There Goes The Neighborhood

Is Airbnb Ruining Our Neighborhoods?

Do sites like Airbnb boost the local economy or tear neighborhoods apart?

By Cooper Levey-Baker October 2, 2019 Published in the October 2019 issue of Sarasota Magazine

You can spot the vacation rental property in Lido Shores from a block away. It’s the one with the driveway packed bumper to bumper with cars and another six vehicles lined up at the curb.

Scott Eason, who has worked in the vacation rental industry on Anna Maria Island for years, purchased the property out of foreclosure for $580,000 in 2015. At the time, the one-story house at 1406 Westway Drive, built in 1968, had two bedrooms and two bathrooms. Four years later, the house is almost all new, with six bedrooms, five bathrooms and a whole second story stacked on top.

1406 Westway Drive, Lido Shores

Image: Chad Spencer 

Figuring out who actually owns the property today leads down a worm-hole. Last September, Eason sold the property for $1.9 million to a company named 1406 Westway LLC, owned by another LLC dubbed Lido Key JV, itself owned by Casto Lido Key Investors, LLC and Kaleta Lido Investments LLC, which are held by owners in Bradenton, Columbus, Ohio, and Washington, D.C.

Siesta Key Luxury Rental Properties, the company that manages and rents out the home, is owned by the same collection of investors. Its website dubs the property a “Lido Key Retreat,” a “brand new and exclusively private home” that can sleep 17. Interested in renting it for a week? A Saturday to Saturday rental will cost you $13,533 next April or $7,836 next July.

Lido Shores is one of Sarasota’s most prestigious neighborhoods, and home to some of the region’s most expensive properties, including significant architectural residences from the mid-20th century. Tear-downs and new construction here are common, but neighbors are frustrated with 1406 Westway’s new status as a vacation getaway. Their anger boiled over at a Sarasota City Commission meeting last November.

“Private residential neighborhoods are not intended to be transient areas,” testified Lois Trotochau, who lives next door to 1406 Westway with her husband, David. Lois says the couple has been forced to plant more trees to buffer the noise coming from next door and has called the cops on multiple occasions. “There is no on-site management, no one to keep the rowdy parties under control, no limit on occupancy, no one to stop 4 a.m. spring break-type parties,” Lois Trotochau told city commissioners.

The testimony rankled Hagen Brody, the city commissioner responsible for the discussion in the first place. He had brought up the possibility of adjusting the city’s short-term rental rules to make it easier for Sarasota residents to rent out their properties through sites like Airbnb. He calls those rentals “home sharing,” distinct from overt investor-run vacation rentals like the one at 1406 Westway. But after the barrage of testimony from Lido Shores residents, a majority of the city commission didn’t care to hear more about making it easier to run an Airbnb. The vote to kill Brody’s proposal was 3-2. 

Jesse Balaity, an Airbnb host who lives in Gillespie Park, says the city’s hostility to the site “sends a message to people that you only want a certain kind of visitor.”

Image: Chad Spencer

Conflict over short-term rentals in residential neighborhoods has always burned hot, but the arrival of Airbnb a decade ago doused those coals with gasoline. The site today claims more than 6 million listings in 100,000 cities around the world and has clocked more than 1 billion guest arrivals. Marriott has 1.3 million rooms worldwide; Airbnb added 1 million new listings just between July 2018 and March 2019. The company, which is profitable (rare for a Silicon Valley startup), is valued at $35 billion; since it launched, hosts have earned a combined $65 billion through the site.

The number of Sarasota visitors using Airbnb has skyrocketed in recent years. In 2017, 67,000 guests stayed in Sarasota County Airbnbs. That number rose to 100,000 last year, resulting in $22.8 million in revenue for Sarasota County hosts and enough to place Sarasota at No. 10 in a ranking of the site’s most popular destinations in Florida. According to the research site All the Rooms, Sarasota is one of the fastest-growing vacation rental markets in the United States, with nearly 1,300 listings on platforms like Airbnb.

