Home to Headache: Miami’s Battle with Illegal Short-Term Rentals

How lucrative “party houses” defy city ordinances and spark noise and frustration in once peaceful neighborhoods.

A house in your Coconut Grove neighborhood sells. And one weekend, before you even meet your new neighbors, the place is overrun with visitors — cars parked up and down the block, music blaring, and the street littered with empty bottles. 

A really great housewarming party? No, a weekend later it happens again. And a week after that, yet again. 

Your new neighbors, it turns out, live in New York — or is it London, or Dubai — and the house they now own on your once quiet street has become what City of Miami officials say is an increasingly common, and vexing, problem: a short-term rental event space, otherwise known as a “party house.” 

“It’s everywhere. It’s really adversely impacting all our neighborhoods,” Robert Santos-Alborná, director of the City of Miami’s Code Compliance, tells the Spotlight. 

Despite laws on the books in Miami and other nearby municipalities that forbid short-term housing rentals, some property owners pay them little regard. 

Indeed, a quick search on popular sites for a one-week stay in early January turns up dozens of short-term rental options within Coconut Grove including a “luxurious” four-bedroom home with a pool in the North Grove, listed for $1,557 per night, and a three-bedroom “retreat” in the South Grove for $713 per night, and a villa with heated pool that sleeps 12 for $2,738 a night.

And while the party house phenomenon — with ensuant noise, traffic and other complaints — represents only a fraction of all illegal short-term rentals, Santos-Alborná adds, some violators are finding the business model too lucrative to resist.

BY THE NUMBERS

In the 12-month period that ended September 30, Miami’s Code Compliance department cited 319 single-family-home property owners for violating the city’s short-term rental ordinance. (The data does not include apartments, condos and other multi-family dwellings). Only 28 of 319 cases have been resolved – “adjudicated” in city parlance – and of those 28, eight involved repeat offenders.

“Those are individuals that were cited, adjudicated before for the same violation and, lo and behold, they come back and do it again,” Santos-Alborná says. “So that is your absolute telltale sign that it’s prevalent, and it’s a problem.” 

WHO OWNS THE PROPERTIES?

The majority of single-family home rentals that become party houses are owned by a limited liability company (LLC), Santos-Alborná explains. They advertise the properties as short-term rentals on social media and vacation property sites — from the popular Airbnb and Vrbo to lesser known homestay sites, of which there are many. 

The City of Miami passed its ordinance banning most short-term rentals in 2015. Three years later Miami won its case against Airbnb when the Florida Third District Court of Appeal reversed a previous injunction that had prevented the city from enforcing its ban in residential areas.

But a law is one thing. Enforcing it is another.

To shut down violators — at least temporarily — code compliance inspectors must collect evidence, locate property owners (who often live off premises, if not out of town altogether), issue citations, follow-up with a summons to appear at a hearing, and then submit testimony before the Code Enforcement Board, which issues a ruling by vote.

In the meantime, many violators just keep on listing, and renting, their properties. 

The incentives are strong. During peak South Florida travel periods — like early December’s Miami Art Week — short-term rental rates can spike significantly, with high-end homes renting for well over $5,000 per night. 

Some sites package their rates with high-end amenities like airport transfers, city tours, and concierge services. Other sites, like the Jatina Group’s Miami Mansion Rentals offer yacht charters and private chefs along with their stays. 

Others list rentals by the hour.

That’s what happened with a 4,500-square-foot house in North Grove —“Villa Utopia” — that not long ago was advertised on a number of listing sites, including Instagram, Hotpads, and on peerspace.com, a rental platform for event spaces, where the house was described as the “ultimate oasis for productions and events” for as many as 75 people at a fee of  $250 per hour with a 10-hour minimum.

Although Peerspace says it never booked the location, the house became a hotspot for parties and, ultimately, neighborhood complaints.

