Short-term rentals of fewer than 30 consecutive days, for those who have advertised on sites such as Airbnb, have been illegal in single-family zoned residential districts in Oneida County, but is no longer under a late amendment to the state budget bill Gov. Scott Walker did not veto.
10/14/2017 7:30:00 AM Short-term rentals now legal throughout Wisconsin Jennrich: Oneida County will be impacted
Homeowners who have been prevented by their municipalities from renting their homes on a short-term basis can now do so under certain conditions, under a late amendment to the state budget bill that Gov. Scott Walker did not veto.
The new law will cause some Oneida County homeowners in single-family residential zoning districts to rejoice - and others to cringe. Short-term rentals of fewer than 30 consecutive days have been illegal in single-family zoned residential districts in the county.
No longer. The new budget provision generally permits homeowners across the state to rent out their homes for seven consecutive days or longer, and the budget bill declared any conflicting existing ordinances to be invalid and unenforceable.
Oneida County planning and development director Karl Jennrich said this week the legislation will have an impact on Oneida County because a majority of towns have zoned their lakefront properties single family, and that prohibits rentals for less than 30 consecutive days.
"The argument and reasoning is that (a short-term rental) is a transient use of the property," Jennrich said.
Jennrich said the county's zoning committee would take up the topic at an upcoming meeting. He also said the county has in the past taken numerous enforcement actions against those who have advertised on VRBO, Airbnb, Craigslist, and others, usually beginning with a letter advising the renters to stop, followed by citations or a long-form complaint if they don't.
Homeowners who have been eager to rent out their homes for long weekends using such platforms as Airbnb might want to hold their applause, however. Even under the new law, local governments are still free to regulate the rentals, and some say the language allows municipalities to target such online entities as Airbnb.
Specifically, the language would allow a local government to prohibit rentals of fewer than seven consecutive days. Weekend and rentals of less than a week are popular for Airbnb users.
Municipalities can enact other regulations under the budget provision. For instance, a city, village, town, or county can limit the total number of days per year a dwelling can be rented, though that number can be no fewer than 180 days, if it is rented for periods of more than six but fewer than 29 consecutive days.
That is, a municipality could cap the maximum number of rental days at, say, 180 or 200, but it could not set it at 179 or lower.
A municipality may also require that the maximum number of allowable rental days per year run consecutively. However, the local government could not specify what period of time the residential dwelling may be rented.
So if a municipality sets the maximum number of rental days at 180 days, it could require those days to run consecutively, but it could not direct the homeowner to schedule those days in the winter or any other particular season or seasons.
The new language requires any person who maintains, manages, or operates a short-term rental for more than 10 nights a year to obtain a license as a tourist rooming house. The Department of Agriculture, Trade, and Consumer Protection will issue the license.
A municipality can also enact an ordinance establishing its own license, and the operator would have to obtain that license in addition to the state license. Municipalities can enact other regulations not inconsistent with the budget provision, such as establishing nuisance regulations, requiring inspections, and the paying of any established room taxes.
Property-rights advocates were divided over the language of the legislation.
On the one hand, the Wisconsin Realtors Association supported the provision. WRA lobbyist Tom Larson told the Milwaukee Journal Sentinel it was a huge victory for homeowners who want to rent out their homes.
The WRA has supported similar legislation before. In late 2015, Larson said the legislation was needed to protect the second-home real estate market.
"Wisconsin has a strong second-home real estate market where many people have purchased second homes as an investment with the intention of renting them out on a seasonal basis to generate income or to help pay for ownership costs," Larson wrote then on the WRA website. "Banning the rental of homes by ordinance undermines the investment-backed expectations of these homeowners and prevents them from using the property for the primary purpose for which they purchased it."
What's more, Larson continued, without the ability to rent, prospective homebuyers might be less likely to purchase homes in those areas, and that could negatively impact the prices and marketability of those homes.
Larson has also cited a growing market for travelers who wish to rent homes for one or two weeks a year, rather than buying a second home for themselves.
A November 2015 WRA membership survey also showed broad support for such legislation within the WRA rank and file. According to the survey, 77 percent said they did not think local governments should be allowed to require minimum lengths of stay, with 23 percent in favor.
Seventy-five percent said they were interested in legislation that would allow homeowners to rent for one week or longer, subject to local regulations such as noise, parking, registration and licensing fees, and 28 percent said they were very interested.
What about Airbnb?
But other property-rights activists weren't so enthralled as the WRA, saying the legislation was a huge victory only for those homeowners who wanted to rent their home for a week or more, not for those who wanted to rent for shorter periods of time such as a weekend, which local governments can still prohibit.
The targets, they said, were such platforms as Airbnb, whose users stay an average of three nights.
In addition, the budget provision requires so-called lodging marketplaces such as Airbnb to collect room and other taxes and to forward those taxes to the municipality. Those marketplaces will have to register with the Department of Revenue.
The Travel Technology Association, a trade association for online travel companies and short-term rental platforms whose board includes representatives of Airbnb, TripAdvisor, and Expedia, called the rental provisions harmful and said they should not have been included in the budget bill in any event.
Matt Kiessling, vice president of short-term rental policy for the association, said the failure of Walker to veto the language hurts Wisconsin's standing as a pro-tourism and pro-private property rights state.
"Sneaking legislative language into a budget bill without a full and transparent debate does not make for good public policy, and violates previous promises by the Legislature to pass a 'clean' budget," Kiessling said. "The people of Wisconsin deserve better from their elected officials. This language is clearly a case of policymakers doing the bidding of the hospitality industry, who fears the growth in popularity of short-term rentals and was unwilling to let the free market and consumers have their say."
In a letter to legislative leaders, Kiessling said the budget provision not only worked against such rental platforms as AirBnb but targeted them.
"It is important for public policy to reflect the changing travel dynamics brought on by the popularity of short-term rentals, allowing both travelers and residents the ability to benefit from the options and flexibility that short-term rentals provide," he wrote. "As presently constructed, the provisions in the executive budget pertaining to short-term rentals do neither. At best the legislation provides an opportunity for every municipality in Wisconsin to ban or prohibit short-term rentals of less than seven nights in their community, and at worst, it proactively encourages municipalities to take such action."
Kiessling also said the new tax on short-term rental platforms was the first instance of tax liability ascribed to a third party platform doing business in Wisconsin.
"At present, the owners and hosts of short-term rentals in Wisconsin are responsible for collecting and remitting the proper taxes, not the platforms they utilize to help facilitate these rentals," he wrote. "After all, those offering their properties are the ones with a physical presence in the state, and as property owners already enjoy a relationship with both the Department of Revenue and their local political jurisdiction."
Finally, Kiessling wrote, the budget bill was not an appropriate vehicle for the rental provisions.
"We recognize the inherent challenges of constructing a fair and reasonable statewide short-term rental policy," he wrote. "But it is important to consider how truly complicated an issue this is and how detrimental the unintended consequences of this proposed language could be to Wisconsin property owners and hosts. With that in mind, we urge you to take up short-term rental regulation as a stand-alone bill in the general legislative session. Wisconsin residents deserve a full, fair, and transparent debate on what is clearly a public policy, and not a budget issue."
After Walker failed to veto the provision, Kiessling said other governors, such as Doug Ducey in Arizona, had embraced public policies that support and protect private property rights as well as those that support a sharing economy and entrepreneurship, while Walker's willingness to let the language be shoehorned into the state budget jeopardized both travelers' and residents' ability to benefit from the options, income, and flexibility that short-term rentals provide.
Richard Moore is the author of The New Bossism of the American Left and can be reached at www.rmmoore1.com.
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