Florida Cracking Down on Short-Term Rental Industry With Proposal Aimed at Companies Like Airbnb

The Florida State Senate has recently passed a legislative proposal granting state authorities enhanced regulatory powers over the short-term vacation rental market. 

Under the new bill, SB 280, the state’s power would overrule city and county regulations concerning short-term vacation rentals that were approved since 2016. 

The legislation introduces several new requirements for short-term rentals, including occupancy limits of two people per bedroom, with an additional allowance for two people in common areas. 

An additional provision in the legislation mandates that all short-term vacation rentals must have a designated person available 24/7 to respond to renter complaints and emergencies. 

The Department of Business and Professional Regulation (DBPR) is tasked with creating a comprehensive database of all short-term vacation rentals within Florida. 

To facilitate the enforcement of these new regulations, the DBPR will hire nine additional officers. This decision, however, has faced criticism from individuals like Brevard County Republican Randy Fine, who expressed concerns about the effectiveness of such a small team managing the vast vacation rental market across the state. 

The short-term vacation rental market is a significant component of Florida’s tourism industry, attracting over 100 million American tourists annually since 2019.

In a demonstration of the economic impact of short-term rentals, Airbnb reported generating $387 million in tourism taxes for the state of Florida in 2023 alone. 

The bill’s passage has sparked considerable opposition, with many urging Republican Governor Ron DeSantis to veto the legislation. 

Various stakeholders, including the Florida Realtors Association and the Florida Alliance for Vacation Rentals (FAVR), have publicly called on Governor DeSantis to veto SB 280. 

The bill’s critics, including city officials and local government representatives, have raised concerns about its potential to disrupt local tourism economies and undermine local regulatory efforts.

The legislation is now awaiting Governor Ron DeSantis’s decision. If signed into law, it would take effect on July 1, 2024, marking a significant change in how short-term vacation rentals are regulated in Florida. 

Florida’s move for greater oversight of Airbnb and similar short-term hotel alternatives comes amidst a growing customer resentment around the experience they provide. 

In 2023, a slew of articles with titles like “Airbnb Really is Different Now” and “Airbnb Hosting Isn’t What It Used to Be” were published by major publications like The Atlantic, Bloomberg, and others.

In November, Fortune reported that many of the Airbnb houses in Florida are now owned by a large private equity firm. There has been a clear transition from Airbnb hosts as plucky property owners to corporate overlords.

Gone are the days of the customer experience where guests couch-surf with a host in their own home. The majority of Airbnb users now rent out the entire residence, having it all to themselves, rather than sharing it with the hosts.

In May 2023, 30% of the active listings on Airbnb were managed by hosts that controlled 21 or more properties. This exceeded the listings managed by single-property owners, which stood at 26% at the time.

Guests report a change in the experience they receive at companies like Airbnb. In previous times, Airbnb hosts would offer local recommendations and enhance the experience in a personal way a hotel could not. Now few Airbnb hosts are available 24/7 to respond to issues guests have with their stay. This could be an effect of there being fewer single-property hosts.

Chesky outlined the problem he saw around affordability and recognized the struggle between balancing low prices for customers and suitable profits for hosts. He acknowledged that “the price of Airbnbs has gone up significantly over the past five years.”

Airbnb’s CEO sees their hotel alternative service as a way to enable more people to travel who couldn’t before. However, in his view, Airbnb can only be in a position to do this if it maintains affordability for travelers.

In support of his point about affordability, Chesky talked about how he imagines the brand being for young people as one of the reasons it needs to remain affordable.

In 2022, Chesky listed his own spare room on Airbnb. “Stay with me – the co-founder of Airbnb and its first host. Back in the day, my roommate Joe and I blew up some air mattresses and welcomed three guests – Michael, Kat and Amol,” the listing said.

Airbnb was founded in 2008 by Chesky, Nathan Blecharcyk, and Joe Gebbia. However, despite being founded over almost two decades ago, the company’s first year of being profitable didn’t come until 2022.

The new Florida provision targeting short-term rentals has Florida residents divided. Some see it as a good thing because the property rental industry is taking homes away from residents that need them. It is also causing housing prices to be out of reach for some.