That growth doesn’t please everyone. Around the world, Airbnb’s expansion has led to backlash from residents who complain about tourist traffic in previously quiet neighborhoods, a loss of affordable long-term rentals and spikes in housing costs. Critics also say neighborhoods lose their sense of community when it becomes more transient, and that once-quirky, off-the-beaten-path cities start looking like every place else, as Airbnb rental owners and businesses worldwide copy what is popular on social media.

The blowback is most pronounced in historic cities that have long struggled to accommodate tourist demand while preserving what attracts those tourists in the first place. Barcelona, a city of 1.6 million, brings in roughly 20 million tourists each year. In 2014, residents angry about a surge of binge-drinking Airbnb visitors staged protests against el turismo de borrachera (“the tourism of drunkenness”), and the city has since taken steps to tighten restrictions on short-term rentals. In Venice, Italy, invasive tourism has caused property owners to abandon their homes because they can’t afford the rising cost of living in the city and can’t even maintain their apartments to rent them out. Squatters from the city are now illegally occupying many of those vacant homes. Approximately 25 million tourists visit Venice each year; the city’s population has fallen to around 50,000.

Sarasota residents have not yet taken to the streets or begun squatting, but complaints about vacation rentals are common. Steve Scalione lives near the northern tip of Siesta Key. “In the past couple years our neighborhood has been completely overrun with vacation rentals,” he told the city commission last fall. “It’s turned into a nightmare.”

That picture doesn’t jibe with the experience reported by many Airbnb hosts. Andrea and Kenneth Weissleder rent out a private suite in their Arlington Park home through Airbnb. They originally planned to use the space for their visiting children and grandchildren, but found it was easier for them to travel to see their kids. The Weissleders had used Airbnb when they traveled, and so decided to try renting their property through the site. The experience, they say, has been excellent.

“We’ve had people from all over the world who come into our home and grace it with such respect and care,” Andrea says. “They’re people who like people. They’re not troublemakers.” The Weissleders have hosted 300 to400 people since opening their home. “We have not missed one towel, one book,” Andrea says. She describes a stay at their Airbnb as “an affordable, lovely, warm, caring experience” that you can’t get at a
hotel. Asked if any neighbors have complained to her about guests coming and going, Andrea says, “Never.”

Jesse Balaity, who designs commercial spaces all over the country, lives in Gillespie Park and planned his Seventh Street property with rentals in mind. He lives in a main unit, manages a one-bedroom detached garage apartment as an annual rental and offers another two-bedroom unit next door on Airbnb and Vrbo, a vacation rental site that has been in business since 1995.

Balaity has lived in New Orleans and visited Amsterdam, where neighborhoods have been hurt by uncontrolled Airbnb rentals, he says. His experience in Gillespie Park is worlds apart. He lives on site, which means he has a vested interest in only renting to guests who keep quiet, and he can respond to any complaints about their behavior. He says he’s gotten zero pushback from neighbors. “I’ve never had a loud guest,” he says.

Financially, Airbnb lets Balaity come out “slightly ahead” of renting out his space annually. It’s paid off in other ways, too. One couple who stayed with him liked Gillespie Park so much they bought a nearby house and hired Balaity, an interior designer, to help style it. Airbnb also provides rich social interactions, he says. He’s hosted a famous French lawn bowler, students from China and plenty of guests from places like Orlando and Miami. Some have become friends. “We get a lot of repeat visitors,” he says. 

One irony of the current debate is that the party-hard rental in Lido Shores that is driving people nuts is adhering to the city’s short-term rental rules, while a grandmother renting out part of her Laurel Park home for two nights to a subdued guest is in flagrant violation.

