Many full time residents of WilMa recall the recent issues involving Uber, the peer-to-peer transportation provider. The local taxi monopoly, irritated that their government grant had been violated, persuaded the county commission to essentially ban Uber from operating. This provoked a consumer backlash that resulted in Uber’s reinstatement, with some restrictions.
What does this have to do with real estate? Well, tourism is a vital component of the South Florida economy. Visitors expect Uber, and the substandard monopoly taxi system here left more people with poor impressions of the Florida experience.
But the “gig economy” – of which Uber is but one example – is making inroads in real estate also. Real estate can be, under certain circumstances, an attractive investment, and many people own investment properties in WilMa and throughout South Florida. It has become very popular for property owners here to rent their homes and condos on a short term basis through services such as Airbnb and VRBO.com.
You can understand the appeal of this from the perspective of both owner and visitor. An owner is able to make some money from a property otherwise left empty, and a visitor can get something that approximates the comforts of home as opposed to a sterile hotel environment, have more privacy, and probably save money also. And improvements in technology ease the transaction.
Enter the government. Of course hotel owners are unhappy with the competition. They are required to obtain licenses from the city and state, and also to collect various taxes from guests. Yes short term landlords are supposed to do the same, but as a friend of mine once said in describing one of his businesses, “it’s not much of a business but it’s a cash business.” (What the government doesn’t know… well consult your accountant.)
Last week the real estate industry publication “Real Deal” reported on a study (funded by the hotel industry) that claimed Airbnb operators in Miami-Dade had evaded paying $16 million in occupancy taxes in the 2014-15 season. Hoteliers claim this places them at a competitive disadvantage and they want government to “do something” to “level the playing field” (i.e., protect their interests as the market shifts to other mechanisms).
Owners of nearby properties who are permanent residents sometimes have issues with these arrangements, as well. It doesn’t take more than a couple “bad apples” to get aggrieved homeowners to make the lives of city commissioners “difficult”. As a result, many cities are in the process of passing enhanced regulations of these short term rental situations.
How do you balance the rights of an individual property owner with the interests of the community? Shouldn’t you be able to do with your own property as you see fit? And what about the tax system? Has technology and life outpaced government revenue collection? Should we be looking at revising how the government funds itself, instead of complicating popular services that the market demands?by