Friday, September 30, 2005

The Three-Pronged Test

When he ran for Mayor in 2003, John Mertz proposed a three-pronged test that ought to be applied to any proposal that comes before the City Commission. It's a good way to analyze Commission proposals. I thought I might apply it to the forthcoming Transient Rental Resolution and its attached proposed agreement with the Truman Annex Master Property Owners Association.

First Question: Who Wants It and Why?

The obvious answer is that Kathy Rollinson wants it, and she has the force of a legal ruling to back up her right to have it.

There are others who want it too. They are all residents of Truman Annex, and there are (for now) eight of them, seven people people and one company. They are, in addition to Rollinson, John Behmke, John Bollinger, John Diament, Gary Clinton, Janet Clinton, Frederick Kerstein, and Ben Short. The company is Truman Annex Real Estate, which is controlled by John Behmke. Each of these is included in the proposed agreement and would be entitled to the same transient rental rights as were granted to Rollinson, though none of them have the same legal ruling that Rollinson does. Each claims to be "similarly situated" to Rollinson. They may have furnished evidence of this to the City, or they may not have done so.

There are nearly five hundred other property owners in TAMPOA who may also want the transient rental right. If the agreement is approved, they may claim it by paying the City a one time fee of $1,500 and getting the required permits from the City. It would be economically rational for each of them to apply, even if it is not their intent to rent transiently, as it would add considerable value to their property to have it, and could be passed on to a subsequent buyer without reservation for twenty years.

There may be others in other areas of the City who want it too, hoping that they too may engage in transient rentals with the TAMPOA agreement as a precedent.

Second Question: How will it benefit our Key West Community?

The only certain benefit to the City is that it would satisfy the judgement of the Courts that Rollinson has the right to continue to rent transiently and is entitled to compensation of some sort. A potential benefit is that the others named in the agreement would forgo their intent to bring suit. Beyond that, its difficult to see any benefits to the City, and easy to see there are pitfalls. Go back here and re-read the letter there.

Third Question: Who will it damage, and what are the ways we can lessen the damage?

Unbridled transient rentals will damage those residents of Truman Annex who bought their homes to live in and who don't want to live next to a hotel suite in what should be a residential community. It will also damage residents throughout the City if the TAMPOA agreement becomes a precedent for allowing transient rental in other areas.

It may also remove additional residential housing stock, putting further upward pressure on rents and putting the City that much closer to the "market failure" described by William Hettinger.

The way to lessen the damage is to grant the rental rights in a very limited way, and only to those who can prove beyond any doubt that they have acted identically to Rollinson. The rental rights should not run with the property but be limited to the current owner(s).

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