Ending Long Fight, County Approves Short-Term Rental Regulations–With Grandfather Clause

In the culmination of a three-year effort to return regulation of short-term rentals to local governments, the Flagler County Commission Monday evening voted 4-0 to approve new rules controlling family homes used as vacation rentals, an industry that exploded after 2011, especially in the Hammock.

As in previous meetings or hearings on the matter, the issue split generally into two camps: proponents of short-term rentals who spoke of property rights and the economic benefit of operating homes as vacation rentals on one side, and opponents of short-term rentals who are usually full-time residents and neighbors of short-term rental properties, and who see their property rights, values and expectations infringed by the disruptions of the renters. But unlike previous occasions, Thursday evening’s drew a limited number of public input: some 45 minutes’ worth, suggesting that what opposition to regulations the county had faced previously had largely conceded the issue. Most of those who spoke Monday evening favored stricter regulations and tough enforcement.

A property owner had her testimony read, describing children from a rental running through her plants, pets relieving themselves in her yard, and her property value suffering. “My rights as a homeowner in this neighborhood have been violated, it’s hurt me tremendously,” she said. “We’re not fooled,” another property owner said, encouraging the commission to rigorously enforce the ordinance, “these are not homes, they’re businesses.”

Politically, the commission’s intentions were no mystery. Vacation renters, off-site property managers and absentee landlords don’t vote. Full-time residents do. The commission has made it clear that it wants stricter regulations of the industry, but not so strict as to overly dampen an industry that also contributes to the county’s tourism industry. It brings visitors, tax revenue and activity for local businesses.

That’s what led commissioners to successfully push lawmakers last year to amend a law that had prohibited local governments from regulating the industry more than the state does. But the commission had to craft an ordinance that did not invite lawsuits. After some 15 meetings with people on all sides of the matter, the county combined the legally permissible set of new regulations with a relatively permissive grandfather clause.

The ordinance approved Monday changed notably from its first hearing before the commission in November. Its most contentious part Monday evening was its “vesting” provision—essentially, a grandfather clause that allows current renters to still rent under some of the the pre-ordinance terms, and to do so for up to six years. Proponents of stricter rules were initially displeased, as the allowance was set at 10 years. The clause is designed as a legal flack jacket for the county, which hopes to ward off lawsuits.

“That is the legal landscape we have to work with, and we have to address vested rights,” County Attorney Al Hadeed said. He described the county’s thinking in developing a legally defensible system and cautioned commissioners against making the sort of tweaks that would invite lawsuits, because, he said, “you all know that the real costs associated with venturing closer to the Bert-Harris gray line.” Hadeed was referring to the state’s private-property rights protection law.

“We’ve spent thousands and thousands of dollars just to get to this point,” Commissioner George Hanns said. “Nothing is going to be perfect.”

Narrowing the grandfather window to a maximum of six years was one of four key changes they made to the proposed ordinance, by consensus, just before the vote.

“I’m so impressed with this board,” Commission Chairman Frank Meeker said in a brief interview after the meeting, which ended just before the three-hour mark. It had begun at 5:30 p.m. “They took an extremely complicated issue and not only they demonstrated great understanding of the ordinance as proposed, but demonstrated extreme leadership and sensitivity to the concerns that were raise din the public commenting period and made appropriate changes to the ordinance to address those concerns. I’ve never been more proud to be associated with the board.” Meeker and Commissioner Charlie Ericksen had shuttled to Tallahassee several times last year to shepherd the bill amending the short-term rental ordinance at Flagler’s original request.

Other changes reflected the county’s compromises since the ordinance’s first airing in November.

The requirement that all shot-term rental properties have at least one landline is eliminated. So is the requirement that “railways” be installed on all stairways, porches and steps. A requirement that short-term rentals with more than eight occupants be at least 500 feet apart was eliminated. A “quiet hours” requirement, previously set between 10 p.m. and 8 a.m., was eliminated. The requirement that each short-term rental property have a designated “agent” was eased to mean only a “responsible party capable of meeting the duties” outlined in the ordinance. But that responsible party must still be available 24 hours a day, should county authorities need to contact her or him, and to be at the property, if necessary, within two hours of a request.

Property owners who want to use their single or two-family homes as short-term vacation rental properties much obtain an annual rental certificate for each unit (with an annual fee to be set by the county commission) and a business tax receipt from the county and tax documentation from the state to ensure that they pay their 4 percent sales tax supplement, also known as the bed tax, which feeds revenue into Flagler’s tourist development coffers.

Fire regulations must comply with the county code. Certificates would be issued only after a county inspection, and re-inspection would take place with the issuance of every application (a change from a previous provision that would have imposed inspections only every two years. The commission did not address its own manpower issues, which played into the county’s caution in setting up too many inspections: the system will require more employees, which the county will have to pay for). Those would not be surprise inspections, but scheduled inspections arranged with the property owner or the responsible party at the property.

The code requires that no more than two people sleep per bedroom, and no more than two in a common area, with maximum overnight guests limited to 10 in a single-family house, and to 16 in a two-family dwelling. (The exception is for those who qualify for the grandfather clause over the next six years. They may have up to 14 occupants. If the property is sold, the grandfather clause is lost.) In both cases, a previous restriction on day guests was eliminated. A house must have a parking space for each three overnight occupants, but a concurrent requirement for day guests was eliminated.

The ordinance goes into such minutiae as garbage containers: the previous proposal required short-term rentals to have at least one lidded, 35-gallon trash container for every three guests. The requirement was eased to one container for every four guests. But supplementary trash fees were eliminated. But property owners must still provide a sketch of the building, to scale, showing all bedrooms and sleeping areas, exits, smoke and carbon monoxide detectors and fire extinguishers’ locations.

The penalties for infractions are not particularly harsh: while property owners are getting fined for violations, it takes a series of at least four or five successive violations before a certificate is suspended. County Commission Chairman Frank Meeker found the system too permissive for habitual violators, even though fines may be increased over time for repeat offenders.

A suspension of a certificate “is a very had penalty,” County Administrator Craig Coffey said. “We did not want to jump into that, it’s more of a last-resort.” The violation history accrues over 36 months, so that the record isn’t wiped clean with every new rental. Still, Coffey said, “our intent is not punitive, our intent is compliance, our intent is to work with people,” Coffey said, with rules mitigated to reflect that on occasion, a property owner may have a “bad tenant,” and should not be overly penalized for that one bad tenant. “We hope we never have to go down this route,” Coffey said.

“I would change the 36 months to 24 months in a heartbeat,” Commissioner Barbara Revels said, to address landlords or property owners who show contempt for recurring violations.

A short-term vacation rental is defined as “Any unit or group of units in a condominium, cooperative or timeshare plan or any individually or collectively owned single-family, two-family, three-family or four-family house or dwelling unit which is also a ‘transient public lodging establishment.’”

Commissioner Barbara Revels had abstained from voting on the ordinance on first reading in November because, she said at the time, she does business with some of those involved in the short-term rental industry. She voted tonight. Commissioner Charlie Ericksen, who followed the meeting online but did not participate, was still recovering from two surgeries.

Flagler County’s Short-Term Rental Regulations (2014)