Jan 202018
 

OP/ED by Arnaud and Naja Girard……..

Hurricane Irma has left hundreds of people homeless in the Florida Keys. We wanted to know how the local government was handling the housing crisis.

Officials seem genuinely concerned. They hold meetings and workshops on workforce housing issues. But clearly the problem predates the storm. Locals believe that, in recent years, too many residential units have been allowed to be transformed into vacation rentals.

In this context we were surprised to learn that this week the City Commission voted to approve yet another legal scheme that would allow more of those desperately needed residential units to be transformed into transient accommodations.

Why is this happening? The answer is simple: Money. And a lot of it.

For the alchemists of the old days the greatest achievement was to turn lead into gold. It was called the “Grand O”. In Key West of late the alchemists are developers and they know no greater feat than turning residential housing into tourist housing. According to developer Pritam Singh, one of the most famous in this genre, the benefit of such a successful magic trick is 6-fold. A $150,000 residential unit turns into a whopping $1 Million hotel room.

For about a year now we’ve been watching Ed Swift, another well-known Key West developer, in the “Grand O” transformation of his Key Cove residential properties on Roosevelt Boulevard into transient rentals.

As you’re going to see, being an insider is pretty much essential to summon the magic; little people are just casualties on the side of the tracks.

In Key West, renting to tourists, for less than 28 days, without the proper transient rental license is a big deal. It is actually a crime that [per code] can land you 60 days in jail and cost up to $5,000 in fines per violation.

Meet the Mingos, an older couple originally from Key West. In 2016, trying to offset expenses and pad their income, Gwenuel and Cynthia Mingo had their modest Key West family house on Baptist Lane advertised for rent on Airbnb. Code enforcement officials found the add online, posed as potential renters and brought them before the city’s special magistrate for violating the transient rental code. They did not have a lawyer. They dutifully handed over all of their rental records as per the subpoena.

Here they are [below] on video at the April 27, 2016 hearing, huddled together behind the podium. They’d been cited once before but had misunderstood the law, believing they were in the right as long as they no longer rented the home more than once a month.

The special magistrate found that even though they had been renting only once a month, their contracts were for less than 28 consecutive days. They were slapped with nearly $30,000 in fines and a $106,000 “suspended fine” [to be paid if caught again within 60 months].

Now compare and contrast with what happens when Mr. Swift, developer and Conch Train owner gets cited four times for renting his Key Cove residential units to tourists. Each time he lawyers up and doesn’t produce subpoenaed documents. He is particularly hard to catch because his company does have some legal transient rentals in town, so his marketing is not immediate proof of the illegal rentals.

So how did they catch him?

The last time was in August of 2016. A neighbor called code enforcement to complain that three of Ed Swift’s Key Cove residential units were being rented to tourists. Code Enforcement officials found six rental scooters in front of Unit #5. The tourists inside the unit explained that they had simply been switched from another guesthouse to that unit. According to the neighbors it was a recurrent problem.

Interestingly, while all code enforcement hearing videos are available online, some of those videos appear to be missing the segments associated with Mr. Swift’s violations. Records show that on his third violation, Swift was ordered to pay just $250 in court costs. Assistant City Attorney Ronald Ramsing justified the overall leniency claiming Mr. Swift was in the process of legalizing his transient units at Key Cove.

 

On November 15, 2017 (again video segment missing) Swift was ordered to pay $5,000 plus $250 in court costs for his company’s fourth violation in three years [plus $5000 in suspended fines from a previous violation].

Records at the Planning Department show that Mr. Swift had gotten his hands on some unusual legal instruments called “unassigned transient business tax receipts” [let’s call them “transient licenses”]. (In theory if a transient unit is converted to long-term residential use or if a hotel redevelops and builds less units, the extra transient licenses survive. They can be sold and transferred to a new location separate from the unit itself.)

Apparently, the city is now ready to recognize those unassigned transient licenses as a bonafide way to turn long-term residential units into transient ones.

But there was a problem with Mr. Swift’s unassigned transient licenses: they originated from the Santa Maria Hotel on Simonton Street, where zoning allows transient rentals. Under the current law unassigned transient licenses are only transferable if they originated from a location where transient rentals are NOT allowed.  As a result, Mr. Swift’s so-called transient licenses had been stamped by the licensing department with the clear prohibition: “NO USE PERMITTED” and in October of 2016 the Planning Director denied Swift’s request for a transfer based on the prohibition found in the code.

