On December 5, 2018, in City of Miami v. Airbnb, Inc., Florida's Third District Court of Appeal vacated a temporary injunction that prevented the City of Miami from enforcing a zoning law banning short-term rentals in residentially-zoned areas. The zoning law was intended to prevent homeowners from listing their homes on home-sharing websites like Airbnb. (.)

Miami's zoning ordinance, Miami Code 21 (Miami 21), establishes zoning classes for different real property types. Residential property, which is defined as "land use functions predominantly of permanent housing," is designated as zone T3.

In August 2015, the City of Miami Planning & Zoning Department issued a memorandum interpreting Miami 21 as prohibiting all short-term rentals in T3 zones. In 2017, the City of Miami (the City) adopted a resolution affirming this interpretation. In effect, this interpretation prevented homeowners or other property owners from listing and renting their property as a short-term vacation rental through websites such as Airbnb.

Airbnb Inc. and a group of homeowners (together "Airbnb") then brought an action seeking a preliminary injunction to prevent enforcement of Miami 21. Airbnb alleged that:

The trial court granted Airbnb a temporary injunction, finding that Miami 21 does not prohibit short-term rentals, so the City's interpretation was preempted by § 509.032(7)(b) Fla. Stat. The injunction prevented the city from enforcing any ban on short-term rentals pending a final hearing on the issue.

On appeal, Florida's Third District Court of Appeal vacated the temporary injunction and remanded to the trial court, holding that:

The Court of Appeal found that, because Miami 21 requires property in T3 zones to be used predominantly for permanent housing, the City could validly prohibit a short-term rental where a property's use was changed from predominantly for permanent housing to something else (i.e. investment property used exclusively for short-term rentals). Since the injunction prohibited the enforcement of this valid short-term rental ban, it was overbroad. The court noted, however, that the trial court could enter a more narrowly tailored temporary injunction.

This decision is a blow to the short-term rental industry in Miami, one of the country's largest markets for Airbnb and other short-term rental websites, as the City of Miami may now enforce Miami 21's short-term rental ban. However, the court left open the possibility that short-term rentals have a place in T3 zones, so this issue may continue to be argued and the ruling is likely not settled law.

For more information on short-term rental websites and regulation, see Legal Update, To Host or Not To Host: The Shared Housing Question.