By David A. Melito
State and local governments should consider and implement innovative solutions to housing issues where appropriate, including [m]odern housing concepts such as… accessory dwelling units.
A local law, ordinance, or regulation may not prohibit vacation rentals or regulate the duration or frequency of rental of vacation rentals.
I. INTRODUCTION
Consider two neighbors, both of whom own modest, modern two-bedroom bungalows on oceanfront lots in a small, coastal Florida municipality. Both neighbors recently constructed detached backyard pool houses that now contain a small kitchen and living room, a bathroom, and a bedroom. The first neighbor’s parents recently sold a small business they owned in town and retired. With no income stream and limited savings, they moved into their daughter’s pool house.
Coinciding with their retirement, the parents ceased driving and now rely on their daughter for transportation. Because our first neighbor’s parents are over the age of 62, Florida law allows her to obtain a 20 percent reduction on her lot’s assessed value for ad valorem tax purposes. The addition of the pool house and its new occupants has no impact on surrounding neighbors, allows the daughter to collect a modest rent to offset her mortgage payments, and allows her parents to age with dignity knowing that family assistance is only a yard away.
The second neighbor owns additional property out of state and typically resides in Florida only between the months of September and February. While away, the second neighbor lets their pool house as a vacation rental. The renters, often staying only for a few days at a time, are generally, and especially during traditional spring break weeks, college-aged visitors that have a tendency to crowd the neighborhood with additional vehicles, play loud music late into the night, and generate substantial amounts of trash that sometimes does and sometimes does not make it into the property’s trash cans. Numerous noise complaints and municipal ordinance violations have resulted in fines against the property, but the owner’s homestead classification prevents the city from foreclosing on the outstanding liens. Despite the obnoxious activities of neighbor number two, their unsupervised guests provide a fiscal boon to the city: not only do the rowdy visitors pay local sales taxes during their vacation, their short-term rental transactions also result in the remittance of tourist development taxes (TDTs). Current statutory strictures inadvertently render neighbor number one an aberration. However, recent experience teaches that our second neighbor is far from a rarity.
Further, the letter of the current law appears to inhibit either neighbor from renting their pool house to any individual who’s annual income is 120 percent or higher than the area’s median adjusted gross annual income, or more alarmingly, from allowing any individual to stay in the pool house rent free. The goal of increasing affordable housing is obviously laudable, but Florida’s scheme that allows local governments to adopt ordinances governing the construction and use of small, secondary dwellings on single family residential lots, dwellings defined in law as “accessory dwelling units” (ADUs), arbitrarily limits their availability and runs the risk of creating party pads in areas distinctly and historically unsuited for their placement. Moreover, even if a local government determines that the TDT revenue received as a result of the short-term rental of ADUs within its jurisdiction is outweighed by the annoyance of such conduct, they are without authority to prohibit that use, even if they simply wished to outlaw such rental only where the owner fails to follow their legal obligation to obtain licensure from the state. That is, under current law, a local government can proscribe the construction of accessory dwelling units throughout its jurisdiction, but if it allows their use, it must also permit their usage as short-term rentals in every single family residential zoned property within their borders.
The tension encountered by Florida local governments described above is not novel. The state of Florida, billed as a paradise within which a respite from cold northeastern winters may be found for nearly a century, thrives on its tourism industry. But while postcard-worthy beaches awe the state’s visitors, many of its residents, especially for those falling into the lower end of the income spectrum, suffer from a chronic and severe shortage of affordable rental units. The use of smaller, affordable units, such as ADUs, as short-term rentals (STRs) is likely exacerbating this problem. For example, research has found that “a 1 [percent] increase in Airbnb listings leads to a 0.018% increase in rents and a 0.026 [percent] increase in house prices.” In recent years, the Florida Legislature has passed bills that would have transfigured both Florida’s ADU law and its scheme regulating the state’s short-term rental market; the former fell victim to a late-session disagreement over STR preemption, the latter to the governor’s veto pen. This article discusses the current state of play, explores the implication of those failed attempts at reform, and charts a path forward for successful revision in the future.