But when you are a powerful insider, apparently, you can just get the City Commission to tailor a new law for you. And indeed, last Wednesday, the City Commission voted to allow any unassigned transient licenses to now be used to convert long-term residential units to nightly rentals.

The City lists 31 currently “unassigned” transient rental licenses. But the number could explode.

Here’s how:

Hotel owners have been known to create 2 or more hotel rooms from a single transient unit. The second room is referred to as a “lock-out”. In the city of Key West “lock-outs” are prohibited so developers call them “two-bedroom suites”.

Hypothetically, a hotel or guesthouse owner could combine two existing units under one transient license. The owner is then left with one “extra” transient license and registers it as “unassigned”. Under the new law, it could then be reassigned to any residential unit the owner may want to convert into any type of tourist accommodation [provided zoning at the new location allows transients].

In City licensing records we found one suspicious 2017 reassignment of two transient licenses from a motel owner to himself. His next move could be the creation of two more guest rooms using the detached unassigned licenses.

Last year, when Pritham Singh opened Ocean’s Edge Hotel & Marina on Stock Island every unit had been divided into two separate guest rooms with separate keyed entrances and facilities. The county found the practice perfectly “legal”.

The Marriott Beachside Hotel in Key West has about 100 of these “suites” and Parrot Key, which Singh developed, has 43 of them. “The lockout units in both of those Key West resorts can be separated and rented out individually,” Singh told a Key West Citizen reporter last year.

There is some indication that Mr. Singh’s methods are now being emulated by Ed Swift at his Eisenhower development project. Each of the 10 new transient units on Eisenhower are designed with up to 4 bedrooms [35 total bedrooms]. Plans show the majority appear to have separate entrances. Although only 11 parking spaces are required for a 10-unit guesthouse a landscape waiver was granted to allow Mr. Swift to provide 23 parking spaces for his guests.

At the December 21, 2017 Planning Commission meeting, board member Gregory Lloyd, who cast the only dissenting vote, observed: “I guess this is 10 [units] that somehow ballooned into 30”.

The new ordinance, deregulating the transfer of unassigned transient licenses, combined with the new trend in multi-bedroom “suites” could create an endless source of new transient licenses which in turn would be used to convert residential housing into tourist accommodations.

The process could go unchecked until hundreds of residential units have been lost, at which point it will be described as an “unintended consequence” of an unforeseen “loophole”.

