The Florida Keys are the canary in the coal mine, an early indicator of issues that will affect Florida's future. For visitors from Dade, Broward, Palm Beach and beyond, the Keys evolved into Florida's playground. To these casual visitors driving south on US 1, the residential communities of the Keys are easy to overlook. But to the growth management practitioner, the geographically limited islands are reminiscent of Darwin's isolated Galagapos, a hothouse for the evolution of issues that will eventually affect other parts of Florida. 

     The communities of the Florida Keys date back to a time when more people lived in Key West than Miami. When wrecking, the rescue and plunder of ships unfortunate enough to run into the reef brought Key West the title of the wealthiest city in the United States, only to later declare bankruptcy. Shipping channels were replaced by rail and road; access, commerce and the economy were forever altered. Original rail worker encampments on Pigeon Key gave rise to the fast growing communities of Marathon, Islamorada, and Matecumbe. Tourism became the number one industry. 

     On the islands connected by bridges, developers dredged rows of canals and platted the seeds of new communities on the spoils. Tarpon, bonefish, tuna, snapper, even conch and lobster could be caught in abundance. The idyllic fishing and boating in the crystal, gin-clear waters that surround the islands proved hard to resist. Subdivisions sprung out of the low-lying islands of Cudjoe, Big Pine and Duck Key. More and more people were drawn by the lure of the Keys. The coral reef is now the center of recreational diving in the United States - all within a few hours drive of south Florida. Our love for Florida's own set of Caribbean islands grew as fast as its population and threatened to bring about its early demise. 

     Commercial uses along US 1 turned the Overseas Highway into a corridor of shell shops, strip malls and convenience stores seeming to stretch on forever, even by Florida standards. But with the provision of all the commercial conveniences of south Florida, life in the Keys became even more comfortable, and residential development in Monroe County continued to flourish. 

     More and more people built homes on fragile islands connected by bridges, but not yet served by modern sewers. Many became full-time residents and thrived off the tourist-based economy. Other people built second homes - their place in the islands for seasonal vacations or retirement. Still others brought RVs and mobile homes and left them in the Keys for occasional visits. Hurricane evacuation times on the Overseas Highway reached 30 hours; growth outpaced even the meteorologist's ability to estimate impending landfall. 

     Some local residents favored state oversight of local land use decisions. Local decisions were too often motivated by desire for even more development at the expense of the environment and quality of life. The fox was in the henhouse and Florida's unique national treasure was at stake. The state legislature adopted Chapter 380, recognized their plea, and the Florida Keys became one of the most important, and already over-developed, Area of Critical State Concern. Decisions made in the Keys were from that day forward placed under a state microscope, as state oversight brought local land use and growth management decisions to the halls of Tallahassee. Many of the ideas originally contained in Chapter 380 eventually made their way to the rest of Florida under Chapter 163 in Florida's Growth Management Act of 1985. 

     Vacation rentals are the newest in a long line of hot issues to make first landfall in the Florida Keys. You have probably seen them in your community or where you vacation. Perhaps you have even rented one. Every land use practitioner who has seen a vacation rental in an improved subdivision must turn their head and wonder: What is it zoned? Is it allowed? And what do the neighbors think?

     As a former Monroe County planning director testified, the vacation rental issue was previously not a problem requiring the adoption of an ordinance. In the recent past, there were perhaps less than 100 such vacation rental units. Rental agents now estimate that there may be more that 4100 vacation rental units in Monroe County alone. The vast majority of these vacation rentals are located in improved subdivision land use or zoning districts, which have traditionally served as family neighborhoods for more permanent residents of the Florida Keys. 

     As you might imagine, neighbors became concerned. A number of potential adverse impacts on neighborhoods, community character and the environment, were raised. A self-imposed vacation rental agent "hot line" was created to respond to neighbor complaints, but did little to appease the most vocal opponents who would rather call their Commissioner. The County Commission asked the County attorney to bring a test case under the nearly silent existing Code, which he likened to "going to play major league baseball, with a whiffle bat." Thus, in 1995, the Monroe County Board of County Commissioners directed that a series of public hearings be held to draft an ordinance that expressly addressed vacation rentals in residential neighborhoods. 

     After 9 public hearings, competing local interests reached a stalemate. The planning commission recommended two ordinances to the County Commission: one allowing vacation rentals and one prohibiting vacation rentals. The County Commission fared little better and was unable to decide the politically charged, hot issue of the day. The realtors asked for an advisory referendum and the Commission willingly agreed to put the matter on the ballot. In November 1996, the following question was posed directly to the voters: "Should transient rentals of less than 28 days be allowed in (IS) Improved Subdivisions?" The voters of Monroe County responded 51% to 49% in favor of prohibiting transient rentals of less than 28 days in Improved Subdivisions. 

