Unchecked and unregulated: the urgent need for short-term rental reform in Melbourne Beach
Abstract
Short-term rentals (STR) are quickly becoming one of the dominant business activities in Melbourne Beach and are transforming our Town in ways we cannot afford to ignore. The time to act is now. If we don't regain control, our Town's character will be at risk. Our current ordinances and enforcement processes are woefully inadequate in addressing this rapidly growing sector. While STRs may boost STR owner income and tourism, they also pose significant risks to the very fabric of our neighborhoods, introducing increased traffic, noise, parking problems, property damage, trash, late-night disturbances, and, in some cases, crime.
For years, our Town’s leadership have been fully aware of the need for urgent overhaul of the ordinances and code enforcement mechanisms regulating STRs. Yet, at best, there has been no action; at worst, there has been a deliberate delay in any meaningful reform. What’s most troubling is the constant, disheartening refrain from current and former commissioners and Town staff that the State restricts our Town’s ability to regulate STRs in any meaningful way. The Town commission and Town manager have shown nothing but apathy and negligence - failing to implement even a single reform. It raises the question: Is this wide-open, poorly regulated, and negligently enforced system exactly what they want? Despite the issue being a focal point of Town Commission meetings and election campaigns for more than a year, little has been done to address the unregistered STRs that are operating illegally.
Five critical challenges we face
Undercounted STRs: The number of STRs operating in Melbourne Beach is far greater than previously acknowledged by the Town.
Outdated STR ordinances and enforcement processes: Existing Town regulatory functions are comprehensively ineffective, leaving loopholes that allow STR owners to bypass regulation entirely with no penalty.
Underfunded and undertrained enforcement: Our Town’s enforcement efforts are drastically under-resourced to the point of negligence. We are simply not equipped to address these violations. We need staff and we must leverage technology to level the playing field. Today, the foxes are running loose in the hen house.
Deficient adjudication process: The Special Magistrate system we've chosen to handle these cases is insufficient and ineffective.
Potential missed tax revenue: Many STRs in Town are operating illegally; the Town, Brevard County and the State of Florida may be missing significant revenue.
Problem #1: Unregistered, illegally operating STRs
There are at least as many unregistered STRs as registered STRs in Town. Identifying unregistered STRs was relatively easy to perform, which begs the question of why the Town did not do this. There are commercial services and software that support identification and management of STRs, such as Granicus. We should contract one of these services immediately. Failure to do so is to knowingly allow STR violations to continue unchecked.
Problem #2: Inadequate STR ordinances
Our STR ordinances are toothless. They contain far too many loopholes and offer no real incentive for STR owners to operate legally. We should adopt best practices from other towns like Clearwater, Cocoa Beach, Hollywood, and Redington Beach, which all have faced and addressed similar challenges. Our goal should be to create an airtight regulatory framework that protects our neighborhoods and sends a clear message: Melbourne Beach is not a safe haven for unregulated STRs.
Problems #3 & 4: Insufficient enforcement & flawed adjudication
The inadequacies of our STR enforcement and adjudication systems are staggering.
Code Enforcement is staffed by a single part-time employee who only recently started, and the Special Magistrate is retained for the paltry sum of $15,000 a year. This is unacceptable! Such inadequate resourcing and marginalization of these mandates means that the town can only prosecute 10-12 STR violation cases annually. These illegal STR operators, fully aware that they will never be held accountable, continue to flout the law unchecked.
The Melbourne Beach Police Department (MBPD) cannot enforce or track violations of STR-specific ordinances because they have no information as to which properties are STRs.
Worse yet, there's a Town ordinance requiring STR owners to perform a background check on every STR guest and notify the MBPD 48 hours in advance if any guest is a registered sex offender/predator. The MBPD has no record that such a notification has ever been made.
The minimal STR violation fines in place make it more cost effective for STR owners to operate illegally than comply with Town’s STR regulations. We need a complete overhaul of our enforcement resources and authority - and we need it immediately.
Problem #5: Lost tax revenue
These STRs are businesses that must pay the Town registration, inspection, and registration renewal fees, that must pay the County tourist taxes, and that must pay the State sales tax. Since many STRs are operating without being registered with the Town, it’s not a stretch to think that at least some of these scofflaw STR owners may also be avoiding paying tourist taxes to the County and sales tax to the State when they are not booking a reservation through Airbnb or VRBO, which definitely happens as many STR owners/hosts also advertise and book through their own websites.
Preserve Melbourne Beach, Inc. members identified three whole-house STRs in Town that claimed property tax exemptions while renting out in excess of what is allowed by the State based on their guest reviews and minimum stay information. We met with the Brevard Property Appraiser Director of Homestead Compliance to report these likely property tax fraud cases. There are significant penalties for committing property tax fraud, but it is unlikely that the Town of Melbourne Beach will recoup anything more than the lost tax revenue plus interest as the Brevard Property Appraiser’s Office shares the penalty with investigators it hires to determine whether a property owner has committed property tax fraud.
Conclusion
Preserve the Town of Melbourne Beach, Inc. strongly urges immediate action to overhaul our ordinances, Town procedures, and code enforcement processes to establish a STR regulatory framework that fully reflects the will of our residents, within the bounds of current State law. We must intensify our efforts to pursue enforcement actions against STR violators, ensuring that our process is both thorough and swift. Melbourne Beach must not become a STR investor gold mine simply because we are ineffective at managing our Town.