The City Commission should address this risk by, at a minimum, prohibiting reassignment of unassigned transient licenses to residential units.

~~~

CORRECTION: An earlier version of this article mistakenly stated that the “development agreement” for Key Cove clearly prohibited transient rentals; however, it has since been discovered that we were mistakenly given the development agreement for 3029 Roosevelt Boulevard [also called “Key Cove”], when we requested the documents for Key Cove Landings from the City.  Our apologies. We did go ahead and check the Declaration of Condominium for Key Cove Landings LLC and found a provision that prohibits transient rentals whether or not the government allows them [Official Book 2320 Page 427].  We have requested the correct information from the City and will follow-up.

The Blue Paper has been dedicated to bringing you the truth through in-depth reporting, however we have been operating at a loss for nearly five years. Only support from our readers can keep this mission going. We need approximately $5,000/month to pay our expenses and the salary of an additional investigative reporter. We have over 6400 subscribers, and thousands more who happen upon our website each week. Our most recent documentary was seen by over 175,000 people yet only 34 people so far have agreed to pledge at least $5 /month to support our work for a combined total of $348/month. [Thank you!] Short of reaching our financial goal The Blue Paper will shut down on its fifth-year anniversary, March 15, 2018. Please pledge your support for a continuing and even better Blue Paper on Patreon.

 

SEE RELATED: CRIME PAYS IN KEY WEST ESPECIALLY WHEN YOU GET CAUGHT   

SEE RELATED: HOUSING HOCUS-POCUS: IS THE CITY LOSING THE WORKFORCE HOUSING BATTLE ONE HOUSE AT A TIME?

SEE RELATED:  Blue Paper coverage about the development of Oceanside Marina into 175-room Ocean’s Edge HOTEL & Marina…

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Arnaud and Naja Girard
Arnaud and Naja Girard, owners and editors of the new, digital, Key West the Newspaper (The Blue Paper) previously reported for the former Key West The Newspaper, Key West’s longest running independent weekly, published by Dennis Reeves Cooper, Ph.D., from January 1994 until November 2012. The Girards are perhaps best known for their discovery of and extensive research surrounding the US Navy’s 1951 claim of ownership of Wisteria Island but are also responsible for top investigative stories including breaking news coverage of the highly controversial in-custody-death of Charles Eimers on Thanksgiving Day 2013, the catastrophic police tasing of Matthew Shawn Murphy, and the property tax scandal involving Balfour Beatty to name a few. Arnaud and Naja have lived in Key West since 1986.

  15 Responses to “City’s Deregulation of Transient Licenses Will Reduce Residential Housing”

  1. Bravo, Arnaud and Naja! Bravo!

    Alas, it appears the bulk of your readers prefer fake news, to blue paper news, evidenced by their paltry financial support.

    I had a string of dreams last night, seemingly captained by Arnaud, about really bad shit happening to Key West, because it has ignored the blue paper.

    The last dream convinced me that I should take the earlier dreams seriously.

    Specific topics raised in the dreams were the blue paper’s explosive reporting of the murder of suspected homeless man Charles Eimers by Key West police officers, the ringleader of whom I heard yesterday is active in a local evangelical church; and the blue paper’s explosive reporting of the Higgs Beach dog park sitting on top of African slave remains.

    This morning I called a good friend of mine in the mainland, who is a professional psychic and is known to readers on my own website as Hoodoo Witch. When I told her about my dreams last night, and that I came out of them convinced something really bad is going to happen to Key West, she said she just then recalled a dream from last night, in which she was on an island somewhere and there were terrible winds coming at the island from all different directions, and she said to herself, “This is really bad and I need get away from here.”

    That all happened after I flew from Key West to Birmingham yesterday, and then drove to Tuscaloosa, where I will be hanging out for a while, scouting around to see if I am to live around here, or live here and in Key West, or live just in Key West.

    After last night’s dreams, I suppose a perverse part of me wants to be in Key West to see its karma play out first hand, but another part of me wants nothing to do with that.

    I gave Key West and the Florida Keys 17 years of my life, on my dime, trying in my own way what the blue paper under Arnaud and Naja have been trying to do in their way, and I can’t say I had any appreciable effect, so why should I go down with that seriously troubled ship?

  2. This is just more proof of the total corruption of Key West. Pay the right people and you can even get away with MURDERING EIMERS

    The Blue Paper can expose it but can’t stop it.

  3. New state legislation if passed will make this agreement mute. Taking the control from the city and giving it to the Stae in regards to overnight vs months rentals is not good for a city facing affordable housing issues,

  4. The city has a weapon it so far has declined to use. That weapon is to jail illegal transient rental violators each time they get caught. Imagine Ed Swift being jailed each time he gets caught. Imagine that being reported in the Key West Citizen, each time.

    Looks to me the city government is in cahoots with the likes of Ed Swift. Why? Because the city attorney’s office negotiates downward the Illegal transient rental fines imposed on the likes of Ed Swift. Because the city magistrate, who is paid by the city government and hears transient rental fine cases, agrees to such deals, and even makes such deals directly with transient rental violators such as Ed Swift.
    Instead, city code enforcement, the city attorney office, and the city commission should insist on maximum fines.

    City Attorney Shawn Smith himself told me that the city’s police department answers to him on all things legal. Shawn answers directly to the City Commission. That the chain of command and where the buck stops on why city police are not arresting and jailing transient rental violators such as Ed Swift.

