Palm Beach stands firm on short-term rentals ban in residential zones, now cracking down co-ownership housing

Palm Beach, Florida – Palm Beach officials have strongly maintained their position on prohibition of short-term rentals, timeshares, and co-ownership models like fractional properties inside residential zoning areas. Following Council President Bobbie Lindsay’s demand for further explanation on the town’s stance on holiday rentals and timeshares, Town Attorney Joanne O’Connor reiterated during a Town Council meeting on June 11 the rigorous zoning rules.

Strictly prohibiting businesses like Airbnb and Vrbo in its residential areas, the town cites noncompliance with current zoning regulations. O’Connor claims that Palm Beach’s definitions of residential use have long left out short-term and holiday rental arrangements. In the same vein, the town rules forbid timeshares and fractional-ownership buildings. According to O’Connor, the residential portions of the city are set aside for single-family use—that is, for groups of individuals sharing one housekeeping unit without regular turnover.

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The meeting also discussed issues of Pacaso, a co-ownership service founded in 2020 by Austin Allison and Spencer Rascoff that markets luxury houses. Noted by O’Connor as producing a “chopped use” scenario, this approach lets buyers own a piece of a property and limits their stays to a set number of days annually. Several residences in Palm Beach—now deleted following the town’s enforcement actions—were among the properties offered on Pacaso’s site, which features high-end facilities and innovative interior designs.

O’Connor also mentioned a letter Pacaso received confirming their business model is incompatible with the zoning rules of the town, especially illustrating that any kind of timesharing would only be feasible in one particular residential area on the South End and even there, requiring a special exception.

Furthermore, a recent legislative event saw Governor Ron DeSantis veto a bill on June 27 that would have let the state override local zoning rules regarding short-term rentals. SB 280, this legislation sought to centralize the control and licensing of holiday rentals, therefore affecting local government. O’Connor clarified, though, that Palm Beach’s rules would not change should this measure be vetoed; they remain strictly against any short-term rental businesses unless they are part of a condominium-hotel arrangement.

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John Choi, Pacaso’s senior director of public affairs, responded to the town’s position by saying Pacaso stays dedicated to working cooperatively with all communities around the nation to educate stakeholders on the advantages of their co-ownership model.

The choice made by Palm Beach highlights a larger discussion on the balance between homeowner rights and community stability in major holiday locations as towns struggle with the rising trend of short-term and shared housing investments altering established residential zones.