Article Courtesy of  LAW 360

By Carolina Bolado

Published December 7, 2018

A Florida state appeals court ruled Wednesday that the city of Miami could enforce its ban on short-term rentals in residential neighborhoods and target residents renting rooms and homes through Airbnb and other home-sharing platforms, reversing an injunction blocking the ban as overly broad.

Florida’s Third District Court of Appeal said Airbnb Inc. and the hosts who are suing the city over its ban had failed to show they have a substantial likelihood of success on the merits of the case to warrant the broad injunction that barred the city from enforcing any vacation rental ban and that required speakers at public meetings to give their names and addresses.

The trial court had concluded that the city’s zoning code — Miami 21 — is preempted by a state law barring cities and counties from passing ordinances prohibiting or unduly regulating vacation rentals. But the Third District said the state law does not apply to local laws or regulations adopted on or before June 1, 2011, and that although Miami 21 was updated in 2016, the material provisions of the zoning code went into effect in 2009.

“The injunction here fails to recognize that under certain circumstances, Miami 21 may prohibit short-term or vacation rentals in T3,” the appeals court said. “For that reason, we conclude that the injunction is overbroad and must be reversed.”

Miami 21 prohibits short-term vacation rentals in the T3 zone, which is mainly suburban single-family housing, that convert a property’s use to something other than “predominantly of permanent housing.” But the appeals court said that doesn’t mean “exclusively of permanent housing” and that incidental use for short-term or vacation rental might not violate the zoning code.

“We recognize that this ‘predominantly of permanent housing’ analysis may create a fact-intensive, case-by-case inquiry,” the appeals court said. “But the trial court here made no distinction between the types of rentals that may be permitted under Miami 21 and those that may violate the zoning restriction.”

In addition, the Third District overturned the injunction barring the city from requiring members of the public to give their names and addresses at public meetings. The trial court had put it in place because of concerns that the practice would chill Airbnb hosts from speaking for fear they would be targeted for enforcement actions by the city. But the appeals court said this too was overly broad because it applied to all meetings, even those at which the issue of short-term rentals was not going to be discussed.

Miami-Dade County Circuit Judge Beatrice Butchko granted Airbnb and five of its hosts the temporary restraining order in April 2017 in a lawsuit they filed jointly challenging the city’s ban and accusing city officials of making unlawful enforcement threats following a city commission meeting that focused on these issues.

Airbnb and other home-sharing businesses have recently come under a flurry of scrutiny in Miami-Dade County — one of Airbnb’s largest markets in the United States — with local leaders responding to concerns from a number of parties.

Miami Beach instituted $20,000 fines for violators, a figure Airbnb has called “outrageous.” The fines in Miami are $250 per day.

Residents have complained about noisy party houses popping up in residential neighborhoods, raising issues with safety, cleanliness and the potential for decreased property values. The hotel industry has voiced concerns over unfair competition from these untaxed businesses.

And city officials are fearful of secondary effects on the affordable housing inventory in an already expensive market.

In their lawsuit, San Francisco-based Airbnb and the individual plaintiffs — Miami residents Yamile Bell, Ana Rubio, married couple Gary M. Levin and Toya Bowels, and Kenneth J. Tobin — seek a judgment declaring that vacation rentals are not barred under the city’s Miami 21 zoning code and prohibiting city officials from adopting any new ordinances or investigating and proceeding with any enforcement against a residential property based on vacation rental use.

The complaint points to the 2011 law passed by the Florida Legislature that bars cities and counties from passing ordinances unduly regulating vacation rentals. The law contained a limited exception grandfathering in local regulations on short-term rentals, but Miami did not have such an ordinance on its books in 2011, Airbnb said. Instead, the city “manipulated a way” to try to take advantage of the exception when it passed a zoning interpretation in 2015 prohibiting rentals within its “sub-urban” residential zoning district, according to the suit.

Miami City Attorney Victoria Mendez said the city is very pleased with the decision. Airbnb declined to comment.

Judges Barbara Lagoa, Thomas Logue and Norma S. Lindsey sat for the Third District.

Miami is represented by Victoria Mendez, John A. Greco and Christopher A. Green of the Miami City Attorney’s Office.

Airbnb is represented by Mitchell W. Berger, Paul S. Figg, Paul A. Avron and Fred O. Goldberg of Berger Singerman LLP.

The case is City of Miami v. Airbnb Inc. et al., case number 3D17-1213, in the Third District Court of Appeal of Florida.