     The Board of County Commissioners was back in the hot seat, and after 3 more public hearings, finally passed and adopted Ordinance 004-1997. The Ordinance prohibits vacation rentals of less than 28 days in Improved Subdivisions (IS) and other environmentally sensitive areas, but allows vacation rentals in most commercial districts. The Ordinance also created a new land use sub-district, called "Improved Subdivision-Tourist Housing (IS-T)" district, which expressly allows short-term vacation rentals. Where vacation rentals are allowed, a special permit is required under standards regulating short-term vacation rentals to ensure that the use was compatible with surrounding land uses, community character and the natural environment. Although any IS district could be rezoned IS-T subject to a set of standards to prevent spot re-zoning, the rental agents claimed that obtaining an IS-T rezoning would be a difficult, if not insurmountable task. 

     Because the Ordinance affects the use of land in an Area of Critical State Concern, Section 380.05, Florida Statutes, mandates that amendments to local land development regulations be reviewed by the Department of Community Affairs, for consistency with the Principles for Guiding Development set forth in Section 380.0552, Fla. Stat. Notice of a proposed rule approving the Ordinance was published in the Florida Administrative Weekly, and a challenge was filed under Section 120.56. 

     After the 12 hearings that were previously held by the local government, the state held 3 more public hearings on the issues. In the interim, newly amended Section 380.05(6) Fla. Stat., became effective and changed the rules of the game in mid-stream; the Department was now required to approve or reject the Ordinance by final order, rather than by rule. By stipulation of the parties, the DCA withdrew its proposed rule (which might have been subject to the APA's EIS requirement) and filed a final order instead. The DCA's final order was then challenged and taken to hearing by a group of property owners, the newly-formed Vacation Rental Managers Association, the lower Keys and Marathon Chambers of Commerce, and the Pacific Legal Foundation, as an amicus. At the request of the Department, Monroe County intervened and led the defense of its own Ordinance in the state Administrative Hearings conducted under Sections 120.569 and 120.57(1), Fla. Stat. 

     Both the ALJ and the Secretary found the Ordinance to be consistent with the Principles for Guiding Development adopted under the Florida Keys ACSC. Rathcamp v. DCA and Monroe County (Final Order DCA98-OR-184, DOAH Case No. 97-5952). The petitioners then appealed this decision to the 3rd DCA. Rathcamp v. DCA and Monroe County, 24 Fla. L. Weekly D1807 (Fla. 3rd DCA, August 13, 1999). In August 1999 Third District Court of Appeal found that there was substantial, competent evidence sufficient to support the DCA's Final Order approving Ordinance 004-1997. Three years after Monroe County's initial public hearings on the issue, the vocal opponents of vacation rentals had the final decision they had been seeking.

     The vacation rental case of Rathcamp is reminiscent of the landmark zoning case of Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926). Central to both Euclid and the instant case, is the concept that uses of property may be separated into compatible areas. As the ALJ noted in Rathcamp, a vacation rental "is more like the rental of a hotel or motel rental, rather than the long-term lease of property." Failing to separate such commercial uses or allowing them to proliferate unregulated, can result in many impacts, some of them expected and some unintended. What issues and valid concerns were raised in this hearing and sustained by the first District Court of Appeals? 

     The ALJ noted the following types of problems "not uncommonly associated with short term rental property¼they stay up later at night, late night parties are not limited to weekends, excessive number of vehicles, boats, jet skis, RV's (with noisy self-containing generators), and boat trailers, which they park in driveways, yards or on residential streets, multiple boats docked on seawalls." The ALJ also found the vacation renter to be "unfamiliar with garbage and recycling schedules, trash and garbage are left outside several days before pickup, unfamiliar pets are left to roam free, [and] occupants are less likely to adhere to neighborhood practices, less concerned about trespassing on seawalls and yards, [and] less familiar with nearshore waters." Noting that these traits are not limited to vacation renters, but are also caused by some permanent residents, the ALJ distinguished "the degree to which the problems are caused [as] much higher¼" for vacation renters. Partly because they have "less reason to be concerned, ¼they will be leaving the community in a short time." Further, the ALJ noted that not all owners use local managers and as absentee owners, "are not available to handle complaints as they arise." Although many of these issues are addressed by state and local ordinances, the local police and code enforcement process are poorly equipped to handle the problems created by vacation rental tenants night after night, week after week by an ever-changing stream of tenants.

