STANDING ROOM ONLY Vacation rental workshop packs the house

ALEX RICKERT alex@keysweekly.com

Any questions about community interest in a second, more interactive monthly meeting of the Marathon City Council were swiftly answered on Tuesday night: even those arriving on time found every available seat already filled.

With the highly charged topic of vacation rentals on the agenda for the Jan. 24 workshop, discussions were more civil and informative than most expected, with a thoughtful exchange between residents, staff and elected officials throughout the evening.

Marathon attorney Steve Williams opened the evening by reiterating the “good news and bad news” of Marathon’s vacation rental ordinance: the city adopted its vacation rental rules in 2010, prior to the enactment of a 2011 Florida state statute essentially preventing municipalities from restricting rentals in any way. Local ordinances adopted prior to the June 1, 2011 deadline were grandfathered in, but any attempt to modify Marathon’s existing ordinance would cause the city to forfeit that protection.

“Virtually every other municipal attorney I’ve ever spoken to, or spoken in front of, has the exact same opinion,” Williams told the crowd, quoting Pasco County attorney Jeff Steinsnyder’s stance that “once you start playing with (your ordinance), you lose that grandfather. The (Florida) legislature has taken away your ability to adopt a new vacation rental ordinance.”

The translation? If the current ordinance is struck down, any rental property in Marathon could be legally rented on a nightly basis (the current minimum is 7 days), and the city would lose all ability to locally enforce rental laws. Complaints would instead be referred to one of roughly eight state Department of Business and Professional Regulation enforcement officers covering the entirety of South Florida –with the closest one residing in Miami.

Monroe County Tax Collector Sam Steele provided a detailed overview of the tax implications for all transient rentals in the county – defined as 30 days or less – and discussed his office’s ongoing efforts to identify and collect appropriate tax revenues from illegal unregistered rentals.

If caught, an illegal rental that refuses to become compliant with current regulations and registrations or provide their rental records could face a steep assessment from Steele’s office. Such an assessment could reach back up to 36 months to levy taxes based on a nightly rental at the property’s currently advertised rate. Continuing to ignore communications from the tax collector’s office may result in a lien being placed on the property as well as freezing of bank accounts and a referral to the state attorney’s office for criminal prosecution.

Of the 12.5% in taxes collected from rental properties, 7.5% goes to the Florida Department of Revenue as a sales tax, while 5% comes to Steele’s office – 4% for a tourist development tax and 1% for a tourist impact tax. How that money is spent is governed at the state level, not locally.

“This past year was record-breaking, by far. Close to $90 million (collected from the tourist development tax), which was 30% higher than a previous record in 2021,” Steele said.

With comments from several residents that the skyrocketing revenues and resulting taxes should be able to provide for additional code enforcement resources, City Manager George Garrett pointed out that the vast majority of the money is allocated to the Monroe County Tourist Development Council and spent for items like Keys advertising and capital projects at tourism-related venues.

City Code Director Ted Lozier gave an update on Marathon’s code enforcement efforts, particularly concerning newly-purchased software to identify illegal rentals within the city. With 93 properties under investigation, Lozier said the department took 20 properties to code hearings within the last year, collecting associated fines of roughly $50,000.