That’s because of short-term rental regulations passed by the Sarasota City Commission in 2002. The code currently defines “household living” as a situation in which someone is a tenant of a “dwelling unit” for a period of at least a week. These are permissible within the city. Paid stays that run shorter than one week, even in someone’s home, are considered “transient lodging,” akin to a hotel or motel, and are forbidden. But cruise Airbnb today and you’ll find all kinds of places to crash inside city limits for two or three nights. (Outside city limits, rentals shorter than 30 days are only permitted in certain areas on Sarasota County’s barrier islands.) City code enforcement is rare, but on the rise. The city cited just eight property owners for violating the rental ordinance in 2017 and 40 in 2018.

Commissioner Brody wants to change the city’s rules. He says there’s a vast difference between vacation rentals owned by investors who don’t live anywhere near the property and Airbnb operators like the Weissleders and Balaity. He calls those rentals “host-occupied” rentals or “home sharing,” and would like to see the city deregulate them, while maintaining its one-week minimum stay rule for true vacation rentals. “If you have a host on the property, that alleviates a lot of the problems,” he says. The city has never tracked how many complaints it receives about host-occupied rentals versus rentals where the homeowner isn’t present, but Timothy Litchet, the city’s director of development services, agrees that it’s “common sense” that the city would see fewer complaints about home sharing rentals.

Brody says his plan would be a boon to the city. For starters, it would boost local tax revenue. Everyone in Sarasota County who rents out a property for less than six months is required to pay a 5 percent Tourist Development Tax on all rental revenue, the same as a hotel. More than $1.2 million in tax money has already been collected from Airbnbs alone during the current fiscal year.

Brody says his proposal would also bring tourist bucks to neighborhood businesses that normally cater to locals, allow city residents to cash in more on our tourist economy, expose visitors to areas of Sarasota besides the beach, help residents stay in communities where rising home prices are forcing many old-timers out and lead to more historic homes being preserved, rather than torn down. How do we know that? “It’s already happening!” he exclaims. “We just need to bring it out of the shadows.”

That was Brody’s goal when he brought up the topic at the City Commission meeting last year, but the truth is that the future of Airbnb in Sarasota may not even be up to the city. In 2011, the Florida Legislature passed a measure that bars cities from regulating “the duration or frequency of vacation rentals.” Sarasota’s rules, as well as vacation rental regulations in many cities across the state, were allowed to stay on the books, but that could change.

This spring, Florida lawmakers debated a bill introduced by Rep. James Grant, R-Tampa, that would have blocked nearly all local ordinances restricting vacation rentals, even those that were approved before 2011. Grant argued that the measure would protect property owners from being “discriminated against” because of how they choose to use their land. The bill was passed by multiple committees but died before the end of the Legislature’s 60-day session. Grant’s office did not respond when asked if he plans to reintroduce the bill next year, but some form of it is likely to return.

Some fear that if the City of Sarasota tinkers with its ordinance as Brody hopes, the city might violate the existing prohibition on new vacation rental regulations, which would invalidate all of its rules. Brody, however, points to an Orlando home-sharing ordinance that went into effect last year. That measure allows residents to host visitors for any amount of time less than 30 days, as long as the portion of the home being rented out takes up less than half of the total number of bedrooms. It also requires that hosts live on site, be present when guests are there and register their property with the city. The goal of the ordinance is to encourage bookings through Airbnb, while limiting the ability of corporations or investors to buy homes and rent them out remotely.

Since Orlando’s ordinance went into effect, just 151 property owners have registered with the city to offer short-term rentals. That’s fewer than officials expected, says Mike Rhodes, Orlando’s deputy director of economic development. Many owners simply took their listings off Airbnb rather than comply with the new rules and inspections. The number of complaints from neighbors, meanwhile, has stayed about the same, but now the city can revoke a person’s license for not following the rules. “It seems to be working OK,” Rhodes says, “but we’re not seeing the volume that we anticipated.”

