Alex Izaguirre/FUSION

Peg Corbett is Key West's sharing economy sheriff. Every day, she scours listings on Airbnb, VRBO and HomeAway, not in search of a beautiful home to rent, but in search of people breaking the law.

Advertisement

Corbett is the city of Key West's "Transient Rental Specialist." Her entire job is to hunt down vacation rentals that are in violation of city law. When she finds one, she figures out the address, then drives to the location to make sure it matches the picture on the listing. If it does, she issues a citation. First time violators get a warning. Repeat offenders face thousands of dollars in fines.

Key West is an island city, just four miles long and one mile wide, that makes up the southernmost point of the Florida Keys archipelago. Though teeny, it is a booming vacation destination. Between docking cruise ships and those journeying along the Keys' famed Seven Mile Bridge, thousands of tourists regularly inhabit the island alongside its 25,000 permanent residents.

Advertisement

Tourism is Key West's economic lifeblood, but regulating the industry means maintaining a precarious balance. Too many tourists, and the city becomes inhospitable for those that call it home, not to mention less fun for those who come seeking its low-key charm. So the city carefully regulates how many tourists are welcome there at any given time, controlling how many hotels are built, how many cruise ships are allowed to dock, and now, thanks to the popularity of home rental sites, how many people are allowed to rent out their homes.

"We're a great destination," Key West Mayor Craig Cates recently told me. "But it's causing a housing problem and it's hurting our local neighborhoods."

A report last year by the Florida Key's Monroe County Tourist Development Council found that throughout the Keys, the boom in illegal vacation rentals was putting "upward pressure" on an already scarce housing stock, failing to pay tourism taxes and circumventing zoning restrictions that "prevent tourism sprawl."

Sponsored

Even before Airbnb and VRBO made a prime vacation house in the Keys just a few clicks away, the number of vacation rentals in Key West was a problem. In 2002, the city passed an ordinance requiring a special license for rentals shorter than 28 days. The ordinance limited the neighborhoods where vacation rentals are legal to ones already dense with tourists, and capped the number of licenses at 1,041. But as business through websites like Airbnb began to boom, the city found it had a hard time controlling the number of illegal rentals. So it hired Corbett to dedicate her days to enforcing the law.

Peg Corbett (left), with a colleague from Key West's code enforcement department.

Since Corbett was hired in February, she has hunted down hundreds of potentially illegal rentals. The August morning I spoke with her, a new illegal unit had just popped up on Airbnb—a renter re-renting his room.

Advertisement

"We're so small, I can generally pinpoint an address based on the information in the ad in a few hours," Corbett told me.

If not, a colleague helps her track down the owner on Facebook. Then she heads to the house.  Repeat offenders face up to $5,000 in fines and must appear before a special magistrate hired by the city to hear illegal rental cases. Since Corbett started, she has issued citations to more than 100 illegal rental units and 20 repeat violators have gone before the magistrate. So far, 25 illegal renters have been fined a total of $73,000.

Not all offenders are scared straight. After repeatedly getting caught, Donal Morris kept re-listing his four-bedroom home on Airbnb, HomeAway and FlipKey. A stunning two-story home with a pool and lush garden just one block from the water, it's an Airbnb renter's dream. Morris, an Irish transplant to Key West, frequently rented out as many as three of his bedrooms, charging between $169 and $244 a room.

The house in Key West where the city conducted a short-term rental sting operation.
City of Key West

In 2014, the city had cited him, but dismissed the case after he took the listing down. In 2015, when an ad for the property appeared again, the city fined Morris $5,000 and made him sign an agreement swearing not to rent the place again. But lo and behold, earlier this year an ad for property appeared online again. So the city decided to conduct a sting operation in hopes of convincing him to take his home off the short-term rental market for good.

Advertisement

In April, Corbett and a few other colleagues operating undercover rented a room in Morris' house at $498 for two nights. They checked in and took photos of themselves in the rooms. Unfortunately, Corbett said, they did not get the chance to go for a dip in the pool.

Morris wound up paying the city a total of $9,248.00 in fines—a steep enough number, he told me, that he wouldn't dare rent the house out again, despite that fact that he was making good money and kept it booked about half of the time.

Advertisement

"It's just not worth it," he said.

