It’s not your imagination. The number of single-family homes used as short-term vacation rentals has increased by 60 percent in two years across Flagler County, while the number of vacation rentals in Palm Coast alone, where most of the growth is concentrated, has surged by 70 percent, with the overwhelming share of those in single-family homes, condos or town houses.
The total number of properties used as vacation rentals–including homes, apartments, hotels, motels and miscellaneous properties–increased to 1,621 as of October 2024, the latest numbers available from the Flagler County Tax Collector’s Office as they reflect the last completed financial quarter. That’s up 29 percent from the 1,252 recorded by October 2022.
In Palm Coast the number of properties used to the purpose rose from 342 two years ago to 581 by last October. The number includes a handful of hotels, but the overwhelming majority of the total are single-family homes, condos and town houses.
The numbers are a clear indication of the astounding growth in the local vacation-rental business, most of it in the heart of residential communities, such as Palm Coast’s C-Section (where they are particularly concentrated) and Flagler County’s unincorporated Hammock, where houses are being built by vacation-rental companies specifically for the vacation market. The numbers are also an indication of the challenge traditional hotels and motels are facing as they try to keep their rooms filled–and why there has not been a similar surge in hotel-building either in Palm Coast or Flagler County. The rising Margaritaville Hotel in Flagler Beach is an exception, though its future, which has not begun, has yet to be proven in the new environment.
Flagler Beach has seen a 22 percent increase in properties used for short-term rentals in the last two years, from 165 to 202. There has been no increase in the number of vacation rentals in Bunnell, Marineland and Beverly Beach over the last two years: it’s been stuck at 18 for the combined areas.
The local numbers contrast with a reported slowdown in the growth of short-term rental properties in the country, suggesting that Palm Coast is still in catch-up mode, and that the growth may not continue as sharply–especially if the larger number of available short-term, rentals makes it more profitable for homeowners to convert to long-term rentals, or if a local housing crunch persists. Local housing supply, however, has been at its highest in 10 years.
For all the surge in vacation rentals, there has not been an equivalent surge in tourism-tax revenue for Flagler County–a strange dichotomy that raises a legitimate question: are all vacation-rental property owners paying the tax? A 5 percent tourism surtax is levied on all short-term rentals, including vacation rentals. The tax generated $4.3 million in the last fiscal year, down from $4.6 million last year, and down from $4.4 million in 2021-22, even though this was to be a revenue year fully recovered from the Covid pandemic.
Newly-elected Flagler County Tax Collector Shelly Edmonson presented the latest numbers on vacation rentals to the Tourist Development Council at the council’s quarterly meeting this morning, and as part of the larger picture of tourism revenue in the county. “We’re chasing down folks if they don’t pay, and making sure that they do,” she said. “We’re doing tax warrants, we’re putting notices on doors, we’re sending certified letters. We’re doing all the things to make sure that they’re compliant.” The tax office has five ongoing enforcement actions and eight active investigations.
Single-family homes, condos, town houses and duplexes account for 92 percent of the countywide total properties used for short-term rentals. In comparison, just 16 of those properties were traditional hotels or motels. Eight were RV or campgrounds, and only 44 were single rooms, or partial vacation rentals, used in the property of an owner-occupied house. There has been no new hotel or motel construction in Palm Coast in the last two years, so the growth in vacation rentals is essentially all in home-type short term businesses.
There are 63,911 housing units in Flagler County, with just under 2.5 percent of them used as vacation rentals. “You know of significant structures being built, new hotels and that sort of thing,” Edmonson said. “But you know, all the in-betweens [meaning short-term rentals], you can see there’s a significant increase in the comings and goings of those.”
Unincorporated Flagler County was ground zero for the vacation-rental industry’s surge a decade ago. That has slowed down. In the last two years, unincorporated Flagler saw the addition of just under 100 rentals, a 13 percent increase, to a total of 820–still considerably more than Palm Coast.
The figures were especially timely since the Palm Coast City Council a week ago, and after a seven-month slog of debates and rewrites, approved its first-ever vacation-rental ordinance. The ordinance regulates maximum occupancy (10), noise, trash, registration procedures and parking. It does not regulate where or when vacation rentals may be operated, or for how long during the year: any dwelling may be used to that end, and for as often as the owner wishes. (See: “Palm Coast Enacts Vacation Rental Regulations as 10-Guest Limit Survives, But Milestone May Be Sort-Termed.”)
The council approved the new ordinance somewhat in the dark about the actual number of short-term rentals in the city. The number was based on estimates. The tax collector’s figures provides the most concrete evidence of actual rentals that now must register with the city, and pay the associated fees.
The reported figure of “well over 200 such rentals in the city,” as reported here last week, is a gross undercount. The city had estimated that it would collect $123,000 from existing rentals. Based on the numbers presented by Edmonson, if the city were to charge the $275 registration fee per rental, and the additional $75 inspection fee, it would generate closer to $200,000. The revenue is to underwrite code enforcement of the city’s vacation rental industry, which has created friction with permanent residents and caused some to sell their homes and leave the city, according to representatives of the Canal Community Coalition. The coalition was established by permanent residents of Palm Coast’s C-Section to press the city to regulate short-term rentals.
The Tax collector could not say where precisely the vacation rentals were in Palm Coast. “We do know where they are. We don’t have any data to provide exactly where they are in our tourist development module,” she said. “The nature of tourist tax, we’re just so limited on on what we can provide.” But as Palm Coast builds a registry, those addresses will be a public record. Flagler County has a similar registry.
See Edmonson’s report for the year ending in October 2022 here, and for the year ending in October 2024 here.
