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2012-3758 Ordinance "SHORT TERM RENTAL OF APARTMENT UNITS OR TOWNHOMES" Flamingo Park Neighborhood ORDINANCE NO. 2012-3758 AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING THE LAND DEVELOPMENT REGULATIONS OF THE CODE OF THE CITY OF MIAMI BEACH, BY AMENDING CHAPTER 142 OF THE CITY CODE, "ZONING DISTRICTS AND REGULATIONS," ARTICLE IV, "SUPPLEMENTARY DISTRICT REGULATIONS," DIVISION 3, "SUPPLEMENTARY USE REGULATIONS," BY AMENDING SECTION 142-1111, "SHORT TERM RENTAL OF APARTMENT UNITS OR TOWNHOMES," TO ALLOW AN EXTENSION OF TIME FOR APPLICATIONS DUE TO GOVERNMENTAL ERROR; PROVIDING FOR REPEALER, SEVERABILITY, CODIFICATION, AND AN EFFECTIVE DATE. WHEREAS, the City Commission has determined through the adoption of ordinance no. 2010-3685, among other things, that there is a potential for harm if transient rentals are permitted without regulations protecting against adverse external effects of such use or prohibited in certain instances; that multifamily or townhome unit owners' sense of community and privacy would be compromised by unregulated and unrestricted commercial and transient use of units in multifamily buildings and neighborhoods; that multifamily or townhome unit owners have reasonable expectations of a community of permanent neighbors and owners and the privacy such a community entails; that the privacy and ambience of such multifamily or townhome residential buildings and areas are materially undermined by unregulated and unrestricted transient rentals; that the values associated with multifamily or townhome residential areas can only be preserved by very limited and controlled commercial and transient use of residences, if at all; and WHEREAS, based upon the factors listed above, any relaxation of the current land development regulations with respect to short term rentals in multifamily zoning districts had to be limited in size and scope to specifically defined neighborhood areas, and deemed that within the Flamingo Park and Espanola Way Historic Districts, a limited number of short term rental uses, which can demonstrate a current and consistent history of short-term renting, may be approved by the City under certain specified conditions, if subject to regulation that would protect the enjoyment, character and value of apartment or townhome residential neighborhoods, buildings and units; and WHEREAS, the City Commission found that such regulations are consistent with and further the public health, safety and welfare of the City and adopted Ordinance No. 2010-3685 on June 9, 2010 wherein short term rental of apartment units or townhomes under certain specified conditions is permitted; and 1 of 3 WHEREAS, an owner of a short term rental property in the Flamingo Park neighborhood who otherwise qualified under the ordinance sought to apply for the appropriate city licenses, but was denied the opportunity due to a license processing error by a state governmental agency; and WHEREAS, the amendment proposed herein is necessary to allow the appropriate city licenses to be issued overcoming the other governmental license error; and WHEREAS, the City Attorney has opined that this amendment would not jeopardize the status of City Ordinance 2010-3685 creating section 142-1111, which was grandfathered under Section 509.032(7)(b), Florida Statutes (2011). NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: Section 1. City Code Chapter 142, "Zoning Districts and Regulations," Article IV, "Supplementary District Regulations," Division 3, "Supplementary Use Regulations," Section 142-1111, "Short Term Rental of Apartment Units or Townhomes" is hereby amended as follows: Sec. 142-1111. Short Term Rental of Apartment Units or Townhomes. (c) Time periods to apply for short-term rental approvals. (1) Owners demonstrating compliance with subsections (b)(1) or (2) above, shall apply for a certificate of use permitting short-term rental as detailed in subsection 142-1111(d) within a time period of six months from the effective date of this section (June 19, 2010), or be deemed ineligible to proceed through the process specified herein for legalization of short-term rentals. (2) Within three months of the effective date of the ordinance enacting this section (June 19, 2010), eligible owners shall apply to obtain all necessary approvals to comply with the Florida Building Code, Florida Fire Prevention Code and with all other applicable life safety standards. (3) Compliance with the applicable requirements of the Florida Building Code and Florida Fire Prevention Code, shall be demonstrated by October 1, 2011, or rights to engage in short-term rental under this section shall be subject to restrictions and/or limitations as directed by the building official and/or fire marshal. This subsection shall not prevent these officials from undertaking enforcement action prior to such date. L4) Applications under this Ordinance may be accepted until 60 days after adoption of this subsection (adopted on April 11, 2012; 60 days expires June 11, 2012), upon demonstration to the Planning Director that a government licensing error prevented timely filing of the application. 