Item Coversheet

Ordinances - R5  O




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Rafael A. Paz, City Attorney 
DATE:March  27, 2023
 

First Reading

SUBJECT:

AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING THE CODE OF THE CITY OF MIAMI BEACH, AT CHAPTER 18, ENTITLED “BUSINESSES,” BY CREATING ARTICLE XIX, ENTITLED “CO-OWNED HOUSING UNIT MANAGERS,” BY CREATING SECTION 18-940 THEREOF, ENTITLED “CO-OWNED HOUSING UNIT MANAGERS,” TO ADOPT BUSINESS REGULATIONS APPLICABLE TO THE MANAGEMENT OF RESIDENTIAL PROPERTIES BY CO-OWNED HOUSING UNIT MANAGERS, INCLUDING DEFINITIONS, MINIMUM REQUIREMENTS AND MANAGEMENT REGULATIONS, AND A CODE OF CONDUCT, AND PROVIDE FOR ENFORCEMENT AND PENALTIES; AND AMENDING CHAPTER 102, ENTITLED “TAXATION,” ARTICLE V, ENTITLED “LOCAL BUSINESS TAX,” AT SECTION 102-379, ENTITLED “SCHEDULE OF TAXES, EFFECTIVE OCTOBER 1, 2016,” TO ESTABLISH A BUSINESS TAX CATEGORY FOR CO-OWNED HOUSING UNIT MANAGER; AND PROVIDING FOR REPEALER, CODIFICATION, SEVERABILITY, AND AN EFFECTIVE DATE.


BACKGROUND/HISTORY

This item was originally referred to the Land Use and Sustainability Committee ("LUSC") by the City Commission on October 13, 2021 (Item C4G), at the request of the late Commissioner Mark Samuelian. The item is now sponsored by Commissioner Alex Fernandez.

 

Following a discussion on February 15, 2023, the LUSC voted to transmit a draft of the Ordinance to the City Commission with a favorable recommendation. 

 

 Pacaso, a tech startup based in San Francisco, recently announced that it is expanding into the South Florida real estate market. Pacaso’s business model is to facilitate fractional ownership in single-family vacation homes. Investors can purchase as little as a one-eighth (1/8) interest in each home. According to a recent article published in The Real Deal, “[t]hrough a network of local real estate agents, Pacaso helps investors set up limited liability companies for joint ownership, and collects fees from the buyers to manage, maintain, and facilitate access to the home . . . .” On its website, Pacaso states that properties may be “used only by owners and registered guests,” and “no rentals [are] allowed.” (Source: https://www.pacaso.com/blog/what-is-short-term-rental).

 

 City Code Section 142-905 prohibits the lease of single-family homes for periods of time less than six months and one day (i.e. on a “short-term” basis). Similarly, City Code Section 142-1111 prohibits the lease of apartment units or townhomes in specified zoning districts for periods of less than six months and one day. The City’s short-term rental prohibitions apply to single-family homes and applicable apartments or townhomes regardless of how the property is owned (e.g., whether owned by a single owner or multiple owners, or through a corporate entity).

ANALYSIS

At the request of the item sponsor and the LUSC, the attached proposed City Code amendment has been drafted to adopt business regulations for individuals or entities that manage co-owned housing units. The Ordinance requires a co-owned housing unit manager to obtain a business tax receipt (“BTR”), and includes a registration requirement; property maintenance requirements (including landscaping, structural maintenance, paint, repair, and trash collection); a code of conduct applicable to each owner; and provides for enforcement and penalties.

For properties in districts where short-term rentals are prohibited (including all single-family districts), a co-owned housing unit manager and all individual owners will be required to sign an affidavit acknowledging that, pursuant to the Land Development Regulations, short-term rentals are prohibited on the property.

The City does not have the legal authority to restrict individuals from acquiring property through a corporate entity, or to adopt building or zoning regulations based on the form or manner in which a property is owned (for example, whether by one or more individuals, through a corporate entity or trust, or as a condominium or cooperative). See, e.g., Sections 718.507, 719.507, and 721.25, Florida Statutes.

However, the City Commission does have authority to adopt reasonable business regulations on the management of co-owned housing units.

SUPPORTING SURVEY DATA

n/a

FINANCIAL INFORMATION

A fiscal impact statement will be provided by the City Administration prior to Second Reading. 

Applicable Area

Citywide
Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? Does this item utilize G.O. Bond Funds?
Yes No 

Strategic Connection

Non-Applicable
Legislative Tracking
Office of the City Attorney
Sponsor
Commissioner Alex Fernandez

ATTACHMENTS:
Description
Revised Ordinance