II. SHORT SUPPLY AND SILVER TSUNAMIS
With the passage of the Live Local Act in 2023, the state of Florida placed a renewed emphasis on increasing the supply of affordable housing. Housing supply deficiencies have long dogged the state, but in recent years the problem has been exacerbated by steeply rising rents and home prices. Florida has worked for years to find solutions, but these measures have proven inadequate to meet the states growing affordability needs. The size of Florida’s current cost burdened population demonstrates that the need for adequate affordable housing stock is critically important. A household is considered cost burdened if it spends more than 30 percent of income on housing costs. Approximately 40 percent of Florida renters are cost burdened. Of Florida’s 2.4 million low-income households, over 1.3 million are cost burdened, and more than 920,000 very low-income households pay more than 50 percent of their income for housing. Further, Florida has the fourth highest homeless population of any state in the nation with more than 25,000 people living in homeless shelters or on the streets. The Florida Legislature has found that the “shortage of affordable rentals constitutes a threat to the health, safety, and welfare of the residents of the state.” At the same time, Florida also boasts the second highest number of elderly residents in the country. A comprehensive overview of the housing supply in the country owned by the baby boomer generation found that, over the next two decades, a “silver tsunami” will result in twenty million homes being vacated as this generation moves into alternative living situations or passes away. Three of the top five percentages of homes per city that people 60 or older are expected to sell in the next two decades are located in Florida. This trend will likely cause a cost reduction across the supply of single-family homes. However, the State, and its cost burdened and low-income citizens, cannot afford to wait twenty to thirty years for a solution to the problems they face today. Relatedly, as the state’s seniors age out of their current homes, they will need somewhere to go.
In concert with the passing of the Baby Boomer generation there is also a significant shift in the manner of homes younger Floridians are seeking. It is well documented that changing urban demographics and household composition has rendered much of the current urban and suburban housing stock unappealing to young urban professionals and younger generations in general. Current trends have rendered single family residences obsolete for many as they do not need or desire the size of the homes the Baby Boomer generation will soon be vacating. The number of households with one person has more than doubled since 1960, and married households have fallen from a peak of nearly 80 percent in the 1940’s to a low of just under 50 percent in 2019. Couple this with the fact that approximately 73 percent of the residential stock in the state consists of single family homes, and the mismatch in supply and demand becomes apparent.
One answer to this affordability and supply quandary is the reforming of local government land development codes, and one policy that addresses both affordable supply problems and the future transition of the elderly from single family homes to alternative living arrangements is the use of accessory dwelling units. An ADU, also called an accessory apartment, secondary suite, or granny flat, is defined by statute as an “ancillary or secondary living unit, that has a separate kitchen, bathroom, and sleeping area, existing either within the same structure, or on the same lot, as [a] primary dwelling unit.” As noted above, Florida has aligned its state housing policy in a way that encourages the development of ADUs, but the chosen scheme provides little actual incentive.
III. FLORIDA’S ACCESSORY DWELLING UNIT POLICY
While many ADU laws are enacted at the local level, California, New Hampshire, Rhode Island, and Vermont, have enacted state statutes allowing ADUs by right in all local governments within their borders. Washington and Oregon mandate ADUs by right for local governments with populations over a specified size. This year, via legislation discussed below, Florida nearly became the seventh state to create a statewide mandatory ADU scheme.
A. Permission and Constriction: The Current ADU Statute
In 2004, Florida enacted section 163.31771 of the Florida Statutes in an attempt to remedy housing affordability issues by encouraging increased development of accessory dwelling units.