    The same approach needs to be taken by the county government re transient rental violators.

    The other problem, for which Pritam Singh’s hotel on Stock Island is a proxy, is a bit more difficult to redress.

    Just my opinion, dealing with Pritam and his field general Jim Hendrick, former county attorney, disbarred convicted felon, is like dealing with the Devil. In fact, in his home one night, Jim proved that to me, by telling me he was going to prove that Pritam was not possessed by Lucifer, which I had published at my website, was the case.

    I invited Jim to make his argument. Jim said, Pritam was the greatest salesman he had ever met. He could make anyone look at what he wanted them to see, and not look at what he did not want him to see. I said, that’s how Lucifer sells. I rest my case.

    Of course, that also is how Jim operates when he argues for his real estate developer clients before local governments.

    A protégé of Jim is local attorney Barton Smith, of whom a county commissioner named Sylvia Murphy said maybe a year ago, during a county commission meeting at which Smith had spoken in favor of the commission adopting a change in its land use regulations, or perhaps in its comprehensive plan, that, if Barton Smith was for that, then it had to be bad for the county, so she was against it.

    That, I say, is the approach that should be taken by both the county and the city toward any real estate development in which Pritam Singh, Jim Hendrick, Barton Smith and Ed Swift are involved.

    Ah, but what about property rights? What about due process? Well, when someone repeatedly proves he cannot be trusted to tell the truth about his real estate development, or his client’s real estate development, then that is sufficient legal justification to stop doing business with him.

    Furthermore, I say, the county and city governments should not allow anymore new commercial residential, including hotel, motel, etc., development, because the Florida Keys are way past overdeveloped, and there is not a person living in the keys who can look in a mirror and honestly argue otherwise.

    All new residential development should be actually affordable rental housing on county and city land managed by the Housing Authority.

    That would not preclude someone owning, say, a home destroyed by a hurricane, rebuilding that home. Nor someone owning a trailer, in which he or she lives, tearing down that trailer and building a home. If that home is to be lived in by that person, and not rented out when the person is not in the keys.

    I believe the school district might be in an entirely different boat. It owns land on which it can build actually affordable rental housing for its teachers and it should go that route.

    • I see nothing illegal or wrong for a person to rent out a house they own. Many only buy houses to use for a few months out of the year. As long as they rent it for a term longer than 30 days. Are tricks landlords can use to bypass any law the city writes.
      Now lets understand this is a tourist town and it needs rentals. In return the tourist creates jobs and brings in money. Key West dam near hit another 1935 disaster. Had you lost connection to the mainland KW just might have been years to rebuild.
      It still is far from recovered. Take a look at the live cams, Sloppy Joes, Wicker House, Ft Zack beach, southernmost point and others. They all show that tourist have not returned yet.

      Yes some break the laws and get off easy but they are bribing the right people.

      • My comment, Jiminkeywest, was prospective. The last thing the Florida Keys need are more snowbirds and more tourists, which translate into more residential development: houses, condos, townhomes, hotels, motels, lodges, etc. I doubt, under the law, there is any way to stop current snowbird homeowners from renting out their homes for, say a month, or two, or three, while they are not in the keys. See my comment under Bill Hunter’s PR release in this same blue paper edition, that he has filed to run for the District 2 county commission seat.

  5. When was the last time we had “affordable” housing in Key West? It certainly hasn’t been anytime in the past 25 years. From my own observations, it seems like the people who are complaining the loudest are split into two categories: the ones who have most recently arrived, and those with the lowest skill sets.If you needed less than a day to learn your current job, that’s probably you. Don’t cry the same tired old song about who is going to pour the drinks and mow the lawns for the rich. People who really have money will always be able to pay for whatever services they need regardless of price. In the meantime, put down your drink, learn a marketable trade, save your money and come back when you can afford to live here.

    • KW mostly hires low education workers. The question is why when as a tourist we pay high prices for drinks, food and lodging but the help is so underpaid? Only jobs that earn tips are worth having. They either need find a high pay job or get out of Dodge before too broke to leave. I blame most of it on the illegals and hope Trump boots all of them out as that is the only fix.
      We will always need someone to make our drinks and clean our rooms. And at some price do agree they can be found.

  6. Your view, Ben, kinda reminds me of what I sometimes say: The Florida Keys are a hurricane zone. If hurricanes bother you, then move to where there are not hurricanes.

    In fact, Ben, there is a lot of actually affordable housing in Key West, which is managed by the Housing Authority. There is regular and senior housing. There is a longish waiting list to get it. First come, first serve.

    I signed up in the fall of 2104, for senior housing, and got to the #1 spot (next in line) in November 2017. I by then was in better financial shape and was renting an apartment in good friends’ home, so I passed on moving into the senior housing.

