Before the summer of 2019, city of Miami’s Southwest 24th Road in the residential neighborhood of The Roads was mostly quiet. Neighbors helped each other out when one of them was away and teamed up to trim trees ahead of hurricanes. They would occasionally throw parties, and if they were going to be loud or run late, they’d let each other know.
All of that changed in the summer of 2019, said Mayco Villafana, who has lived on the street since 1997. The four-bedroom, four-bathroom house next door at 130 SW 24th Road had new people coming in and out nearly every day. Some threw loud parties; one involved a school bus filled with party guests, another featured a late-night mariachi band. Once a home for local long-term renters, it is now a full-time vacation house rented to tourists on Airbnb, in violation of the city’s code.
In July, a judge issued a Writ of Possession, granting Miami-Dade police the power to physically remove the tenant from the property. But the tenant in this case does not actually live at the house. The house is leased by Vacayo Inc., a California-based short-term rental management company that helps landlords benefit from “the booming cottage industry” of Airbnb, according to co-founder Isabel Berney’s LinkedIn page. The company manages more than 85 properties in six cities, the page says.
The house’s owner, Rafael Arranz, is eager to see the company gone. The city is also asking a judge to issue an injunction to prevent Vacayo from renting out the house, citing the code violation and eviction order. But Miami-Dade police aren’t executing the eviction because of a county COVID-19 emergency order.
The state’s eviction moratorium and the county’s emergency order are meant to prevent making tenants homeless during the pandemic. But for tenants who are actually short-term rental companies, the measures are providing a loophole to keep business booming.
Last week, Airbnb announced it was removing 40 party-house listings in Florida from the site that have received complaints. A spokesperson for the company said the house in The Roads was removed in January, but it was still available to rent on the site as recently as Sept. 11, though under a different host’s name with the same photo. Even before the COVID-19 eviction moratorium, local governments from Palmetto Bay to Miami Beach have struggled to get illegal Airbnb listings removed from the site.
“Airbnb has become the arbiter of neighborhoods, not local government,” said Villafana. “They decide how safe you will be, who your neighbors are, and whether your house will have any value. The average citizen doesn’t stand a chance against these well-oiled machines.”
Party next door
Though the city of Miami does not allow for commercial or lodging businesses to operate in homes in the T3 zoning area, code enforcement only enforces the rules if they discover a short-term rental exists while responding to another code violation like noise or garbage.
The city quickly discovered what was happening at 130 SW 24th Road after Villafana reported the parties.
In 2018, Arranz, the owner, listed the house for rent after his tenants of three years, a young family, decided to move out to buy a house of their own. Before that, Arranz had lived in the house with his family. They now live in Key Biscayne and the house in The Roads is an investment property.
According to Arranz, Isabel Berney with Vacayo Inc. approached him with an offer. She said the company would pay him for a year of rent at $6,100 per month, and bump the payments up to $7,300 after six months if the home was earning a 30% margin over rent as an exclusive short-term rental for executives staying in the area for business, Arranz said. Berney was the first one to put in an offer, and Arranz went with it; the house became a short-term rental.
What originally began as a website enabling homeowners to run a viable side gig has morphed into a high-return real estate investment industry. A 2019 Miami Herald analysis of Airbnb data available through third-party sites and interviews with Airbnb entrepreneurs found an increasing number of short-term rental companies like Vacayo are converting Miami rentals into full-time residential hotel rooms, leaving locals with fewer rental units. Vacayo’s website touts it can bring landlords “guaranteed higher rent” by taking their units off the long-term rental market and listing them on Airbnb.
The increase in rent payments never materialized, Arranz said; Berney failed to turn over accounting records. Berney and her lawyer did not respond to requests for comment.
“That was the first scam that I fell into,” Arranz said.
Arranz changed the lease agreement to month-to-month in June 2019 as repair costs for the pool, Jacuzzi and air conditioning started to add up. That’s when Villafana said the parties began.
The Airbnb listing said that parties at the house were not allowed, but they persisted. After a sleepless night of loud music and a 7:45 a.m. wake-up of more loud music on June 19, Villafana sent an email to City of Miami police, pleading with Commander Fabria Ellington.
“Unless the party-goers feel there are other consequences to their actions, a polite knock on a door and a ‘please keep the music down,’ is not working with this crowd,” he wrote. “We need creativity.”
In February, Arranz sued Vacayo, saying the company had stopped paying rent in December. In a letter to the judge, Berney said Arranz never fixed required repairs and asked a judge to determine how much rent Vacayo owed.
In June, the city of Miami code enforcement office posted a notice at the home that the owner is in violation of city code for using the house as a short-term rental in a T3 zoning area. Later that month, Arranz asked the judge for an injunction against Vacayo after the company reversed some of its former rent payments in PayPal.
On July 20, the judge granted the injunction and issued an eviction order to the Miami-Dade police.
But the eviction never happened. The department referred the Herald to Mayor Carlos Gimenez’s March 12 order, which says that all eviction activities are suspended until further notice. A spokesperson for the mayor’s office said they are looking into the issue along with the city attorney.
Despite the litigation and the eviction order, the parties haven’t slowed down. On Friday, cars filled the driveway and music blasted from the backyard area.
Arranz said he regrets ever renting to Vacayo, and feels for his neighbors who have to live next to a house that is either empty or full of transient tourists.
“I’m spending thousands of dollars to keep these guys out,” he said. “They know perfectly how to handle the system. They kept renting the house.”
The city of Miami has filed a separate lawsuit against Vacayo to enforce the code violation. The city attorney’s office told the judge that the company has not returned repeated phone calls and emails from the city. A hearing in that case is scheduled for Sept. 24.
“The state eviction moratorium is solely for those tenants who cannot pay rent due to COVID-19,” said city spokesperson John Heffernan. “The case in question falls outside of that, but the City does not have jurisdiction to take action — that falls to Miami-Dade County, and specifically MDPD, as sheriff.”
In response to a Herald request for comment, a spokesperson for Airbnb said on Sept. 10 that the listing for Arranz’s house had been taken down in January. But Villafana said the listing has repeatedly returned to the site since then. A spokesperson said Airbnb is investigating how the property at the same address could be listed repeatedly after being taken down.
“We have removed hosts associated with this property from our platform and we are evaluating whether we need to take legal action against any host associated with this property,” the spokesperson said.
In response to a 2018 CNBC investigation of unknowing homeowners who rented to Vacayo, Airbnb said it removed all listings associated with Vacayo from the site. Still, homes rented by Vacayo and dozens of other similar companies continue to thrive on the site.
After more than a year of complaining to the city, Villafana said he hopes the eviction will be allowed and the house will soon be turned back over to a long-term tenant.
“People used to say you can’t fight city hall,” he said. “People should now say you can’t fight Airbnb.”
Miami Herald reporter Joey Flechas contributed to this report.