In enacting the law, the Florida Legislature found that the state’s shortage of affordable housing “constituted a threat to the health, safety, and welfare of the residents of the state,” and that “encouraging the permitting of accessory dwelling units in single-family residential areas to increase the availability of affordable rentals […] serves an important public purpose.” The thrust of the statute is simple: “A local government may adopt an ordinance to allow accessory dwelling units in any area zoned for single-family residential use.” Originally, the statute permitted local governments to pass ADU ordinances only upon finding that “there is a shortage of affordable rentals within its jurisdiction,” but this language was removed in 2020, possibly in recognition that ADUs can serve more than just cost-constrained individuals. But remnants of the Legislature’s singular focus persist. The law specifies that “an application for a building permit to construct an accessory dwelling unit must include an affidavit from the applicant which attests that the unit will be rented at an affordable rate to an extremely-low income, very-low-income, low-income, or moderate-income person or persons.” ADUs built as a result of ordinances adopted pursuant to the law “apply toward satisfying the affordable housing component of the housing element in the local government’s comprehensive plan…” And finally, as a result of 2002 Amendment to the Florida Constitution, those providing an ADU for use as living quarters by the owner’s parents or grandparents who are over the age of 62 may obtain a reduction in assessment value for ad valorem tax purposes if that owner has registered the property as their homestead.
Shortly after passage of the law, the Florida Department of Community Affairs released a report on the state of its implementation. The department concluded that the rental guidelines included in the statute as well as its permissive nature greatly diminished the policy’s intended effect. At the time of the publication of the report, three years after passage of the law, only 55 ADUs had been approved across the state. However, as of 2025, 46 of Florida’s 67 Counties have ordinances specifically allowing ADUs and only Dixie County explicitly prohibits ADUs. Furthermore, many of Florida’s largest cities, including Jacksonville, Lakeland, Largo, Miami, Orlando, Sarasota, St. Petersburg, Tallahassee, and Tampa, allow ADUs by right subject to certain size limitations. The state reaffirmed its commitment to encouraging the development of ADUs in 2023, and this year, an attempt to make Florida’s ADU law mandatory nearly made it to the governor’s desk.
B. Fits, Starts, and the Future
Since its inception, section 163.31771 of the Florida Statutes has been amended four times: A 2006 amendment added the definition of extremely low income individual to the statute; a 2010 amendment repealed language requiring the Department of Community Affairs to conduct the 2007 study; a 2011 amendment corrected cross-references; and a 2020 amendment repealed the provision requiring the finding of a shortage of affordable housing prior to a local government passing an ADU ordinance. This 2020 amendment reflects a growing recognition that ADUs can serve more than just cost-constrained individuals, e.g., the elderly. In 2008, Senate Bill 474 would have added language first, making clear that ADUs are not to be treated as new units for purposes of transportation concurrency or impact fees, and second prohibiting the building of ADUs on “land within a coastal high hazard area, an area of critical state concern, or on lands identified as environmentally sensitive in the local comprehensive plan.” However, the bill died awaiting a hearing on the Senate floor.
Last year, the Legislature attempted a major overhaul of the ADU regulatory scheme with Senate Bill 184 and House Bill 247. These bills underwent substantial changes as the 2025 legislative session progressed, but both bills would have strengthened section 163.31771 of the Florida Statutes, by requiring all local governments to pass a statute permitting ADUs by right in areas zoned for single family residential use.
