Vacation rental fees are going up, citywide expansion may be next

The proliferation of vacation rental properties in Sarasota has brought the issue to the forefront from both fiscal and livability perspectives as city commissioners and staff grapple with balancing property ownership rights with those of full-time residents. 

At its Sept. 5 meeting the City Commission approved by a 4-1 vote, with Erik Arroyo opposed, the first reading of an ordinance to essentially double fees associated with registering and inspecting vacation rentals. The 2021 ordinance covered only properties on the barrier islands. The updated ordinance also requires annual renewals rather the current renewal every two years.

At its next meeting, on Monday, Oct. 2, the commission will consider expanding the ordinance citywide as some 700-plus identified properties, according to staff, are operating as vacation rentals within single-family neighborhoods throughout the city. 

Staff requested the fee increases to recover a larger portion of the costs to regulate the current 135 vacation rentals in the coastal neighborhoods. Annual costs to administer the program are $130,688, which includes $50,466 for a contract with Granicus, software that identifies via web crawling residences that are operating as short-term rentals. Even with the fee increases, staff projects total revenue of $47,250, recovering only 36% of the cost.

While nobody spoke against the fee increases during the public discussion portion of the hearing, several residents did bring up the need for citywide regulation of short-term rentals that they say are disruptive to their neighborhoods.

“We don't live in a deed-restricted neighborhood,” said Arlington Park resident Rob Grant. “We don't live in a condo. You are our HOA. You are our condo board. We need your help, folks."

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The proposed ordinance includes the new fee structure for applications, inspections, re-inspections and change of ownership. The Granicus software has identified more than 700 inland residences operating as vacation rentals, and adding those to the rolls would likely require more staff for oversight and enforcement. Residents who have spoken to commissioners expressed hope that regulating short-term rentals in their neighborhoods will help mitigate associated nuisances, but much of that will fall to law enforcement.

“We need to move the fees and in the direction that they mitigate the costs. However it's done I'm sure we can find efficiencies in the process, but the citizens, the taxpayers of Sarasota should not be subsidizing the industry of vacation rentals,” CCNA President Richard Harris told commissioners. “We need to capture the actual costs of what it takes to administer the registration and the inspections of these vacation rentals.”

To capture the city’s cost would require a renewal fee of $968.06 per vacation rental renewal fee per year for the current 135 registered units. Under the new ordinance the current renewal fee is $350 per year.

“Rest assured we will be back when it comes time to promote this to go citywide,” Harris added.

That time comes Monday.