Shortly after the five-bedroom house was purchased (by an LLC) for $2.1 million in 2021, the parties began. They became louder, larger and more frequent. And it got worse with “public sexual activities in front of a minor, drug use, and noise violations,” wrote one neighbor in an email thread shared with the Spotlight.

“I think that in the beginning it was [social media] influencers from around the country that were given this as a perk,” says Marlene Erven, president of the Coconut Grove Park Homeowners Association. “The party house moved into the neighborhood and it was quite disruptive.” 

For a time, its owners advertised the home on Instagram, Peerspace, Hotpads and, among others, Nomade Villa Collection, which listed the “utopia” house for $3,500 per day.

Neighbors began documenting their concerns and shared them with city inspectors, who in turn spent months collecting evidence.

In an April 2023 email exchange with city authorities, neighbors aired their frustration: “Our main concern is the bad element and nuisance that this party house has brought to our otherwise tranquil neighborhood, on a weekly basis.”

Late last year, after two years of illegal rentals and the accompanying noise, high-volume traffic and nuisances, the Code Enforcement Board found the owners in violation of the city’ short-term rental ordinance, ordered them to cease immediately, and levied a $5,000 fine for every day they did not comply. 

“It took a lot of diligence by neighbors to document. It was complicated and hard to address,” says Erven. “It’s a lot of weaving through rules and regulations. You have to prove it. You have to have videos. Even if you can prove it’s a short-term rental, it’s not easy shutting them down.”

Nomade Villa Collection did not respond to a request for an interview. A spokesperson for Peerspace, after reviewing a screenshot of the listing that mentions the house as an event space, acknowledged that the property had been listed on its site, but was never booked through it, and has since been taken down. 

“We take the comfort and safety of guests, hosts, and neighbors seriously,” Molly Burke, associate director for brand marketing at Peerspace, wrote in an email.

During a recent visit to the property, a construction crew was busy making repairs. And while the parties have stopped, there’s no telling for how long: “Villa Utopia” is still being listed for rent.

DUE PROCESS REQUIREMENTS

The City of Miami employs 56 inspectors (though a few positions are unfilled) who keep tabs on a range of code compliance violations such converting spaces into extra bedrooms to accommodate more guests and doing construction work without permits.

Proving cases is difficult, explains Santos-Alborná, given state laws that limit the kinds of evidence that can be presented to hearing boards. Among short-term rental code violations cases last year, his department received rulings on only 28 cases. And the backlog for all code compliance cases, not just short-term rentals, is staggering: over 1,000.

“The code process is a civil process,” Santos-Alborná said. “We don’t have the right of entry and we influence corrective action, corrective behavior, by way of fines. That’s the way we do it.”

Sometimes, inspectors also have to contend with house guests who have been coached to say they are friends or relatives of the owners, not renters, or present a “fake” lease that states the house is rented for six months or more but the property is actually sublet as a short-term rental.

“We don’t fall for that. We’re going to look at the history. We’re going to look at the nature of complaints. We’re going to look at everything in totality,” Santos-Alborná says, adding that a task force was recently created with code compliance inspectors who have become experts on short-term rentals.

But to be clear, Santos-Alborná adds, the deck is stacked against code compliance. “We have due process. I have to provide notice. I cannot trespass. I cannot enter a property. I cannot obtain support evidence that is illegally obtained… It is a laborious process and sometimes residents get frustrated. But we are doing our due diligence.”

Complicating matters, he notes, is a 2021 change in both state and local laws that prevent neighbors from filing code compliance complaints anonymously. People can call to complain about an unlawful rental but if they don’t provide their name a case is not opened.  

And even a successful case does not necessarily mean the property owner will comply with the ruling, Santos-Alborná says.

As an example, one property — which last sold in 2022 for $3.6 million — has racked up more than $2 million in fines since being ordered by the board to pay a $5,000 penalty for each day of noncompliance. The five-bedroom house still advertises as a short-term rental for more than $3,200 per night. 