2 of 3 Section 2. Repealer. All ordinances or parts of ordinances and all section and parts of sections in conflict herewith be and the same are hereby repealed. Section 3. Codification. It is the intention of the City Commission, and it is hereby ordained, that the provisions of this Ordinance shall become and be made part of the Code of the City of Miami Beach, as amended; that the sections of this Ordinance may be re- numbered or re-lettered to accomplish such intention; and that the word "ordinance" may be changed to "section" or other appropriate word. Section 4. Severability. This ordinance is severable; if any provision hereof is held void or unconstitutional in a final decision by a court of competent jurisdiction, the balance of the ordinance, and the remainder of Ordinance 2010-3685 creating City Code section 142-1111, shall remain valid. Section 5. Effective Date. This Ordinance shall take effect ten days following adoption. PASSED and ADOPTED this 11th day of Aril 2012. MAYOR A ST: �­ r CITY CLERK APPROVED AS TO FORM �P. AND LANGUAGE AND FOR EXECUTION * INCORP ORATED' '9.4CH 26,E 1 y Attorney ate First Reading: Seco Re din . Ve i d 8 . Richard G. Lorber, AICP Acting Planning Director TAAGENDA\2012\2-8-12\Short term rental ord.docx 3 of 3 COMMISSION ITEM SUMMARY Condensed Title: Amending Section 142-1111, "Short Term Rental Of Apartment Units Or Townhomes," To Allow An Extension Of Time For Applications Due To Governmental Error. Key Intended Outcome Supported: Maintain strong growth management policies. Supporting Data (Surveys, Environmental Scan, etc.): While nearly half, 47.6%, suggested the effort put forth by the City to regulate development is"about the right amount," nearly one-third, 29.6%, indicated "too little"effort is being put forth by the City in this area. Issue: Should the City Commission amend the City Code to allow an extension of time for applications for short term rental due to governmental error? Item Summa /Recommendation: SECOND READING PUBLIC HEARING The owner of 751 Meridian Avenue submitted an application to the Florida Department of Business & Professional Regulation (DBPR), Division of Hotels and Restaurants in September 2009 for a Transient Apartment license. Through an error by DBPR, the application was processed as non transient, rather than a transient license. The property has also been issued a resort tax account by the City. When the City adopted the "Short Term Rental of Apartment Units or Townhomes" ordinance allowing such rentals in the Flamingo Park Neighborhood, the owners of 751 Meridian Avenue were not able to obtain the required Certificate of Use to comply with the restrictions in the ordinance due to the State error when issuing the license, nor were they notified of the applicable deadlines and did not become aware of the deadlines until they had passed. At the September 21, 2011 LUDC meeting, the Committee discussed this issue and by a vote of 3-0, moved to refer an amending ordinance to the Planning Board, but with the restriction that an extension of time be limited to 60 days after adoption of the ordinance and only because of governmental error in issuing the proper license. The Administration recommends that the City Commission adopt the proposed ordinance on second reading public hearing. Advisory Board Recommendation: At its December 13, 2011 meeting, the Planning Board reviewed the proposed ordinance and by a vote of 4-1 2 members absent recommended that the City Commission approve the ordinance. Financial Information: Source of Amount Account Funds: 1 - 2 3 OBPI Total Financial Impact Summary: In accordance with Charter section 5.02, which requires that the "City of Miami Beach shall consider the long-term economic impact (at least 5 years) of proposed legislative actions," this shall confirm that the City Administration evaluated the long-term economic impact (at least 5 years) of this proposed legislative action, and determined that there may be a measurable impact on the City's budget by enacting the proposed ordinance as there should be a slight revenue increase in Resort Taxes. City Clerk's Office Legislative Tracking: Richard Lorber/Mercy Lamazares Sign-Offs: epartment DireE;su Abc, istant City anager City Manager T' ENDA12012\ -11-12\Short term rental ® MIAMIBEACH AGENDA ITEM R5D E 1- G GM AA1AAA1 BEACH City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: April 11, 2012 SECOND READING PUBLIC HEARING SUBJECT: Short Term Rental of Apartment Units or Townhomes AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING THE LAND DEVELOPMENT REGULATIONS OF THE CODE OF THE CITY OF MIAMI BEACH, BY AMENDING CHAPTER 142 OF THE CITY CODE, "ZONING DISTRICTS AND REGULATIONS," ARTICLE IV, "SUPPLEMENTARY DISTRICT REGULATIONS," DIVISION 3, "SUPPLEMENTARY USE REGULATIONS," BY AMENDING SECTION 142-1111, "SHORT TERM RENTAL OF APARTMENT UNITS OR TOWNHOMES," TO ALLOW AN EXTENSION OF TIME FOR APPLICATIONS DUE TO GOVERNMENTAL ERROR; PROVIDING FOR REPEALER, SEVERABILITY, CODIFICATION, AND AN EFFECTIVE DATE. ADMINISTRATION RECOMMENDATION The Administration recommends that the City Commission adopt the proposed ordinance in its current, limited form. The Administration does not support expanding the scope of the proposed ordinance. BACKGROUND This item was referred by the City Commission to the Planning Board at its October 19, 2011 meeting (City Commission item C4A), following an earlier referral to and review by the Land Use and Development Committee at its September 21, 2011 meeting, at the