    My one-BR senior housing unit would have cost me around $850, including utilities, per month. There would have been no first, last and deposit. If I had been low income, the rent would have been 1/3 of my income. In my case, my Social Security, was $850 per month. 1/3 of that would have been my rent. Around $40 more, if I wanted an air conditioner. About the same, if I had wanted cable TV.

    The city and the county have land on which they can build such housing by partnering with the Housing Authority. Instead, the city and the county have spread their legs wide for private developers, who cannot build actually affordable rental housing and make a profit, without being given the land and/or significant government subsidies.

    The rents the Housing Authority receives pay off the costs of construction and maintenance, and can fund more such housing to be built.

    My impression has been, the city and the county do not like “project housing”, it does not agree with their view of the image of Key West and the Florida Keys, which the public should see. Their view seems to match your view. Otherwise, they would have partnered with the Housing Authority years ago, instead of continuing to lie down and spread their legs wide for developers.

    • This is a major part of Key West housing problem. It needs the rental units for working people not retired people. Sure they want to live in Key West but when a worker moves to KW and can only land a $10 to $15 an hour job then they will figure life out fast. They have dam near no chance in hell to ever buy even the cheapest place they can find unless they arrive with a hell of a lot of money and even then few if any banks will lend them the rest of the money. Banks look at income verses payments plus taxes and insurance. With such a shortage as claimed then we need the housing for WORKERS not people that want government paid in KW to retire. If you lack the income to retire in KW then you need to find another place.

      • Jim, even if a “worker” were able to find affordable housing and work at a job for 20 or 30 years, what then happens to the housing stock when they retire? Are those workers expected to pack up and leave the city they have served all their working lives? I doubt that would go over too well with all the liberal bleeding hearts. No, they will then expect to stay in the affordable housing at the 1/3 retirement income rate that Sloan mentioned. But we always forget to ask “Where will the new worker live that will need to come in to replace that person who retires?” It’s a never ending pyramid game that simply cannot be played in the Keys. In order to maintain a quality of life even close to what we have today, the Keys needs to eat up and spit out a constant stream of low income, low skilled workers who arrive for a couple years, work hard, have some fun and then leave.

        • They are not needed if they can’t work. Sure they should receive a place to live but not in Paradise. Either they can afford KW or they can’t. I overlooked that yes by taking up an apartment they leave no place for that new worker even if that worker stays a few months. Unless action is taken fast KW will have a serious problem in finding the low income workers. See plenty of help wanted signs . Now at $12 an hour they will need to work 60 hours a week just to afford a room with shared bath. Sadly many come to KW thinking what a great place to live. Then reality kicks in and that bank account soon hits zero. We do not owe anyone retirement in KW. The tax payers are footing the bill. What little housing KW has is needed for actual workers. The reason wages are so low is based on supply and demand and the illegals solve the supply part and will work 12 hour days just to stay alive. Trump is trying to fix it by deporting them.

  7. The city has more than enough tools to stop illegal rentals if they really want to stop it. They could stop even most of the legal developers but won’t for reasons that seem to profit them or the city. The more high end buildings create a huge tax base..

    Maybe they need to wake up to simple facts and use what ground they have to create low cost housing for WORKERS . No developer will ever create any as it is not profitable. And yes many will take the chance of getting caught and pay a fine. If careful they can rent within the law to tourists for 30 days for far more than a worker could ever pay. Just word the contract in a way to not violate the law. You can not stop a smart landlord beating the system .

  8. The Florida Keys should have been made a National Seashore right after World War II. The residents who were there at the time when they decided to leave (the land would be purchased at the market value at the time or passed away, the land would be given to the estate at market value at the time the owner passed and the land would revert to the parks system. It would be a really beautiful place to visit if it was left in that state. The Navy would still maintain their presence there as long as their services were needed. If they left since it is ALREADY government property, it reverts to the parks system. I’ve been coming to the Keys on and off since 1957 and the Keys are trashed compared to how it used to be to the way it is now.

    • We been going since 1973 and fell in love with it. Dam near moved to it but didn’t because of family. In some ways it was better but after the new 7 mile bridge it was a lot easier to drive. Lets face it that seven miles was pure hell. Mostly we only care about Key West old town. We can afford even the high priced lodging. The wife loves the Curry Mansion and for the last couple years it is our only choice unless full. We visit it about 30 days out of the year and mostly in the warmer months. Yes in last few years seen a change that has turned parking lots into so called places to eat. Will admit Irma has destroyed a lot of it to the point of can’t be repaired. Things like docks can be replaced but places like Ft Zack beach will take years and the trees will never grow straight again.

      As to to removing the people even after WW2 would never happened and shouldn’t. In short you either love it and accept it or stay away. Yes has housing problems and always will. The very rich found a cure on Sunset Key.The one human family is great Yes many LGBT people and dam near never have any b i or gay men hitting on me unless I go into a gay bar.