Miami Beach Threatens to Ruin the Lives of Home-Sharing Property Owners

by Matt Miller
September 12, 2018

How far can the government go to prevent people from using their property in a way the government doesn’t like? We may be about to find out, as Miami Beach, Florida, is threatening to financially ruin and imprison property owners who conduct short-term rentals in the city.

Miami Beach already has some of the most draconian penalties for home-sharing in the nation—$20,000 for your first offense and $100,000 for your fifth, with liens attached to all of your properties until you pay the fines. You might think these penalties are being doled out to loud party houses, or places that are otherwise engaged in serious disturbances of the peace. Wrong. These fines are being issued for simply renting a room in your house for less than six months, usually on a platform like HomeAway or Airbnb.

These fines are beyond excessive, which is why the Goldwater Institute is suing Miami Beach under the Florida Constitution. The government cannot just fine you into oblivion in order to stop you from doing something it does not like. Fines must be proportionate to the alleged offense involved, and peacefully renting a room in your house on Airbnb should not subject you to potential $100,000 fines and loss of your property. That’s the very definition of “excessive.”

Now, in a “hold my beer” moment, Miami Beach is threatening to go even further and jail people for renting rooms on Airbnb. Under a proposed ordinance, anyone who is found to be operating a business (like renting their property on Airbnb) without a license would be facing up to 60 days in jail for their third offense.

Let’s do the math. If you rent a room in your home on HomeAway or Airbnb, you receive a $20,000 fine for the first offense; a $40,000 fine for the second offense; and a $60,000 fine for the third offense. At this point, you have already accumulated $120,000 in fines. Under the new proposal, you would also receive $6,000 in fines for operating without a business license, and you would be facing 60 days in jail.

The government should not be able to ruin someone’s life just because that person engaged in a peaceful—though prohibited—use of their property. Yet personal and financial ruin are precisely what homeowners in Miami Beach are now facing if they dare to let someone rent their property for a weekend.

Whether it is a parent, an employer, or the government, one can almost always guarantee compliance with a command if the penalty for non-compliance is completely over-the-top. Imagine the government issued million-dollar fines for speeding. Compliance would almost certainly be nearly 100 percent.

But that would not make the penalties just, however—just merely effective. Fortunately, Americans enjoy the protections of both the U.S. Constitution and their individual state constitutions. And these supreme laws of the land require that justice actually be just, by demanding due process and prohibiting the government from imposing excessive and unjust punishments on people who violate the law.

Nobody wants to live next door to a party house. People who rent their homes irresponsibly should be issued citations for causing public nuisances and penalized accordingly. Every city in America can already do this under existing ordinances. But Miami Beach is not targeting party houses. It is targeting everyone who rents their home on a short-term basis, turning all of them into jail-time criminals and saddling them with crippling fines. This approach may prove to be effective, but it is both unjust and unconstitutional.

Matt Miller is a senior attorney at the Goldwater Institute.