On January 13, 2026, about a dozen vacation rental owners, property managers and industry professionals filled a Marathon City Council meeting to look at a single line on a draft resolution. The number on that line would have pushed a new one-bedroom vacation rental license to $2,100 a year, with a $2,000 renewal, scaling up to $3,000 for a ten-bedroom home. For most owners, that meant their annual fee was about to double.
Eight weeks later, the number that actually passed was nowhere close. The council approved a $100 increase for any rental with two bedrooms or fewer and $200 for anything larger, landing the new one-bedroom license at $1,200 with an $1,100 renewal. That gap between what the city proposed and what it settled for is not a footnote. It's the clearest evidence available right now of how vacation rental costs actually get set in the Middle Keys, and it changes how a buyer should model what owning one here really costs.
A 2011 Law Set the Terms of Every Fight Since
Marathon's council cannot vote to limit how many vacation rentals exist in the city, set a longer minimum stay, or restrict how often a unit turns over. A Florida law passed in 2011 preempts all of that unless a city's restriction predates the statute. What the law does allow is fees, as long as the city can tie them to actual costs of administering the program.
That's the whole reason a fee fight happened in January. With the blunter tools off the table, price is the only lever Marathon's council has left to pull when it wants to slow growth, recover costs, or respond to pressure from residents about how many homes on their street are turning over weekly. The city has pulled that lever six times in fifteen years. The most recent adjustment before this year was a modest $100 bump in 2022. The most contentious came in 2015, when a divided 3-2 council vote raised the renewal fee from $250 to $500.
What the City Said the Money Was For
The January proposal wasn't arbitrary. Deputy City Manager Brian Bradley's analysis bundled together code enforcement staff time, dedicated vacation rental agents, vehicles, software and office space, then added something less obvious: 10 percent of the city's parks and recreation budget, roughly $199,000, and 10 percent of its fire and EMS budget, roughly $878,000. The reasoning was that rental guests use those services too, so rental owners should help fund a share of them.
Owners in the room pushed back on that math specifically, not on the idea of paying more altogether. Several said they'd support bringing fees closer to the city's actual costs, but questioned building in park and fire budget shares on top of the ad valorem taxes rental properties already pay at higher rates than homesteaded residences. Vice Mayor Debbie Struyf noted a flat-dollar increase would land hardest on the smallest rentals, and Councilwoman Robyn Still asked for a multi-year phase-in instead of a single jump. The council tabled the vote rather than decide that night.
The Backlash Rewrote the Number
By the time the council returned to it in March, the number on the table had shrunk to a fraction of January's draft. Real estate broker Brian Schmitt told the council his office alone manages 171 rentals across 163 owners averaging 2.4 bedrooms each, a detail that put a concrete face on just how concentrated the ownership behind these fees actually is in a city this size. City staff also flagged a risk that goes beyond dollars: pushing the ordinance too far could jeopardize Marathon's own seven-night minimum stay rule, a protection the city has held onto since before the 2011 preemption, and one that keeps the city working with local code enforcement rather than depending entirely on the state to police short-term rentals.
The final vote reflected that caution. A $100-to-$200 increase, not a near-doubling, and a fee schedule that still scales with bedroom count rather than a flat number for every unit.
The Same Law, Three Different Answers
What makes this worth understanding if you're comparing Middle Keys markets is that Marathon's neighbors are working under the exact same 2011 preemption and have landed on completely different tools.
Key Colony Beach doesn't lean on fees the way Marathon does. Its lever is procedural. Before a property can be rented short-term there, the property manager has to complete the city's own Property Manager class and get a certificate of completion, and the license requires a designated local contact who lives within an hour's drive of the property. Licenses run October 1 through September 30 each year, and the seven-night minimum stay is written directly into the rental paperwork tenants sign on arrival. The friction there isn't a bigger invoice. It's a requirement that someone with local knowledge is accountable for the property, in person, on a short notice.
Islamorada took a third path. The village raised its base licensing fee from $1,000, a figure set back in 2007, to $1,325 in a 2023 vote, framed by Village Manager Greg Oravec as an inflation catch-up rather than a policy shift. That number was actually conservative next to what the village's own Achievable Housing Advisory Committee had recommended, which was a $2,500 base plus an extra $500 for units with more than two bedrooms.
"I would personally like to see that be more, but this is a good starting point."
That's Mayor Buddy Pinder's comment on the 2023 increase, and it points to something Islamorada does that neither Marathon nor Key Colony Beach relies on as heavily: zoning eligibility. Councilman David Webb pointed out that entire neighborhoods zoned R1, his own included, aren't supposed to allow rentals shorter than 28 days at all, even though he estimated 30 percent of homes in his community get rented that way anyway. Rather than raise fees further to discourage that, the village brought in Deckard Technologies' Rentalscape software to track violations against the zoning map directly.
Three cities, the same state law standing between them and an outright cap, and three different answers: Marathon prices it, Key Colony Beach makes it a matter of training and accountability, Islamorada polices it against a zoning map.
What This Means If You're Underwriting One
If you're comparing a canal-front rental in Marathon against one in Key Colony Beach, the license fee line in your cash flow model deserves more scrutiny than a one-time lookup. Marathon's fee schedule has moved six times in fifteen years, sometimes by $100, sometimes debated as high as a full doubling before public pressure brought it back down. That volatility is now part of the cost structure, not separate from it.
Before writing an offer, confirm which category your purchase actually falls into. Marathon's application form distinguishes between new licenses, renewals and transfers, and the fee tiers differ. The city's code compliance office maintains an address search tool specifically so a buyer can confirm whether a property currently holds a valid vacation rental license rather than relying on what a listing description claims. A rental history at a property doesn't automatically mean the license transfers cleanly to a new owner.
If you're weighing Key Colony Beach instead, budget time as much as money. The Property Manager class and the local-contact requirement mean an absentee owner needs a real plan for who is reachable within an hour of that property, not just a fee paid on time.
A Few Direct Questions
Does a Marathon vacation rental license transfer automatically when a home sells? No. The city's application distinguishes new, renewal and transfer license types, and each carries its own fee. Confirm current license status directly with Marathon's code compliance office before assuming a rental history carries over.
What's the minimum stay in Marathon and Key Colony Beach? Seven nights in both cities. Marathon staff have specifically flagged that rule as worth protecting when weighing other ordinance changes, since state law would otherwise leave enforcement to sparser state resources.
Could Marathon raise vacation rental fees again? Given six adjustments in fifteen years, another change is plausible. The scale of pushback in January and the modest final number in March suggest the council has limited appetite for a large jump again soon, but that appetite can shift with a different budget cycle.
If you're weighing a vacation rental purchase anywhere between Marathon and Key Colony Beach and want the licensing math laid out against the actual property before you write an offer, The Cascone Team can walk through it with you.
