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How Will Florida's Two-Week Vacation Rental Ban Impact Already-Struggling Property Owners?

[Updated: Aug 26, 2020 ] Apr 02, 2020 by Liz Brumer
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On Friday, March 27, 2020, Florida's Governor Ron DeSantis passed an executive order suspending vacation rental activity for two weeks. It comes as no surprise to many. As the coronavirus outbreak develops rapidly across the country, this effort is an attempt to slow or stop the spread of COVID-19, especially in travelers from other cities or states.

Short-term and vacation rentals like those available through Airbnb and VRBO as well as hotel chains have taken a beating since the outbreak first started in early March. Cancelations for vacation and short-term rentals that were scheduled for March and April have skyrocketed over the past month. However, in Florida, many short-term rentals were being advertised and booked as an ideal spot to shelter in place or self-isolate or were becoming much needed lodging for essential personnel.

This mandate requires any current vacation rental to cease activity, putting both short-term rental property owners and renters in a difficult spot. No new rentals are allowed, which means hosts who rely on rental income to help cover property-related expenses like property taxes, insurance, and mortgage payments are now guaranteed a 25% reduction of income in the next month.

The briefing stated that "those violating the order are subject to criminal sanctions, including potential 2nd-degree misdemeanor charges, and potential revocation of vacation rental licenses."

Feedback from short-term rental property owners about this mandate is mixed. Some understand the need to stop the spread of the virus as quickly as possible, even if it means short-term losses, while others see this order as adding to the potential problem. Since hotels and motels are not included in this ban, this policy eliminates a large number of rental units from being used that often offered a more secure and less populated place for people to self-isolate.

In response to this act and the impact of the coronavirus on hosts and rentals in general, Airbnb has announced they are allocating $250 million toward partial reimbursements for hosts who had cancellations directly relating to COVID-19 that were booked on or before March 14 with check-in between March 14 and May 31, 2020.

This, among Federal policies like the $350 billion in emergency loans for small businesses, will help vacation and short-term rental property owners for the time being, but it's unlikely they will be enough if continued restrictions or mandates like this one are extended for a long period of time.

Florida, despite its efforts to minimize the spread, is over 7,000 cases as of this writing. Now with a statewide mandated stay-at-home order, which went into effect at midnight on April 1, 2020, I wouldn't be surprised to see this mandate extend beyond two weeks.

Other cities have already issued similar orders, including Palm Springs and Rancho Mirage in California. It's likely this mandate will also be adopted in other states and cities where vacation or short-term rentals are popular, especially if the virus continues to grow as experts expect.

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