Timeshare trend raises questions

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Timeshare trend raises questions
« on: March 08, 2004, 13:39:36 »
Timeshare trend raises questions

Soaring waterfront prices have inspired a new real estate trend in Southwest Florida.

The notion was enough to scare residents of at least one community, who likened it to a transient hotel being built in their backyard.

Called fractured, or shared ownership, the concept is similar to a timeshare, but it involves luxury single-family homes. Multiple owners — as many as four or five — pay as much as $500,000 each to use the house a couple of months a year.

Fractional ownership is becoming the upscale residence of choice in resort areas like Aspen, Colo., Mexico and Hawaii. It’s been widely successful for other luxury items like jets and yachts.

Realtor Denny Grimes said it’s a novel concept for single-family homes.

While Lee’s multimillion-dollar real estate market — homes $2 million or more — is up 250 percent, there’s still more than four years worth of inventory to sell, said Grimes, of VIP Realty in Fort Myers.

“Buyers are value-shopping,’’ he said.

Shared ownership fits that mind-set, Grimes said. “It makes a lot of sense. It’s a not the money people are concerned about; it’s rationalizing the cost of ownership.’’

Particularly, when the homes are used for a few weeks or months a year, he added.

But it’s being met with opposition on Sanibel Island.

At issue was the proposed sale of a $3.1 million home in the Kinzie Island neighborhood. Recently, the Brandywine Owners Club attempted to buy the home, with plans to turn around and sell it to four owners for upward of $900,000 each.

The company, whose corporate offices are in Ocean., N.J., called it the “sensible” way to own a luxurious second home without all the expense, according to its Web site.

Neighbors were outraged. There were threats of lawsuits. The homeowners association, which represents the 24 homeowners, voted overwhelmingly to change its rules.

“Obviously, we couldn’t stop the sale,’’ said Patrick Tzanis, association president.“But we could limit the use to a single family.’’

The association also limited the number of guests and how many times they could visit in a given year.

The sale fell through and now Sanibel city officials are reviewing their zoning to see what they can do to provide the same restrictions.

“There’s nothing that specifically precludes shared ownership in single-family zoning,’’ said Ken Cuyler, Sanibel city attorney. At least for now. “We’re looking at what discretion the city council has in passing regulations.’’

Throughout Southwest Florida, zoning laws restrict timeshares to areas where there are condos or resorts, not single-family homes. The question remains whether or not these qualify as timeshares.

“I understand the problem if 52 wanted to buy it,’’ Grimes said. But, “I don’t know how they could stop it.’’

The Sanibel planning staff hopes to have a recommendation on how to stop it to the council by the end of the month.

Sanibel may be the first to deal with the issue, but it’s not likely to be the last. Brandywine’s Web site reports it is looking for a home in Naples, as well as other resort locales.

Brandywine officials did not return repeated phone calls seeking comment.

“Since the average family only uses a second home for only 60-90 days every year, the Brandywine Owners Club allows second homeowners to enjoy 100 percent of the benefits of homeownership, with only 20 percent of the associated costs,’’ according to the Web site.

They are advertising a 6,800-square-foot Fort Lauderdale home with a 37-foot SeaRay Sundance. The price tag: $650,000 for a 20 percent share of the house.

According to the Web site, “you and yours can live life to the fullest and be fiscally responsible at the same time.’’

Some suggest the issue is more concentrated on income discrimination than zoning. Shared ownership opens up sales to the middle-class wealthy, not just the wealthy wealthy, said John McIlwain, housing expert with the Urban Land Institute, a Washington, D.C.-based nonprofit real estate research group.

“Underlying this is the fact that homeowners don’t want people who don’t have as much money as they do,’’ he said. “But we’ve been doing that in our suburbs for 50 years.’’

Sanibel is a wealthy barrier island enclave, where the median family income is $92,455 and the median home value is $392,400. By comparison, Lee County’s median family income is $42,430 and the median home value is $112,900.

Tzanis said his neighbors aren’t discriminating. They just want to protect their quality of life.

“The prices of real estate have gone so high,’’ he said. “Here’s a way to live the life and not pay full price.’’

“It really concerned us because there were four other homes for sale,’’ he said. “I bought this as single-family residence. I don’t want four different people living next to me.’’