jim scholl
City Manager, Jim Scholl

Commentary by Arnaud and Naja Girard……..

Four thousand dollars a week is not unusual for the rental of a house in Old Town – as long as you can rent to tourists – that is.

Last Wednesday on US 1 Radio’s Morning Magazine, City Manager Jim Scholl went on the defensive amidst accusations that the City has been rewarding illegal transient rental operators.

In a story published last week in The Blue Paper we revealed that in 2013 the City had changed the grandfathered-in date in its Lawful Unit Determination (LUD) ordinance from 1990 (before transient rentals became highly regulated and before every new unit had to be authorized through the Rate of Growth Ordinance) to 2010 (decades after ROGO and long after it became criminal to rent for less than 30 days without a special license).  This hush-hush amnesty program opened up the flood gates, rewarding cheaters and losing, forever, the opportunity for code enforcement to restore those illegal transient units back to the badly depleted residential housing stock.

Mr. Scholl claimed, during his interview with Bill Becker, that the legalization doesn’t worsen the current housing crisis, “Most of those units are being rented out as longer-term rentals,” he said. That claim is clearly contradicted by the applications filed with the City ‘s Planning Department under the new LUD ordinance.  Our count was 44 long-term residential units and 151 illegal transient units applying to be legalized [list as of April 2016].

Mr. Scholl also claimed that only those units that already have transient licenses are being legalized as transient rental units under the ordinance. However, Mr. Scholl himself was sitting at the March 16, 2016 Board of Adjustment hearing where 5 illegal transient units were legalized in connection with the Mermaid and the Alligator Guesthouse on Truman Avenue.  The application and protracted discussion clearly showed that none of the 5 units had ever been licensed for transient rental use.  All were long-term housing that had been illegally transformed into transient rental use and transient rental use was actually prohibited under their zoning designations.

In 1998 the Key West Inn Keeper’s Association conducted a confidential survey to determine how many transient units were being rented by local guesthouses in Key West – both legal and illegal.  The number of illegal units was 239 but that included only those rented by owners who were willing to respond to the compromising question. There can be little doubt that the number must be much greater today.  In light of the current housing crisis, the goal should clearly be to find those illegal transient units and turn them into long-term rentals. The amended LUD ordinance does the opposite.

To be clear: If a property owner created extra units without permits or was renting his house or his residential apartments to tourists on or before April 1, 2010 then, under current City law (as interpreted by top officials), he has the right to have his illegal transient units legalized.

The LUD applications paint a sobering view of the City’s fight for affordable residential housing. Transient rentals have been spreading like a cancer.  They expand by capturing the house next door, the house on the right, on the left, at the back or even across the street. Residences are divided into hotel rooms, most of the time without building permits or proper zoning, density or licenses. When the deed is done and the City has legalized the many civil and criminal violations, the property is often sold on the market with millions of dollars in added profit.

How many well-connected property owners are now creating new illegal transient rentals, keeping in the back of their minds the hope that in a not so distant future the City will once again move up the date for grandfathering-in their illegal business?

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