request of Commissioner Expbsito (May 11, 2011 City Commission Item C4D). The item seeks a recommendation on a proposed amendment to the recently enacted Ordinance 2010-3685, "Short Term Rental Of Apartment Units Or Townhomes - Flamingo Park Neighborhood," which contains provisions and regulations governing those properties to be legalized for short term rental in that neighborhood. The time periods specified in the ordinance are as follows: Time periods to apply for short-term rental approvals. (1) Owners demonstrating compliance with subsections (b)(1) or (2) above, shall apply for a certificate of use permitting short-term rental as detailed in subsection 142- 1111(d) within a time period of six months from the effective date of this section (June City Commission Memorandum Short term rentals April 11, 2012 Page 2 19, 2010), or be deemed ineligible to proceed through the process specified herein for legalization of short-term rentals. (2) Within three months of the effective date of the ordinance enacting this section (June 19, 2010), eligible owners shall apply to obtain all necessary approvals to comply with the Florida Building Code, Florida Fire Prevention Code and with all other applicable life safety standards. (3) Compliance with the applicable requirements of the Florida Building Code and Florida Fire Prevention Code shall be demonstrated by October 1, 2011, or rights to engage in short-term rental under this section shall be subject to restrictions and/or limitations as directed by the building official and/or fire marshal. This subsection shall not prevent these officials from undertaking enforcement action prior to such date. The deadline for applications to legalize short-term rentals has now passed. Eligibility for this provision was determined by a specific set of criteria; for apartment buildings of four or more units, or for four or more apartment units in one or more buildings under the same resort tax account, the criteria are as follows: In order to demonstrate current, consistent and predominant short-term renting, the property must comply with all of the following: a. Have been registered with the city for the payment of resort tax and made resort tax payments as of March 10, 2010; and b. Have had City of Miami Beach Resort Tax taxable room revenue equal to at least 50 percent of total room revenue over the last two-year period covered by such payments; and C. Have been registered, with the State of Florida as a transient apartment or resort condominium pursuant to Chapter 509, Florida Statutes, as of March 10, 2010. After these criteria were developed, staff identified all those properties that would qualify under these provisions, and developed a list of these properties for review by the Commission during the process of adoption. After the ordinance was adopted, a letter was sent to those properties on the list informing them of the passage of the ordinance and the requirements and deadlines associated with the new provisions. Recently, Mr. Simon Ferro, attorney for the owners of the apartment building at 751 Meridian Avenue made inquiries at the Planning Department regarding the short-term rental ordinance, after the property was cited by Code Compliance for short-term rentals without a license. Mr. Ferro has determined that the property would have met all the criteria of the ordinance, but for the fact that the State of Florida mistakenly issued them a license for non-transient apartments, even though they had applied previously for transient apartments. Because they had received the wrong license, they were not on the list and not specifically notified about the passage of the ordinance and applicable deadlines. Mr. Ferro has requested that his client be allowed to seek licensing under the ordinance, as his client's property otherwise meets all of the criteria to qualify based upon payment of resort taxes, and other licensing requirements. As deadlines of the ordinance cannot be waived by City staff; any exemption would require additional legislation to reference such a case. City Commission Memorandum Short term rentals April 11, 2012 Page 3 ANALYSIS The owner of 751 Meridian Avenue submitted an application to the Florida Department of Business & Professional Regulation (DBPR), Division of Hotels and Restaurants in September 2009 for a Transient Apartment license. Through an error by DBPR, the application was processed as non transient, rather than a transient license. The property has also been issued a resort tax account by the City. When the City adopted the "Short Term Rental of Apartment Units or Townhomes" ordinance allowing such rentals in the Flamingo Park Neighborhood, the owners of 751 Meridian Avenue were not able to obtain the required Certificate of Use to comply with the restrictions in the ordinance due to the State error when issuing the license, nor were they notified of the applicable deadlines and did not become aware of the deadlines until they had passed. At the September 21, 2011 LUDC meeting, the Committee discussed this issue and by a vote of 3-0, moved to refer an amending ordinance to the Planning Board, but with the restriction that an extension of time be limited to 60 days after adoption of the ordinance and only because of governmental error in issuing the proper license. This amending ordinance was referred to the Planning