Residents in Anna Maria and Holmes Beach recently have expressed concerns related to the growth of vacation rentals in residential neighborhoods.
Some fear the Island, particularly Holmes Beach, is losing its identity and character to the construction and renovation of multi-unit and short-term rentals.
Island real estate agents acknowledge certain problems, but attribute the growth of duplex construction to a market driven by investors, and they note that this change has helped keep the Island’s economy afloat.
The issue has become so acute that Holmes Beach commissioners planned a work session Dec. 13 to discuss potential solutions.
In Anna Maria, where more than half of the single-family houses are estimated to be vacation rentals, similar concerns have surfaced. Members of the planning and zoning board recently asked the city commission to look into some of the same rental problems plaguing Holmes Beach.
Several Holmes Beach residents in the city’s R-2 zone, where duplexes are allowed, have complained about the construction of “mega-duplexes” with four or more bedrooms in each unit. Residents also say the duplexes generate loud parties after 10 p.m., numerous vehicles parked in the rights of way and trash cans left curbside for several days before a scheduled pickup.
Long-time city resident Mary Buonagura expressed concern to city commissioners at a recent meeting that rental duplexes are “changing the Island” from a balance of rental and residential properties to “a short-term vacation resort.”
The changing Island, however, is “market driven,” and builders and property owners are simply responding to the demands of buyers, according to local agents and developers.
Jesse Brisson of Gulf-Bay Real Estate in Holmes Beach said when real estate values on Anna Maria Island began to decline in early 2008, buyers sat on the sidelines waiting for the market to hit bottom.
When property values began to rise in 2010, Brisson said buyers were no longer families looking to move to Anna Maria Island, but investors and families planning to retire here in 5-10 years.
“The families wanted something they could use for a few weeks a year, then rent for the remainder,” he said of the people who have come to his agency. The investors, on the other hand, are looking for a return on investment, Brisson added.
Anna Maria real estate agent Jason Sato said homeowners from 2003 to 2006 were selling their houses at a profit and moving off the Island to less expensive accommodations. The new owners found that houses could be rented on a daily basis in Anna Maria, an attraction to vacationers.
In Holmes Beach, investors discovered multi-bedroom duplexes could be built in the R-2 zone in accordance with applicable laws, said developer Shawn Kaleta.
Although some city residents have complained about the look of the duplexes, Kaleta said every project was built according to code and was permitted by the city, and construction was fueled by market demand.
Such construction was “market-driven,” he said. “Buyers are investors looking for a return on their investment.”
Should Holmes Beach change its building code on duplexes or vacation rentals, Kaleta said he would be more than happy to comply.
“I own a few rentals and I don’t want six or seven cars parked there. If the city brings in parking restrictions or occupancy restrictions, I’ll abide by the rules,” he said.
Additionally, the growth of tourism is contributing to the construction and sale of vacation rental properties, Sato said.
“Tourism is booming. People are coming here and falling in love with the Island and decide they’d like a piece of paradise,” he said.
In the past 10 years, Anna Maria Island has been featured on national television travel programs, in numerous magazines, and in newspapers such as The New York Times, Washington Post, Los Angeles Times and USA Today.
“We’ve been discovered. We are known as a great vacation destination for peace and quiet, beautiful beaches and old Florida ambiance,” he said. Anna Maria Island is a tourist-driven economy, Sato noted.
The Bradenton Area Convention and Visitors Bureau spends millions of dollars each year to keep visitors coming.
And it’s working, as tourism has increased every year since 2008 and is up 6.5 percent for 2011 compared with last year at this time, according to the latest BACVB statistics.
The tourism influx helps the local economy and the public treasury, Brisson said. Manatee County collected more than $7 million in 2010-11 from the 5 percent resort tax charged for each accommodation rental of six months or less.
Additionally, the county’s 6.5 percent sales tax on all rentals brings in millions to the Florida Department of Revenue each year and eventually to the county.
The problem of vacation rentals might mean the Island is a victim of its own success.
More visitors equals more potential buyers, Sato said. Kaleta said the serious real estate investor is searching for a rental property that has a greater return on investment than a single-family home rental. That creates the demand for construction of multi-bedroom duplexes.
The problem appears to be blending rentals with residents in a workable situation, Kaleta said.
Brisson, Sato and Kaleta agreed there has to be a balance. Without the vacation rental sales and tourism increase, “a lot of people on the Island would have gone out of business” the past few years, Kaleta said.
Sales up, population down
The Island real estate market has changed since 2005.
While the population is declining, the number of vacation rentals appears to be increasing with tourism.
The 2010 U.S. Census Bureau reported the Island population declined by 1,122 from 2000 to 2010, a 21.2 percent drop.
For the same decade, the Manatee County Supervisor of Elections Office reported that Island voter registration fell by 17.9 percent, from 6,679 voters in 2000 to 5,486 in 2010. The Manatee County Property Appraiser’s Office reported applications from Island residents for the annual homestead exemption were down by 66 percent this year when compared with 2005.
“Clearly people were selling their homes at a profit and moving to less expensive houses on the mainland or elsewhere,” Kaleta said.
As population dropped, tourism was on the rise, resulting in a need and demand for more tourist accommodations, particularly short-term rentals, he observed.
Kaleta lives on the Island and understands that a few renters can spoil the vacation rental success. It’s the few people who think they can party all night and turn up the stereo volume who cause the problems.
“We try to rent to people who will behave, enjoy themselves and live by our rules,” he said.
Kaleta, Sato, Brisson and other agents inform renters of garbage pickup days, restrictions on noise in the city and to be a good neighbor Brisson said.
Unfortunately, there’s always somebody who doesn’t want to vacation by the rules.
“All we can do is continue to educate agents and renters,” Brisson said.
With the success of Island accommodation rentals, some companies are actively seeking the serious investor to buy a multi-bedroom duplex or house on the Island.
Companies such as 9Solutions LLC are marketing sales and rental management services to Island investors as one package, noting online the additional income potential from multi-bedroom structures.
Online advertising for 9Solutions says it purchased old duplexes on the Island and replaced them with “larger, 4-6 bed townhouses with a view to accommodating more and more visitors.”
The company claims a six-bedroom home can sleep 14 to 18 people, allowing “three or more families to vacation together at a much lower average cost.”
The problems of residents and vacation rentals can be overcome, Kaleta said. “We need to find common ground where everyone can live together,” he said.