“Some of these places that are very brazen, they continue, and they continue to accrue fines,” Santos-Alborná said.

The city can go after properties with liens and foreclosures, which adds another layer of complexity, but as Santos-Alborná explained: “We are not in the business of real estate so we don’t want this property. But we want them to comply.”

GETTING INVOLVED 

In recent years, longtime North Grove resident and activist Ron Nelson had to contend with two neighbors whose properties were being used for overnight weekend party gatherings. A third house on South Bayshore Drive was being used as a wedding venue for a while before the owners were cited and ordered to stop. 

Nelson managed to get the parties in his neighborhood to stop by going directly to the owners and pointing out that the gatherings were in violation of city ordinances.

“You gotta get involved and you gotta be aggressive,” Nelson says. “Sometimes it’s hard and it can be scary but that’s what you’ve got to do.” 

Neighbors can also help inspectors by sharing information and testifying at code violation hearings. Santos-Alborná says neighbor testimony was critical in the eight cases of repeat violators last year.

For its part, the Code Enforcement Board is issuing hefty fines whenever possible against properties owned by corporations that it believes are operating as commercial enterprises.

At a recent hearing, an LLC that owns a single-family home in the East Shenandoah neighborhood that was hosting raucous weekend gatherings was hit with a one-time $15,000 fine — the maximum that can be levied against a business — for violations that are considered “irreparable or irreversible in nature.” The board also issued a $5,000 fine for every day the owners do not comply with its ruling. 

At a recent hearing to address the Shenandoah property’s violations, board member, Yvonne Bayona advocated for a stiff penalty: “I think you need to hit these people hard. 

“They need to understand that we purchase our property and live in our residential neighborhoods with our families to maintain them peaceful and quiet and we don’t have to deal with this kind of nonsense. They’re going to continue doing it. And this is what we see…This is the only way we’re going to kill this beast because it’s all over the city.”

The property owners did not attend the hearing.

LUCRATIVE BUSINESS

So why do property owners risk being cited for short-term rentals of single-family homes when it is clearly prohibited? 

“Short-term renting is much more lucrative than long-term renting,” said Grove resident Marcelo Fernandes, a real estate broker and developer since 1988.

Miami is a tourist magnet and these homes are competing with hotel rooms. Owners can make significantly more money with temporary weekend tenants, particularly with high-end rentals in desirable neighborhoods such as the Grove, than with annual leases. At $2,000 per night a property can bring in $16,000 in just eight days of bookings per month. And corporate-owned properties also can serve as a tax write-off, Fernandes said. 

From a business perspective, it’s a gamble with an attractive jackpot. Plus, Fernandes adds, Grove real estate is an ever-rising market. Property owners will likely see a return on their investments even if their short-term rental business is shut down.

This puts the onus on neighbors to ferret out the violators, says Fernandes, a former president of the Coconut Grove Village Council. “If there are no complaints, if neighbors are not willing to protest, the renters win,” he says.

Editor’s note: This story has been updated to clarify that Villa Utopia, a North Grove party house, was advertised on a number of booking sites, including Instagram, Hotpads, and peerspace.com, but was never booked on Peerspace, according to a company spokeswoman.

TIPS FOR RESIDENTS TO REPORT PARTY HOUSES

• Contact City of Miami Code Compliance. The daytime number, beginning at 6 a.m. is (305) 416-2087, or you can report problems by simply dialing 311. Emails can be sent to: [email protected].
• After hours contact the Code Compliance Hotline at (786) 457-0995. The Hotline operates until 1 a.m. Sunday through Thursday and until 3 a.m. Friday and Saturday. If you leave a message inspectors will try to respond within an hour. 
• Once a case is established, get to know the inspector assigned to investigate. “Stay in contact with that inspector,” says Code Compliance director Robert Santos-Alborná. “Even if people don’t want to get involved beyond providing information, it can still have an impact.”