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Tourism & Cruises

The punishment for running an illegal Airbnb in Miami Beach is likely to get a lot worse

 

Miami Beach is adding jail time to the list of penalties for hosts with illegal Airbnb listings in the city.

The city announced it will prosecute hosts who provide bogus business license numbers in order to list their properties on the site. The penalty for the criminal violation is 60 days of jail time and/or a $500 fine, according to Melissa Berthier, a spokesperson for the city.

The announcement followed a settlement this week with Airbnb over the city’s latest short-term rental ordinance. Previously, Airbnb used geo-fencing to prevent hosts in restricted areas from listing on the site. Now, Airbnb must list hosts’ business licenses instead. Airbnb will not be required to verify that the license numbers are accurate and belong to the correct property.

As part of the settlement, Airbnb will pay the city $380,000 to use at its discretion, “including to educate residents about homesharing rules.”

Both sides declared the settlement as a victory, highlighting just how difficult it is for local governments to gain concessions from the Silicon Valley vacation rental giant.

“What it’s going to boil down to is our code enforcement department is going to conduct searches on Airbnb’s website and verify,” said Aleksandr Boksner, chief deputy city attorney for Miami Beach. “That will facilitate the ability to deal with the enforcement of the proper display of the numbers. It exposes the host to fraudulent criminal penalties.”

 

Miami Beach prohibits rentals of six months or less in most residential areas, but allows them in a few sections of the city. Hosts are required to obtain a business license and resort tax registration certificate. Miami Beach has the most expensive fines in the country for illegal short-term renting — $20,000 for the first violation and $40,000 for the second, with each subsequent violation costing an additional $20,000.

That hasn’t stopped an illegal short-term rental market from thriving in Miami Beach. The city licenses fewer than 1,000 short-term rentals, but approximately 4,500 entire homes are advertised on Airbnb, according to data from BNBVestor, an analytics tool for investors that scrapes the Airbnb site. Since the fines went into effect in 2016, Miami Beach has only been able to collect $500,000 of the nearly $8 million it has levied against property owners as of June.

Airbnb sued Miami Beach in Miami federal court in January arguing that its latest short-term rental ordinance violates a federal law that says websites are not responsible for policing the content on their platforms. The ordinance, passed in September 2018, said that as long as Airbnb used geo-fencing, the company did not need to require hosts to provide the business license number and resort tax registration certificate number on their listings. Airbnb opted for the geo-fencing, installing the system on its website late last year.

Then in December 2018, the city clarified that Airbnb needed to require hosts to provide a business license number and a resort tax registration certificate number on their listings even if the site chose to geo-fence. Airbnb sued, saying requiring both actions would amount to policing content on their site.

The two sides came to an agreement late Thursday. Airbnb will cease to use geo-fencing in Miami Beach and instead will require hosts to post a business license number and a resort tax registration certificate number on their listings.

The city says the new requirement will enable code enforcement to more easily police listings.

Other short-term rental platforms have adhered to the business license requirement. Still, illegal listings on those sites persist.

In March, the Miami Herald followed a Miami Beach code enforcement officer as she responded to complaints of illegal short-term renting at an apartment building at 1518 Drexel Ave. Vacationers found the apartments on Hotels.com, Expedia.com and Despegar.com. Most of the listings had the required numbers; all were illegal.

Berthier, a spokesperson for the city, said via email that it is a criminal violation for platforms and hosts to post fraudulent business registration numbers. Those who violate the law are subject to a penalty of 60 days in jail and/or a $500 fine. It’s not clear how the city would pursue Airbnb because the settlement specifically bars Miami Beach from penalizing the company for failing to verify whether the numbers are real.

Miami Beach commissioners considered prosecuting hosts with illegal rentals last year. The proposed measure faced opposition and ultimately did not pass.

Chicago, San Francisco, and Louisville also require Airbnb listings to display short-term rental certification numbers.

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