The city hasn’t yet seen any friction with state regulators. “Our frustration has been with the shifting sands and concerns about what the Legislature might do,” Rhodes says. “Every year, it seems like someone introduces legislation that, if passed, would pre-empt us entirely. It’s our contention that people in Tallahassee aren’t always in tune with what’s happening at the local level.” He calls possible statewide pre-emption a “poorly informed approach.”

Brody says he wants Sarasota to become an “incubator” for smart local policy, and that the city has a chance to find a way forward on an issue affecting communities around the world. After being shot down last year, he isn’t giving up. “I’d like to bring it up again,” he says. “We have to start experimenting with disruptive technology, because it’s not going away.”

“This is nothing new for us,” says Visit Sarasota County president Virginia Haley. “Sarasota has been dominated by vacation rentals for as long as we’ve collected the Tourist Development tax.” Sarasota County today has 7,949 condos and apartments available for short-term rentals, compared to just 6,178 hotel and motel rooms. “It is a real balancing act between the impact on neighbors and how well the property is managed,” Haley says. “A well-managed home rental shouldn’t impact the neighborhood, but unfortunately you have some that are not well managed.” Visit Sarasota County hasn’t taken any official position on Brody’s proposal. Haley wonders how the city would enforce the measure.

The current fight over Airbnb isn’t just about Airbnb, of course. It’s part of a never-ending squabble over how much development is too much, whether policymakers should cater to tourists and the businesses they support or the people who live in the city’s neighborhoods, and whether change and progress are inherently good.

Balaity calls Brody’s plan a “brilliant compromise” that would curtail the abuses of vacation rental businesses while giving a boost to local homeowners. Not everyone can afford a seven-night stay in Sarasota, he points out, nor can everyone afford even just a few nights in a downtown hotel. Airbnbs like his open up the city to different types of people. The city’s hostility to Airbnb, he says, “sends a message to people that you only want a certain kind of visitor.” 

Former Lido Shores Property Owners Association president Bob Thill says residents in his neighborhood will fight any attempt to deregulate short-term rentals.

Image: Chad Spencer

Out on Lido Shores, the fear is that loosening rules for Airbnbs will lead to more homes like the one at 1406 Westway Drive. Bob Thill, a former president of the Lido Shores Property Owners Association, says an overwhelming majority of homeowners there oppose allowing rentals shorter than one week. “Seven days means families,” he says, “not weekend beer bashes.”

Thill is skeptical that Brody’s idea of creating different rules for vacation rentals and home sharing would work. Property owners are already openly violating the city’s code. What will stop them from doing so if the code changes? He calls Brody’s plan a “backdoor attempt” to undermine vacation rental regulations. “This is not just about Lido Shores,” Thill says. “This is about keeping residential neighborhoods residential.”

As the city dithers, Lido Shores is taking it upon itself to discourage more vacation rentals. One important perk of living in the neighborhood is direct access to Lido Beach even if you don’t live on the water. Through an agreement hammered out decades ago, members of the Lido Shores Property Owners Association can access the beach if they pass through two locked gates and cut across a privately owned parcel.

Angered by what was happening at 1406 Westway, the property owners association last November voted to terminate the membership of anyone who “rents a single-family home (or any portion of) for less than 30 consecutive days” or who operates a “home solely as a business or rental business.” In effect, the move blocks the owners of 1406 Westway and anyone renting the home from using the neighborhood’s beach access route. Such steps will not thwart short-term rentals, Thill says, but at least the property management company behind 1406 Westway can’t advertise “direct beach access” anymore.

If deregulating Airbnbs comes up again at City Hall, Thill says his neighborhood will show up again, too. He says it’s vital to block vacation rentals before they open for business. “Once they’ve taken root,” he says, “it’s hard to go back.”

For the owners of 1406 Westway, the complaints are moot. The property is currently on the market for $2 million. The Michael Saunders & Company write-up lists its considerable charms, which include “walls of windows,” a “resort style” pool and a total remodel completed in 2017. Another perk: “Great rental income.”

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