Board by the City Commission at its October 19, 2011 meeting. PLANNING BOARD At its December 13, 2011 meeting, the Planning Board reviewed the proposed ordinance and by a vote of 4-1 (Stolar opposed, Veitia and Fryd absent) recommended that the City Commission approve the ordinance. At this meeting, an attorney representing another property owner made a request to modify the proposed ordinance to include another property that was not able to avail itself of the benefits of the already approved ordinance. The case was presented as impediments that did not include governmental errors as the cause for the delay. The Board voted 3-2 (Stolar & Tobin opposed, Veitia & Fryd absent) on this new proposal; however, the motion failed. CITY COMMISSION ACTION At the February 8, 2012 meeting, the City Commission approved the proposed ordinance on first reading and set a second reading public hearing for the March 21, 2012 meeting. At the March 21St meeting, this item was continued to the April 11th meeting for lack of a quorum for approval of changes to the Land Development Regulations of the City Code. FISCAL IMPACT In accordance with Charter section 5.02, which requires that the "City of Miami Beach shall consider the long-term economic impact (at least 5 years) of proposed legislative actions," this shall confirm that the City Administration evaluated the long-term economic impact (at least 5 years) of this proposed legislative action, and determined that there may be a measurable impact on the City's budget by enacting the proposed ordinance as there should be a very slight revenue increase in Resort Taxes. City Commission Memorandum Short term rentals April 11, 2012 Page 4 CONCLUSION The Administration recommends that the City Commission adopt the proposed ordinance on second reading public hearing. This recommendation of approval is only for the very limited ordinance before the Commission as written, and would not extend to any modification which would expand the scope of the ordinance to other properties, which the Administration would not recommend. Pursuant to Section 118-164(3) when a request to amend the land development regulations does not change the actual list of permitted, conditional or prohibited uses in a zoning category, the proposed ordinance may be read by title or in full on at least two separate days and shall, at least ten days prior to adoption, be noticed once in a newspaper of general circulation in the city. Immediately following the public hearing at the second reading, the city commission may adopt the ordinance. An affirmative vote of five-sevenths of all members of the City Commission shall be necessary to enact any amendment to these land development regulations. 2L JMG/JGG/RGUML T:\AGENDA\2012\4-11-12\Short term rental memo 4-11-2012.docx ® MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachR.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower a, emb of a City Commission FROM: Jose Smith, City Attorne Gary M. Held, First Asst /y DATE: December 6, 2011 SUBJECT: Legal Opinion —Effect of Amendment on Grandfathered Status of Short Term Rental Ordinance Request The Land Use and Development Committee has requested our opinion as to whether a proposed amendment to Ordinance 2010-3685, codified as Section 142-1111, City Code, regulating short term rentals in multifamily buildings,affects that ordinance's grandfathered status under state law. Question Does the adoption of an amendment that expands the filing period for a license to engage in short term rental, permitted under City Code section 142-1111 affect its grandfather status under Section 509.032(7)(b), Fla.Stat.,which prohibits local ordinances from restricting the use of vacation rentals based solely on their classification, use or occupancy? Short Answer The adoption of the proposed amendment would not affect the grandfathered status of Ordinance 2010-3685, codified at Section 142-1111, as it does not expand the grandfathered restriction on the use of properties for short term rental. Consistent with the statute's intent, it allows additional qualifying properties to engage in short term rental.This amendment also does not violate this statute. Background The owner of property at 751 Meridian Avenue has requested an amendment to City Code Section 142-1111, "Short Term Rental of Apartment Units or Townhomes," adopted by the City Commission on June 9, 2010. This ordinance established a timetable to legalize short term rental, defined as less than six months and one day, in apartment buildings that satisfied specified criteria of having previously obtained state licensing and paid resort taxes as required by law. The proposed amendment would enlarge the time periods for the owner to apply for the permits necessary. to conduct short term rental beyond the deadlines set forth in the ordinance. Specifically, the ordinance in subsections 142-1111(c) (1) and (2), required property owners to apply within three months of the effective date of the ordinance(June 19, 2010)for all necessary approvals under the Florida Building Code, Florida Fire Prevention Code,and with all other applicable life safety standards,"and within six months to apply for a certificate of use permitting short term rental. i City Commission Memorandum December 6,2011 Legal Opinion-Effect of Amendment on Grandfathered Status of Short