Palm Beach officials: No short-term rentals or timeshares in residential zoning areas

Palm Beach officials have a stern warning for short-term and vacation rental, timeshares and fractional-ownership homes: Not here.

Town Attorney Joanne O'Connor outlined the rules for the Town Council recently, after Council President Bobbie Lindsay asked for clarification on where and how vacation rentals and timeshares may be allowed in Palm Beach.

When it comes to short-term and vacation rentals, such as those listed with services like Airbnb and Vrbo, they are not allowed in residential zoning districts, O'Connor told the council during the June 11 meeting. And fractional-ownership or timeshare properties are not consistent with the town's code at all, she said.

Such uses are not consistent with Palm Beach's longstanding rules and definitions for residential uses, O'Connor said.

Some of the concerns raised by council members and commenters during the meeting involved an up-and-coming co-ownership service named Pacaso, founded in 2020 by real estate and technology entrepreneur Austin Allison and former Zillow chief executive Spencer Rascoff.

Pacaso's online marketplace allows those seeking second homes to buy a percentage of a luxury property. At the time of the June 11 meeting, several Palm Beach homes for sale were included on Pacaso's marketplace, which "curates luxury listings with premium amenities and high-end contemporary interior design," according to the company's website.

The prices listed on Pacaso were based on anywhere from an eighth to a half-stake of ownership, O'Connor told the council. Owners have a maximum number of days they can visit the property, depending on what percentage of the property they own, which would create a constant turnover of people, Lindsay said.

"You're getting a lot of choppy use by these eight owners and their families," O'Connor said, noting that the maximum length of stay is 14 nights, and owners cannot have back-to-back stays.

In a letter to Pacaso, O'Connor affirmed that the company's use structure is not permitted in any residential districts in Palm Beach, and the timesharing use is not allowed in any residential district except one, on the South End, where the use would require a special exception.

While Florida's laws prevent local governments from discriminating against different forms of ownership, O'Connor said that wouldn't be the case here. Instead, the permitted use in Palm Beach's residential zoning districts is limited to a single family. The town defines a family as an individual or group of people who don't have to be related but who live together as a single "housekeeping unit," she said.

The town's zoning code also says that a family can't live in a home for "not less than three months" — which O'Connor also cited as the reason why short-term and vacation rentals are not compatible with Palm Beach's rules.

Vacation and short-term rentals are allowed as part of the town's condominium-hotel use, she said.

"I think there's a good argument that in the alternative, even if this were an allowed use in our residential zoning district, that at a minimum, it's a timeshare use," O'Connor said of Pacaso.

"If it walks like a duck and it talks like a duck, it's gonna be a duck," Council President Pro Tem Lew Crampton said of the differences between the co-ownership model and timeshare uses. O'Connor sent the letter to Pacaso soon after the June 11 meeting. As of July 1, homes in Palm Beach have been removed from the marketplace.

In a statement emailed to Palm Beach Daily News, John Choi, Pacaso's senior director of public affairs, confirmed that Pacaso does not own or operate any homes in Palm Beach. "Pacaso remains committed to working collaboratively with all municipalities across the country to educate stakeholders on the benefits of our co-ownership model," Choi said.

Short-term rental bill vetoed

A bill that would have given the state more control over short-term rentals while pre-empting local governments would not have affected Palm Beach, O'Connor told the council.

Gov. Ron DeSantis on June 27 vetoed the bill , SB 280 , which would have granted the state any power for licensing and regulating vacation rentals. Some municipalities, including Wellington, require short-term and vacation rentals to register as a business and obtain a permit or license to operate. Had DeSantis signed the bill, anything not addressed before 2016 would be pre-empted by the state, O'Connor said.

Palm Beach's rules would not have been affected, she said.

Kristina Webb is a reporter for Palm Beach Daily News, part of the USA TODAY Florida Network. You can reach her at kwebb@pbdailynews.com . Subscribe today to support our journalism.

This article originally appeared on Palm Beach Daily News: Palm Beach officials: No short-term rentals or timeshares in residential zoning areas