Initial drafts of each bill made clear that the ordinances were to be passed “without any corresponding increase in parking requirements,” and would not apply to planned unit developments (PUDs) or master planned communities (MPCs). As it passed through the Housing, Agriculture & Tourism Subcommittee (15 Y, 2 N), House Bill 247 was amended to expand the definition of accessory dwelling unit to include certain “manufactured homes constructed on or after January 1, 2025…” Next, in the Intergovernmental Affairs Subcommittee (16 Y, 1 N), a strike-all amendment greatly expanded the bill to allow local government regulation of the “permitting, construction, and use” of an ADU. But the strike-all also (1) prohibited the renting or leasing of an accessory dwelling unit for less than 30 days; (2) proscribed local government ordinances from requiring an ADU owner to reside in the property’s primary dwelling unit; (3) barred the inclusion of requirements for additional parking in ADU ordinances; and (4) required the instillation of replacement parking if a garage, carport, or covered parking structure is converted to create an ADU. The amendment additionally removed the manufactured housing language, removed the attestation requirement for rental to extremely-low-income (ELI), very-low-income (VLI), low-income (LI), and moderate-income (MI) persons, and clarified the applicability of homestead exemptions for properties upon which an ADU is constructed. In its final stop, a Proposed Committee Substitute (PCS) was introduced and passed by the Commerce Committee (18 Y, 6 N) that retained the prior changes, made clear a local government may not adopt an ordinance to allow accessory dwelling units within any area of critical state concern, and most importantly, removed the prohibition on renting an ADU for less than 30 days. Committee Substitute for Committee Substitute for Committee Substitute for House Bill 247 was laid on the table and never received a floor vote.
Senate Bill 184 also underwent substantial changes throughout the course of session. As initially introduced, the bill was identical to the introduced House Bill: viz it required all local governments to pass ADU ordinances that did not require additional parking mandates and exempted PUDs and MPCs. The first committee substitute, passed by the Community Affairs Committee (7 Y, 0 N), added language prohibiting ordinances from requiring property owners to live in the primary residence and provided a clarification on the applicability of homestead assessment reductions to primary residences. After amendment by the Appropriations Committee on Transportation, Tourism & Economic Development (15 Y, 0 N), the House’s manufactured homes language was tacked on, the ELI, VLI, LI, and MI affidavit requirement was removed, and, notably, the Committee Substitute specified that ADUs could not be rented for a period of less than one month. Finally, after its stop in the Rules Committee (25 Y, 0 N), the bill’s final committee of reference, a strike-all amendment conformed the bill to the language of Committee Substitute for Committee Substitute for Committee Substitute for House Bill 247 in all aspects except for the retention of the 30 day rental limitation.
Committee Substitute for Committee Substitute for Committee Substitute for Senate Bill 184 passed the Senate unanimously (37 Y, 0 N) and was sent to the House. The House passed the bill (97 Y, 10 N) with an amendment that functionally adopted the language contained in Committee Substitute for Committee Substitute for Committee Substitute for House Bill 247. Specifically, the amendment sponsor noted that this resulted in the removal of the short-term rental prohibition and removed the preemption on county and municipal parking requirements for ADUs. After the Senate refused to concur in the amendment, the House insisted. Ignoring this insistence, the Senate indefinitely postponed and withdrew the bill. Thus ended the Florida Legislature’s attempt at ADU reform during the 2025 Regular Session.
In the end, the primary sticking point that prevented agreement between the chambers was the inclusion, vel non, of (1) parking requirement preemptions and (2) restrictions on short-term rental durations for ADUs. Throughout the various committee and floor debates, discussion also recognized the policy as an affirmation of Floridian’s property rights: upon introduction of Senate Bill 184 in its first committee stop, the sponsor opened his explanation by stating that “although styled as affordable housing, it’s also a property rights bill.” Likewise, when discussing the PCS before the House Commerce Committee, the PCS that removed the restriction on rentals of less than 30 days, the sponsor of House Bill 247 made clear that the intention of the bill was to “empower homeowners.” During the progression of both bills, the prohibition on short-term rentals was removed, in the Senate bill it was removed temporarily and in the House bill permanently. Upon removal, both sponsors insisted that removal was necessary because the diverse impact of ADUs and short-term rentals upon the state’s communities was best managed by local government officials: they should be the ones who decide where and how ADUs should be used. Neither sponsor, nor any other member of the Florida Legislature, discussed the fact that Florida law already preempts this very decision and denies local governments the ability to prohibit short-term rentals in any residentially zoned neighborhoods within their borders.