     For the Keys tourist, recreational activity is the rule, on a daily basis, rain or shine. Continuous fun is a temporary vocation. But for the residents, the keys are home a place where people have to get up and go to work in the morning. The ALJ placed emphasis on the community character issue holding that "the crucial issue is essentially a local one and consequently, some deference should be afforded the County to make this difficult choice." This is primarily because the "ordinance does no harm to the environment and waters of the Florida Keys ACSC, and, in fact, has some small beneficial consequence to the environment." 

     Although seen as minimal when compared to the community character issues, these small benefits resulting from the Ordinance accrued to the Keys sensitive environment. Tourists utilizing vacation rental homes are generally unfamiliar with the shallow patch reefs, the ecological importance of seagrass beds and many of the federal and state-listed endangered and threatened species within Monroe County, such as Key Deer. For example, feeding Key Deer is a popular, but illegal, tourist activity as it encourages the diminutive deer to interact and rely on humans for food. Each week, a new group of tourists must be re-educated to the sensitive nature of the islands, not just garbage days and school-night parties.

     Education is made more difficult when tourists are dispersed throughout neighborhoods and no longer concentrated at traditional hotels and marinas. Navigation routes are frequently unmarked, and markedly different at the end of each residential canal within each IS district. And there are no marina personnel to guide them. What appears to be a boater's paradise from the seven-mile bridge, nearshore waters are filled with coral heads and seagrass flats. These obstacles can be obscured from view under less than optimal conditions when tourists are more likely to "venture out" than permanent residents more familiar with the waters, and who can more readily wait for sunny days when the water is easier to "read." 

     Outdated septic tank systems would require review with a change in use review to prevent adverse water quality impacts. Septic tanks for most single family homes in the Keys were approved many years ago when the home was first constructed. Single-family homes, hotels, and cottages all have a different minimum required capacity. In addition, a current maximum density loading is four (4) septic tanks per acre. The EPA Septic Tank Manual, states that a "dry" area of at least 4 feet should exist between the septic system mat and the watertable. The watertable in most of the islands areas in the Keys is insufficient to obtain a 4 foot differential. Many lots, platted and developed long ago, do not meet the current standards. 

     Restrictions on new housing, created by the dwelling unit allocation ordinance (commonly referred to as ROGO or the Rate of Growth Ordinance) have exacerbated the demand for long-term rental housing for permanent residents. The return of nearly 4100 vacation rental homes to the long-term rental market may in turn "free up less expensive housing¼that will generally trickle-down through the entire housing market" and provide more affordable housing for all sectors of the population as required by Section 380.0552(7)(j), Fla. Stat.. 

     The ALJ noted that when determining consistency with the principles under Section 380, "it may be determined that some of the principles have little or no application," and the principles must be construed as a whole. The Ordinance had little or no bearing on the other principles of Section 380.0552.

     Although not specifically addressed in the administrative hearing, and not raised on appeal, it is also unlikely that the Ordinance would result in an unconstitutional taking either on its face or as applied. The ordinance does not completely prohibit vacation rentals within Monroe County. Vacation rentals are still allowed in many zoning districts, including the newly-created IS-T. There is still a consumer market for vacation rentals in self-regulating condominiums and gated communities, which are exempt under the Ordinance. 

     Other municipalities within Monroe County, such as Key West, the newly incorporated Village of Islamorada, and Key Colony Beach have yet to expressly regulate vacation rental uses. The ALJ did consider these areas as mitigating against the dire predictions of a modern day bankruptcy in Margaritaville reminiscent of Key West's economic past. A rational basis for separating commercial uses from residential dates all the way back to Euclid. But how would the courts treat such a hybrid?

     The regulation neither prevents other uses of property nor results in an unconstitutional taking as applied to individual landowners in most conceivable instances. Homes in IS districts that can no longer be used as vacation rentals can still be rented to long-term residents. Weekly rates and rental agent commissions are higher for short-term vacation rentals. But the petitioner's own testimony was that on average it is more profitable to the landowner to rent long-term than short-term, due to the full-time occupancy rate. An owner may also apply for rezoning of property IS-T, and if they no longer wish to occupy a second home themselves. Or an owner could still rent (or even sell) their house for a reasonable return to someone for use as a purely residential, single family home. A ripe takings claim under this ordinance would be hard to make, ...and may be even harder to find than the last mango in paradise, but not as hard to find as a vacation rental even under the new ordinance. [Stay tuned for the enforcement story].