Miami Beach cracks down on short-term rentals

  • Miami Beach, Florida, is now requiring online platforms to list specific business license information on their sites.
  • The new law took effect on Sept. 22, but the city has given short-term rental platforms about 30 days to institute changes.
  • Rentals for less than six months and one day are prohibited in the city unless the property is in a legally permissible zone, such as most of tourist-dense South Beach.
Miami Beach Coast, Florida (Photo by Hoberman Collection/UIG via Getty Images)
Hoberman Collection | Universal Images Group | Getty Images
Miami Beach Coast, Florida (Photo by Hoberman Collection/UIG via Getty Images)

One of the country's most popular resort cities for short-term rentals is rolling out a strict new law designed to prevent widespread illegal rentals, a decision sharply criticized by Airbnb.

Miami Beach, Florida, which already imposes stiff fines for illegal short-term rentals, is now requiring online platforms to list specific business license information on their sites.

"We discovered Airbnb and the other platforms are allowing the rentals to happen in zoning districts that are patently illegal," Aleksandr Boksner, chief deputy city attorney, told CNBC on Thursday.

The new law took effect on Sept. 22, but the city has given short-term rental platforms about 30 days to institute changes that would allow a host or property owner to enter the required information.

Rentals for less than six months and one day are prohibited in the city unless the property is in a legally permissible zone, such as most of tourist-dense South Beach. Short-term rentals are largely illegal in the residential areas of the city.

Modeled after a similar regulation in San Francisco, the new law requires platforms to list the property owner's city-issued tax receipt number and the resort tax registration certificate number for each listing.

Boksner warned the city is prepared to take criminal action against anyone who falsely enters information to get around the law.

"The city ultimately did this to close the other bookend," Boksner said. "We started off with issuing violations to the property owner. The other end is now the hosting platforms."

And if a short-term rental platform discovers an illegal listing, it must report that to the city within 15 days or face criminal sanctions, he said.

Airbnb, which Miami Beach says has been responsible for the majority of illegal listings, criticized the new law.

"We are disappointed by the city's decision to double down on a law that even they admit isn't working. We stand by our position that our hosts and residents in Miami Beach deserve comprehensive short-term rental reform that addresses the fundamental flaws in the city's existing system," Tom Martinelli, Airbnb's Florida policy director, said in a statement to CNBC.

Boksner said "it's unfortunate that an entity like Airbnb continues to engage in what is clear illegal conduct." He called on them to "be good corporate citizens to work with the city of Miami Beach."

Calls to Booking.com and Expedia, the two other major short-term rental platforms, were not immediately returned.

The city already imposes stiff fines for illegal short-term rentals that start at $20,000 for the first violation. But the activity has continued despite the tough enforcement.

The new law comes on the heels of a CNBC investigation in May that found the city was trying to enforce regulations on illegal listings through fines and routine visits by code compliance. The investigation also found commercial companies leasing properties and turning them into illegal rentals, not only in Miami Beach but in other cities around the country.

Asked why Airbnb won't block illegal listings in Miami Beach on its own, Chris Lehane, the company's head of global policy, told CNBC in May, "We've worked with cities all over the country. We've put in something called a pass-through registration system. Cities can determine if something is in the permissible area or not. We've done that. We've done it all over the place. Happy to do that in a place like Miami Beach."

In May 2017, Airbnb and HomeAway, another short-term rental company, reached a settlement with San Francisco. The two platforms agreed to enforce regulations made in 2014 that require them to register all hosts.

Hosts who register can only rent out their homes for 90 days and they must live at the listed property for at least 275 days per year. The settlement also requires Airbnb and HomeAway to collect data from people who list their units for under 30 days, information San Francisco can use when determining who can register.

The goal of the agreement was to limit the number of "commercial de facto year-round hotels," according to Omar Mesry, senior analyst of the San Francisco Office of Short-term Rental Administration and Enforcement.

The new rules went into effect last September. After they went into effect, the number of listings dropped from around 10,000 to 4,000 in eight months, according to Mesry.