C. A Statutory Right to Party Houses?
In 2011, the Florida Legislature created paragraph (b) of subsection (7) of section 509.032 of the Florida Statutes, providing that: “A local law, ordinance, or regulation may not restrict the use of vacation rentals, prohibit vacation rentals, or regulate vacation rentals based solely on their classification, use, or occupancy.” Three years later, that paragraph was amended to provide: “A local law, ordinance, or regulation may not prohibit vacation rentals or regulate the duration or frequency of rental of vacation rentals. Both before and after amendment, the statute provided that the preemption did not “apply to any local law, ordinance, or regulation adopted on or before June 1, 2011.”
As originally introduced, the 2014 bill simply repealed the preemption language passed in 2011. However, in its journey through the House and Senate, amongst significant allusions to the rights of property owners, the final language took the form quoted above. Senate Bill 356, heralded by Senator John Thrasher as a “return to home rule” in response to a “proliferation of residential homes being used as vacation rentals,” was amended in its second committee of reference to give local governments the ability to prohibit vacation rentals for less than seven days. However, after passage in the Senate (37 Y, 2 N), the House amended the Senate bill to prohibit any regulation based on duration or frequency. The amended bill passed on the House Floor (90 Y, 27 N), and the Senate concurred (32 Y, 2 N) sending the bill to the governor’s desk where it was signed into law on June 13, 2014.
However, this glitch bill did not solve the problems faced by local governments around the state. As short-term rentals spread throughout residential neighborhoods, nuisance behavior spurred regular complaints by local governments and their residents. Bills have been introduced attempting to repeal this preemption nearly every year since its creation. The House Sponsor summed up this long simmering debate while discussing Senate Bill 356 on the House Floor, aptly describing the intent as striking the “balance of regulatory control with the balance of private property rights.” As seen above in the discussion of the Legislature’s attempts to regulate ADUs last year, this tension persists. Any effort to greatly increase the availability of ADUs across the state must necessarily grapple with the fact that widespread use of those units as vacation rentals may lead to substantial disruption of neighborhood character. This tension also bubbled up once more during the debate over legislation introduced in 2024 seeking to place additional guardrails around the state’s regulation of STRs of all shapes and sizes.
Regardless of whether future legislation does or does not limit the duration of rental of ADUs, additional regulation is needed. Consider now an individual who owns multiple homes throughout multiple cities in the state. Some of these homes have ADUs and some do not, but all of the properties are let out as short-term rentals. Looking to save a few dollars, the owner decides not to register any of their rental homes with the state and does not remit the appropriate taxes to the Florida Department of Revenue (DOR). Because most short-term rental hosting platforms do not advertise the precise address of listed properties, and because the hosting platforms themselves are not required to obtain any license or registration from the state or local governments, municipal and county officials have no ability to easily determine what properties are being used as short-term rental properties, and therefore, no ability to easily determine who is failing to register and remit TDTs. Consequently, they may be losing out on potential revenue, a recent report estimated that the “total loss of registration fees from unlicensed vacation rentals ranges from $1.8 million to $6.9 million.” But more importantly, the guests may be at risk due to a lack of inspection of the units. Evidence suggests that failures to register are rampant. As of July 1, 2023 the Division of Hotels and Restaurants within the Florida Department of Professional Regulation (DBPR), licensed 27,496 single dwelling vacation rentals. The division measures single dwelling vacation rental within seven reglatory districts. The number of single dwelling vacation rental units within each district in 2023 was as follows: (1) Miami – 2,078; (2) Margate – 5,133; (3) Tampa – 4,516; (4) Orlando – 7,162; Jacksonville – 1,967; Panama City – 2,548; and (7) Fort Myers – 4,092. Compare this with a 2021 estimate that Airbnb alone advertised 345,053 listings in the state, and data provided by AirDNA showing 18,765 active listings in Miami, 6,745 active listings in Tampa, 46,734 active listings in Orlando, and 9,855 active listings in Jacksonville in September of 2025. This results in widespread failure of TDT remittence to DOR and significant potential for harms associated with unsafe conditions within uninspected units.