Short term rentals as a non-conforming use

The 3d DCA issued this opinion the other day in Rollison v City of Key West. The 3d overturned a circuit court opinion that determined that the City could apply a later-adopted amendment to its zoning code to overturn an earlier staff/attorney interpretation that allowed short term rentals in a particular PUD so long as the unit was rented in this way for less than 50% of the year. The 3d found that her past rental practices constitute an existing non-conforming use and are therefore grandfathered against the new rules.

This case is important because it explores the boundaries of what is a "use" regulated by the zoning code and implies some significant limits on how local governments can use zoning (and code enforcement) to regulate or eliminate 'activities' (from rentals or adult entertainment) rather than their other regulatory powers when they want to regulate "activities" - especially established ones.

The owner before buying the unit had sought a determination from the City attorney that short term (1 week) rentals would be permitted under the applicable zoning and was advised of the "50%" rule above; the previous owner had engaged in the same behavior. Moreover, the City issued different types of Occupational Licensees for "short term" rental (which met the 50% rule) versus "transient" rentals (where units were rented for <28 days for more than 50% of the year).

The City then changed it's official position, adopted new definitions of transient accommodations that changed the definition and tried to apply that to Ms. Rollison's unit. A first attempt was overturned for failure to follow the zoning change notice requirements and when a the rules were adopted a second time, she sued for declaratory relief again, asking for a determination that the rental activity was a non-conforming use grandfathered under the zoning code.

The City won at the circuit court level and lost before the 3d. The City took that position that the interpretation was inconsistent facially with the ordinance, and the trial court apparently took the position that the Commission had to ratify the interpretation. The 3d held that the 50% rule was a permissible administrative interpretation of the language in the ordinance, that the City had officially adopted and applied that interpretation to Ms. Rollison and others over a period of time, and that rental activity consttituted a "use" that simply became non-conforming (and therefore grandfathered) after the new rules were adopted.

It shoudl be noted that local governments have in recent years done more and more to try to use the zoning code to ban activities that they deem problematic. They use the definition of "family" to try to control young people who rent a house together and may throw parties or otherwise act uncivilly. They ban parking work vehicles in residential zones as an "activity."

Why? Because zoning violations can be enforced through Chapter 162 code enforcement procedures that take place beofore a sympathetic Code Enforcement Board under procedures and processes that give the targeted homeowner far fewer protections than a criminal or civil procedure in county court. And the result, if successful, can create HUGE fines, far in excess of what they'd get under other approaches, that become liens on the property (especially if not homesteaded). And this also give them a hammer against rental property, as the unit owner becomes effectively liable for the actions of his or her tenants.

This decision indicates, however, that if local governments define an activity as a use, they also have to live the the protections that are given to non-conforming uses. Look to this defense being employed pretty widely - and then a new series of cases that test the limits of local government authority to end non-conforming uses without an amortization period.