Morris now rents out one of the rooms in his house long-term to a family member, which Corbett counts as a success. He is just one of many violators, she said, that converted their vacation rentals into long-term rentals for locals after getting busted. In a town with about 6,000 rental units total, a few dozen homes that offer leases rather than nightly rates coming back on the market can be significant.

Advertisement

"We’ve been real successful in the last six months," Corbett said. When Corbett started in February, there were 281 listings on Airbnb, the most popular of Key West's vacation rental sites. Of the 155 Key West units on Airbnb the day that Corbett and I spoke, all but one were legal. This fall, the city plans to hire a second full-time employee to go hunting with Corbett.

Key West's main complaint now is that Airbnb won't do anything to help Corbett in her work. In 2014, Key West sued Airbnb over illegal listings in the city. Even simply advertising illegal listings violates city laws. In a settlement agreement, Airbnb agreed to add a link to Key West's regulations on the site's Responsible Hosting page. To find that page, though, you have to go looking for it. There is nothing that alerts hosts to a city's local regulations when they begin to make a new listing on the site.

As part of the agreement, Airbnb also acknowledged that the company understands listings without a license that are renting their places for fewer than 28 days are illegal—but it didn't agree to do anything about it.

Advertisement

"Basically, they agreed that they understood our laws," Jim Young, Key West's code compliance director, told me. "But they didn't change.”

The city told me that it's had two conversations with Airbnb asking the company to cross reference listings on the site with the public list of addresses in Key West that hold short term rental licenses, to either remove those listings or report them to the city.  Airbnb's response, the city told me, has been that policing legality of listings is not the site's responsibility.

Advertisement

"To date, we have worked with municipalities around the globe to create fair home sharing rules, including working with many to share data about our community, something we are willing to do in Key West, as well," Airbnb spokesman Christopher Nulty told me. "However, we have a responsibility to protect our users' data and their privacy and do not share personal information without valid legal process."

"Our list of transient rentals is public record. We keep it up to date," Jim Schull, the city manager, said. "All Airbnb has to do is compare that property to the list of transient rental properties to know if it can legally be rented. It would certainly be an easy thing for them to do if they want their clients to not break the law."

Advertisement

Schull said that the city also asked Airbnb whether it could assist in collecting the high impact tourism tax that short term rentals in Key West must pay. But the company agreed to do so only if it kept which listings the money came from a secret, making it impossible for the city to know which properties had paid their taxes and which had not.

In the settlement agreement, Key West notes that it has placed Airbnb "on notice." But without a major challenge to Section 230 of the Communications Decency Act, which holds that internet publishing platforms are not responsible for illegal activity on their sites, there is likely little Key West can do to hold the company accountable.

Airbnb is balancing protecting its users' privacy with helping cities enforce their laws. But Airbnb does say it wants to help cities, trumpeting the economic benefits that it brings to them and its partnerships with them to increase tourism. Recently it published a report detailing the success of such partnerships, bragging that it's collected over $110 million in hotel and tourist taxes for San Francisco, Tel Aviv, Copenhagen and more. But if the company doesn't cooperate with attractive tourist destinations like Key West, teeny Reykjavik, Iceland and even teenier Joshua Tree, California in capping rentals, its success threatens to max out the capacity of local tourism infrastructure. Even in major cities like New York, San Francisco and Berlin, regulators have been pushing back against the ways in which Airbnb endangers local housing markets and ways of life with stricter laws. 

Advertisement

An Airbnb spokesman recently told me that the company is "committed to helping cities solve their housing challenges." Earlier this year, it even said that online platforms like Airbnb should "take a more active role" in addressing regulatory concerns. But the fact remains that when cities like Key West have directly appealed to Airbnb for help managing the downside of Airbnb's upside, those appeals have been ignored.

Key West is uniquely situated to take on the problem. Thanks to a huge budget from the hundreds of thousands of tourists that stream through it each year, it can afford to dedicate two full-time employees to smoking out illegal vacation rentals. And Key West is small enough that two full-time employees can effectively do it. 

Advertisement

But eventually, Corbett hopes Airbnb puts her out of a job by taking over the task of making sure rentals on the site are licensed.

In the meantime, she said, "there are sting operations in the works as we speak."