There was a good article in the Herald Tribune, showing that less rental restrictions help both Real Estate Market and economy on Anna Maria Island:

There is no denying that Anna Maria Island is fulfilling its economic potential these days.

Its hotels and vacation rentals are full.Its stores and restaurants are generating increased revenues. Its developers and builders are busy upgrading its housing stock. And its employees, both on and off the island, are finding jobs.

Despite all these positives, some year-round residents on nearby islands are terrified by what Anna Maria has become.

They do not like the idea of sharing their beaches, restaurants and roads with hoards of care-free northerners and have managed to keep them off their islands for years by slowing development of tourism-related businesses and restricting access to vacation homes. But with recent court decisions and the election of a free-market governor and Legislature, anti-growth residents in beach communities throughout the state are facing the most serious threat to their protectionist ways in decades.

In Venice, a string of legal defeats has forced the city to suspend an ordinance prohibiting property owners from renting dwellings more than once a month. That means landlords can now provide tourists with what they want — short-term rentals and access to Venice’s nearly 12 miles of beaches.

Meanwhile, in Tallahassee, Senate Bill 833 and House Bill 476 are speeding through the Legislature and could have much the same result for property owners statewide.

“The Legislature seems to be saying with its new bills that all neighborhoods are the same and that someone who has a house in a single-family area can override local ordinances and rent that house overnight to 20 students on vacation,” said Catherine Luckner, president of the Siesta Key Association.

But the idea of letting anyone in a single-family neighborhood rent their property to tourists destroys the very very notion of a neighborhood, Luckner said.

“It’s fun to have people coming and going, and it works well in areas that are zoned for vacation rentals,” she said. “But there are other areas where people have made a permanent home and want to make sure they have a safe place to live.”

Bob Waechter, another resident of Siesta Key, feels the same way.

“Having vacation homes on the same street is horrible,” Waechter said. “If owners rented to responsible people, it would be one thing. But, unfortunately, units are often filled with groups of people whose expressed intent is to party for a week or two.”

As a free-market Republican, however, Waechter also sees the benefit of reopening Florida’s beaches to tourists.

“The reality of this economy is that we may need to lighten up a little and take our income from wherever we can get it,” he said.

The big middle

Because of Anna Maria’s openness to tourists, the island is doing much better economically than neighboring islands on a variety of fronts.

Tourism tax dollars generated by its three municipalities have risen every year since 2005, hitting $2.9 million during the 12 months ended Sept. 30, 2010 — an 88 percent jump from the same 12-month period in 2005-2006.

No other island community in the three-county region has performed even half as well.

Siesta Key came the closest, with a 40 percent increase in tourism-tax revenues during the five-year period. But its economy has been in the doldrums of late. Tax revenues fell 4 percent in 2009 and only rose 4.5 percent in 2010.

Anna Maria’s three cities, by comparison, saw tourism tax revenues rise 20 percent in 2009 and 28 percent the following year.

Demand for short-term rentals has fueled a new construction and real estate sales boom on Anna Maria, with both permitting and sales activity exceeding boomtime averages.

“Even during the worst economy in a lifetime, Anna Maria has been doing historic business,” said Ed Chiles, an Anna Maria restaurateur, developer and the son of a former Florida governor, the late Lawton Chiles.

“Last year was challenging because of the weather and the oil spill, but we still almost set a record. And this year has been nothing short of amazing.”

The reason other beach communities have not performed as well as Anna Maria is that landlords are generally not permitted to provide short-term rentals that modern tourists want. Both Sarasota and Manatee counties have ordinances in place that limit rentals to once every 30 days.

But certain landlords in both counties are allowed to provide shorter stays if they were providing that service before the ordinances went to effect.

“Americans are taking more frequent and shorter vacations,” said Virginia Haley, president of the Sarasota Convention & Visitors Bureau. “They are working longer and harder and it is difficult for them to plunk down for a month or more.”

