miami Beach Rental Market and Tourism Economy

On Wednesday, May 12th, 2010, the Miami Beach commission will vote on an ordinance set to ban weekly and monthly rentals of condos and apartments in most of South Beach, as well as large areas of North Beach.

The ordinance would "grandfather" some short-term apartment rentals, as other Florida cities have done in single-family neighborhoods, but would exempt others who failed to obtain certain licensing or bought outside of South Beach's Flamingo Park area.

When the City's zoning code was passed in 1989, Commissioners failed to ban "the decades-old tourism niche" of short-term and seasonal apartment rentals.

As a result, these short-term rentals continued to operate and gain in popularity, drawing investors and new residents who purchased with the understanding they could rent to Miami Beach's seasonal rental market.

Currently, the City collects resort tax on short-term apartment rentals, and even senior City Officials have sanctioned the rentals in condos.

On January 21, 2007, as the super-bowl headed for Miami, the Miami Herald reported:

"Some cities, such as Miami Beach, forbid owners from renting a single-family home for less than six months. The rule doesn't apply to condos, said Hilda Fernandez, Miami Beach's assistant city manager."

Now it might apply, if this new law passes, but David Kelsey, president of the South Beach Hotel and Restaurant Association, said cracking down on short-term rentals could hurt the city's tourist industry.

"One size doesn't fit all,'' he said. "Hotel rooms are fine for most people but not everyone."

The city could also be headed for more litigation if it enforces the new law.

Christian Jagodzinski, who sued in 2007 challenging the planning department's short-term rental policy, sued again after the city passed a law last year banning the rentals in single-family homes, calling it unconstitutional. The lawsuit is ongoing in federal court.

A ban on apartment and condo rentals is expected to be even more complicated, as such properties are generally purchased and zoned as rental property.

For more information, click here to read Miami Herald Article