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Challenging the Highest Home-Sharing Fines in the Nation

Nichols v. City of Miami Beach

Case Status

Date Filed

June 27, 2018

Last Step

VICTORY! The Florida District Court of Appeal struck down Miami Beach's excessive home-sharing fines for violating state law.

Next Step

Respond to City's motion to dismiss constitutional challenge to home-sharing ban.

Case Overview

Home-sharing is a popular way for visitors to stay in the Sunshine State. Home-sharing helps thousands of Floridians rent rooms or houses to help pay their bills. According to a recent poll from Mason-Dixon, 93 percent of Floridians support home-sharing.

In the city of Miami Beach, Airbnb generated an estimated $253 million in local economic impact last year. Nearly a third of visitors’ dollars were spent at local restaurants.

Miami Beach was built as a vacation destination and has always relied on tourism as the lifeblood of the city. In fact, 55 percent of properties in Miami Beach are non-homesteaded investment properties. Tourism drives Miami Beach’s local economy and breeds new business opportunities for local residents. So-called “vacation rentals” are the properties that pay the taxes, which fill the city’s coffers to pay for schools, emergency and community services, and infrastructure improvements.

In short, home-sharing has always been a vital part of Miami Beach. The only difference today is the advent of platforms like Airbnb and HomeAway to seamlessly facilitate the home-sharing process.

Yet across Florida, a growing number of cities are trying to ban short-term rentals, sticking homeowners with astronomical fines and penalties. The most extreme law was written by Miami Beach, which now imposes fines of $20,000 to $100,000 per violation on home-sharers who rent outside of a small zone in North Beach where rentals are permitted, or who fail to comply with the myriad of rules within that zone.

Although his city imposes the heftiest fines in the country, Miami Beach Mayor Philip Levine recently complained that the fines should be even higher. Despite his concerns about home-sharing in Miami Beach, Mayor Levine enjoys the benefits of home-sharing when he visits other communities—he just doesn’t want to extend those freedoms to his own constituents. As he announced in a press conference earlier this year, “I love Airbnb. Love, love, love, love. Airbnb is an extraordinary company—I think it’s fantastic, but I just don’t love Airbnb on Miami Beach.”

These arbitrary restrictions—including the carve-out for North Beach—based on bureaucratic whim, have serious consequences for the community. Without vacation rental options, many tourists—especially families—simply cannot afford to visit, and spend their money, in Miami Beach. So they will go elsewhere.

Prohibitions on home-sharing are often nothing more than a turf war fueled by existing businesses using their political power to block the competition. Hotel lobbies claim that vacation rentals are a detriment to their industry and sympathizers argue that homeowners who rent out their guest rooms “compete with the city’s hotels and threaten the jobs they create.” But by that logic, officials should also forbid people from letting friends or relatives spend the night or come over for dinner, in order to increase business for the nearest Motel 6 and Denny’s. Yet, even as home-sharing booms nationwide, hotel occupancies and demand are still growing year-over-year.

Home-sharing crackdowns also encourage neighbors to spy on one another and require police to spend time on petty squabbles. In Honolulu, Hawaii, the government has spent tens of thousands of dollars hiring officers to peek over people’s fences and interrogate tourists to ensure that property owners aren’t letting paying guests stay the night. In Santa Monica, California, officials spent half a million dollars creating a full-time task force to enforce its home-sharing ban—and managed to convict just one homeowner, fining him $3,500.

In Miami Beach, the situation is far worse. Taxpayers now fund five full-time employees who are tasked solely with hunting down short-term rentals and taking their owners to task. And because three-quarters of all homes are non-homesteaded properties, second homes pay the lion’s share of the city’s budget through property and school board taxes (services these homeowners do not use). With the home-sharing ban, the city of Miami Beach is not only wasting valuable taxpayer resources on enforcement; it is biting the hand that feeds it, punishing the homeowners whose tax contributions are critical to funding the municipal services for the year-round residents.

Rather than improving the local economy and supporting homeowners who want to take a shot at the American Dream, Miami Beach is spending taxpayer money to drive away visitors and turn homeowners into outlaws.


The Law

These regulations aren’t just detrimental to homeowners, travelers, and communities; they’re also illegal under Florida law. Private property is a fundamental human right—the guardian of all other rights. Other freedoms, like freedom of the press or religion, would be meaningless if people were prohibited from owning printing presses or churches. America’s Founders understood this, and that’s why the U.S. Constitution mentions private property more often than any other right.

Yet government regulations have chipped away at this foundation of freedom, imposing restrictions on property rights that have consequences far beyond property itself.

First, the Florida Constitution prohibits cities from punishing their citizens by imposing “excessive fines” that are “grossly disproportional” to the person’s actions. If penalizing a responsible homeowner $100,000—a sizeable portion of the home’s value—for allowing a visitor to stay overnight in their home isn’t excessive, it’s hard to say what is.

Florida state law also caps the fines that cities like Miami Beach can levy at $1,000 for first offenders. Miami Beach’s new home-sharing fines—which start at $20,000 (and can’t be reduced by a city official)—far exceed that. Miami Beach imposes fines that are illegal under the state cap.

Case Logistics

Natalie Nichols is a long-time Miami Beach resident who has owned her two rental properties, which border the picturesque Biscayne Bay, for over a decade. One is a single-family home that Natalie sometimes occupies and sometimes rents. The other is a “four-plex,” which is a building with the architecture of a single-family home, but which actually contains four small apartments that are individually occupied. Natalie used income from short-term rentals to weather the economic downturn of 2008, a time when many people around her were forced to sell. Miami Beach should be targeting nuisance properties, not responsible landlords like Natalie.

The defendants are the city of Miami Beach and Miami Beach city officials acting in their official capacities.

The case was filed in Miami-Dade Circuit Court, on June 27, 2018.

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