Even on Anna Maria, there are areas that prohibit owners from renting on a short-term basis.

But neighbors tend to be more tolerant there than on other islands, said Larry Starr, who manages 1,000 vacation rentals from St. Petersburg to Punta Gorda through an affiliation with ResortQuest.

“The lines between areas that allow rentals and those that don’t are blurred so much on Anna Maria that they tend to be allowed everywhere,” Starr said. “Use is regulated by complaints. As long as no one complains, the units are rented out.”

After Anna Maria, the community with the most short-term rentals is Siesta Key. It has 2,570, according to figures provided by the Sarasota County Convention and Visitors Bureau.

But Siesta Key, according to Starr and other tourism boosters, has building codes and zoning laws that preclude landlords from upgrading and modernizing rental units.

As soon as their structures undergo significant change, owners immediately lose the right to cater to as many tourists. So they either carry on with their dated buildings or sell to developers who turn vacation hovels into seasonal homes for the uber-rich.

The result is that Siesta Key looks more and more as if it is engaged in a battle between rich and poor, while Anna Maria, with its renovated rentals, caters to the broad middle class.

“We need to do something on Siesta to encourage redevelopment of older places,” Haley said.

Restrictions and stagnation

Other beach communities along Southwest Florida’s coast have different problems.

Longboat Key has been unreceptive to tourists for so long that it has become difficult to rent properties in the middle of the island.

“If you talk to rental agents, it’s the hardest sell,” Haley said. “People want to be around St. Armands, where things are lively. The perception that Longboat is dead is a real issue and the closing of the Colony Beach & Tennis resort has fed into that.”

Over the past five years, tourism tax dollars generated by Longboat Key have risen only 12 percent.

What is more, they have been falling for the past two years — 11 percent during the 12 months ended Sept. 30, 2009 and 2 percent during the same period in 2010. And those numbers do not take into full account the Colony’s closing.

Without tourists, businesses move off the island, which makes it a less desirable place to live, said Starr, the vacation rental expert.

“Longboat has taken too long to realize this,” he said. “It has broken the cycle that makes people want to come back.”

Anna Maria has never broken the cycle, Starr said. People come down and stay in hotels or a beach house, and may come back for a few seasons before thinking about buying a place for retirement.

“You have to have tourism on your island,” Starr said. “You have to have a way for people to come and visit or the value of real estate will ultimately suffer.”

Venice is in a similar predicament. Its tourism tax revenues only increased at a quarter the pace of Anna Maria’s during the past five years and have been declining for two years. They fell 6 percent during the 12 months ended Sept. 30, 2009, and 3 percent more during the same period last year.

Steve Milo, an entrepreneur who tried to start a vacation rental business on the island in 2002, said Venice made a big mistake when it changed its laws to drive him out.

Not only did he win a three-year legal struggle and force the city to pay him a $300,000 settlement for selectively targeting his rental properties, but the region lost his money-making and tax-paying abilities.

“After they tried to put me out of business, I focused my energies on the Jacksonville-St. Augustine area,” Milo said. “I now have a company that manages 400 properties, generates well over $10 million in revenues, has 35 employees and provides an enormous amount of bed-tax revenues. I’ve also been credited with helping to sell condos and homes to people looking for second homes to rent.

“I could have done that in Venice,” Milo said. “Anyone who drives through the city can see it has tremendous potential.”

Oil and water

Milo and other tourism boosters realize the basic conflict between vacationers and year-round residents.

“Residents don’t get along with renters,” Starr said. “If you sit by the pool at a condo complex near the beach, you can see how they don’t get along. You can see it and you can feel it.”

But if residents do not grasp that the local economy is based on tourism and real estate, and that the two are inextricably linked, it will take a lot longer for the region to recover from the Great Recession.

“For the Southwest Region, tourism is critical to recovery,” Milo said. “Those towns that embrace it will start to recover immediately. But those that don’t won’t recover for decades.”