Term Rental Ordinance Page 2 of 3 The justification for the amendment is that the owner of the property at 751 Meridian Avenue has established that the State of Florida issued him the wrong license (a non-transient license, instead of a transient license)for his rental property, and thus he was erroneously omitted from the list of eligible property owners that received direct notice of the adoption of the ordinance. He therefore was not on notice of the deadlines to establish eligibility under the ordinance. Legal Analysis In 2011,the Florida Legislature adopted a statute that generally prohibits local government regulation of short term rentals, but grandfathered ordinances existing as of June 1, 2011. Specifically, the statute provides: A local law, ordinance, or regulation may not restrict the use of vacation rentals, prohibit vacation rentals,or regulate vacation rentals based solely on their classification, use, or occupancy. This paragraph does not apply to any local law, ordinance, or regulation adopted on or before June 1, 2011. Section 509.032(7) (b), Florida Statutes. The proposed amendment to section 142-1111 reads: Applications under.this Ordinance may be accepted until 60 days after adoption of this subsection(insert date),upon demonstration to the Planning Director that a government licensing error prevented timely filing of the application. In answering the question stated, it is necessary to resort to the rules of statutory construction, as the legislature did not clearly state its intention with respect to how amendments to local ordinances grandfathered under this section should be treated. Murray v. Mariner Health, 994 So. 2d 1051, 1060-61 (Fla. 2008) ("[L]egislative intent is the polestar that guides a court's inquiry in statutory construction. However, when a statute is unclear or ambiguous as to its meaning,the Court must resort to traditional rules of statutory construction in an effort to determine legislative intent.") (citations omitted). In the instant situation, the Florida legislature intended that local governments not limit through the adoption of local regulations the right of property owners to engage in"vacation rentals based solely on their classification, use, or occupancy." The legislature then expressly excluded from this prohibition local ordinances adopted prior to June 1, 2011. Thus, it is clear that the legislature authorized local governments to engage in regulation of short term rentals, to the extent that existed on June 1, 2011. In New York, the state pre-empted all regulation of labeling and ingredients of household cleaning products, but exempted local laws in effect as of June, 1971. When a local government deregulated its local prohibition (exempted under the state law),the court held that Since the State law, by virtue of the grandfather clause, permitted the local law to remain in effect, the county was authorized to amend its local law, particularly since the amendment brings the local law more into conformity with the State law,a fact which is not in dispute.The local law, as amended, City Commission Memorandum December 6,2011 Legal Opinion-Effect of Amendment on Grandfathered Status of Short Term Rental Ordinance Page 3 of 3 does not prohibit what the State law permits nor allows what the State law forbids. Therefore, it is not inconsistent with the State law. Moreover, by specifically grandfathering the Suffolk County law, the State Legislature evidenced intent not to occupy the field of regulation of household cleansing product ingredients insofar as Suffolk County was concerned. Suffolk County was free to amend its law to be more in conformity with the State law Sunshine Chem. Corp. v. Suffolk County, 104 A.D.2d 869,870-71,480 N.Y.S.2d 379(1984) (citations omitted). This proposed amendment does not impose any additional restriction, prohibition, or regulation on vacation rentals, or short term rentals. It also does not "restrict the use of vacation rentals, prohibit vacation rentals, or regulate vacation rentals based solely on their classification,use, or occupancy"as Section 509.032(7) (b), Florida Statutes prohibits. And it does not add further restrictions to Section 142-1111 that would violate Section 509.032(7) (b), Florida Statutes. The proposed amendment enlarges the deadlines for an eligible property owner,as defined in section 142-1111,to take advantage of the licensing opportunity by obtaining a certificate of use to engage in short term rental provided by that ordinance. As such, the instant amendment proposes to amend the ordinance in a manner making it more consistent with state law. This action is also consistent with and not in opposition to the intention of the Legislature in adopting section 509.032(7) (b), Fla. Stat. It is our opinion therefore,that the proposed amendment does not amend section 142-1111 in a way that might affect the grandfather status of Ordinance 2010-3685, "Short Term Rental Of Apartment Units Or Townhomes-Flamingo Park Neighborhood." Further,that the amendment does not violate section 509.032(7)(b), Fla. Stat., as it expands rather than restricts the number of properties that can engage in short term rental under the local ordinance permitted by state law. F:\ATTO\HEl-G\Ordinances\Short Term Rental-Multifamily amend\Opinion re amendmentto shortterrn rental ordinance 12-6- 2011.doc