Rental registration increase faces blowback
Proposed hike from one-time $35 fee to $600 annually to come back to a Council workshop
Trending
A proposal that would greatly increase rental registration fees to fund a new city tourism initiative has been meet with pushback from the real estate industry and at least one member of the Cape Coral City Council
"I don't mind going on record that I am totally against it as it is currently written," Councilmember Bill Steinke said at Wednesday's board meeting. "It doesn't mean we don't have some rental issues in the city, some compliance issues, properties being rented and not known are being rented. I am glad it is going to a conversation at a COW."
The elected board agreed to discuss the proposed pair of ordinances -- which would increase the city's one-time $35 fee to $600 per year, per unit, while also empowering city police to remove tenants whose landlords failed to pay the fee -- to a committee-of-the-whole, or workshop, meeting.
If there is substantial change to the ordinances from that discussion at the workshop next Wednesday, the ordinance or ordinances would go back to a first reading, and not a public hearing on June 4.
As proposed and based on an estimated 10,000 units citywide, the fee would raise $6 million per year which the city would use for a new tourism-driven effort, less the cost of enforcement, which the city estimated at about 20% of the fee, or about $120 per unit.
Realtors, and those who work with landlords, said the impact affected property owners and tenants would be huge.
"For the first time in my career I actually wrote a speech before I got here tonight. Now I am even more pissed off than I was on my way here," Royal Palm Realtors Association Director of Public Policy Kevin Besserer told Council during citizens input. "The last couple of years I have defended all of you and when the public has jarred you, insulted you, and said all of these things about you. Now, tonight, I kind of understand."
He said some of the council members emailed and texted his members that the two ordinances, 26-25 and 27-25, would be withdrawn from introduction.
"Here we are now - we are at intro, now at COW, then June 4. That is two readings. I know how this works," he said.
According to the ordinance, "it is the city's further intent to specifically establish a residential rental property registration as a mechanism to protect neighborhoods from becoming blighted through the lack of maintenance of residential rental properties."
The definition of residential rental property "shall mean a dwelling unit located in a residential structure containing four individual dwelling units or fewer that is leased or rented to another person or entity." The owner of the residential rental property located within the city has to register each property with the City Clerk's Department, which has a proposed $600 annual registration fee.
"I am here tonight, not only representing my 10,000 members, but all the homeowners here in Cape Coral constantly having private property rights violated by this Council," Besserer said. "Today under the cover of darkness is the double tax on homeownership, a change from a one-time $35 fee to a yearly $600 fee on an estimated 10,000 rental properties in the City of Cape Coral - a $6 million revenue grab. A $6 million legacy shopping spree."
He went on to say that he knows many council members will say these homeowners are operating a business, which he maintained is categorically false.
"They are providing a service that this Council has done very little to offer - affordable housing units," Besserer said. "How many of these units are short-term rentals? Most of these properties that will be affected by this ordinance are units being used as renting long-term by working class families - single moms and single dads who you just added $50 a month to their rent right before insurance renewals come up for these homeowners when they are already struggling to make ends meet."
In regard to the enforcement, the companion ordinance states that "in addition to the applicable code enforcement provisions and procedures, upon a finding of violation of this section, the city, through the police department and code compliance division, is authorized to remove all occupants from the residential rental property until such time that the residential rental property is registered with the city."
"These need to be scrapped altogether," Besserer said. "I am flabbergasted by this."
The ordinance pertaining to the Tourist Development Fund states the fees shall be used for promotion and advertising to attract visitors; funding for local convention centers, sports stadiums, and art venues; capital improvements to tourist-related facilities; special events and cultural activities that drive tourism; conduct tourism research and data analysis and regulatory compliance, enforcement, and oversight related to tourism.
City officials say the creation of such a fund would be of great benefit to the city, which is attracting major and unique development projects.
"As much as Bimini East is going to be a game changer for our South Cape and the golf course purchase for the city, and the reservoir was for irrigation gaps needs for the future, I have not seen an opportunity like this one before administration, or the Council," City Manager Mike Ilczyszyn said.
He said he has seen the rental registration as high as $2,500 around the state to the lowest of $35 in Cape Coral.
Whatever the number chosen, Ilczyszyn said it has the potential of making a huge impact on the city. He said for two decades there have been conversations around needing swimming pools, indoor recreation centers, stadiums and performing arts theaters.
"The ability to change that trajectory is before you all with this decision," he said. (I will) "work with my parks and rec director to show you a list of all the items that would be funded through this and the estimated cost for those types of facilities."
Ilczyszyn said taxpayers are not going to continue to vote on general obligation bonds which are guaranteed by property taxes, and the city does not have new revenue sources.
"The size of what we are talking about as far as tourism attractions - we are talking about a quarter billion to a half billion that is all around Florida, but not in Cape Coral," he said.
Steinke asked for staff to bring back information regarding what cities charge for registration fees and what they have done with that money.
"I would like to see evidence that those are the things that worked in other cities, as well and how they went through that process," he said.
Ilczyszyn said what is being done in Cape Coral is absolutely innovative and has not been done elsewhere in the state. He said other municipalities send that money into their general fund to support operations.
"I will look for that, but I don't think you will find any city throughout the state. I have not seen anybody do what Councilmember (Keith) Long (proposed) - take those tourist dollars and send them back into tourist attractions," Ilczyszyn said.