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Short-term rentals make waves in lakes area



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April 08, 2014 | 03:24 PM
TOWN OF GENEVA — Should homeowners in residentially zoned properties rent out their homes for periods shorter than 30 days?

The practice is illegal, according to zoning laws of the county, yet some towns are considering writing ordinances specifically to prevent it, citing the lack of enforcement on the part of inspectors and law enforcement.

People who own licensed resorts, bed and breakfasts, and other permitted short-term rental facilities resent the fact that those who rent out their homes don’t pay licensing fees, room taxes or have inspectors keeping an eye on them.

Those who rent out their properties see it as a way to generate income from a second home. Renters are ecstatic to have an entire house and its amenities, not to mention lake access, for a price which, when split by a number of people, is less expensive than many of the larger resorts.

However, neighbors to these short-term rentals find their riparian peace disturbed by those who are on vacation, free and fun-loving, and at times unaware or uncaring about how their actions affect the neighbors. Those who rent their homes on a short-term basis — seven days or even a two-day minimum stay, are advertising the availability of those homes on numerous websites, which promote home-stay vacations. Even though the county prohibits such advertising, since the rentals are in violation of county zoning laws, the practice continues. At their March meeting, the town of Geneva Board discussed short-term rentals and the possible draft of an ordinance or other means to curtail the activity. One of the items under discussion was that the county already had an ordinance controlling this. But that’s not true.

County enforcement

Michael Cotter, director of the Walworth County Land Use and Resource Management Department, explained why there is no specific ordinance banning the practice.

“We do not have a stand-alone ordinance about short-term rentals. Just like we don’t have a stand-alone ordinance saying you cannot run a bar or restaurant in a residential home. You have to be properly zoned to run a business,” Cotter said. “The ordinances allow citizens to rent or lease their homes, zoned residential, for longer than 30 days. Short term rentals, 30 days or less, require either bed and breakfast zoning or hotel/motel zoning.”

Enforcing zoning violations, either by sending a ‘cease and desist’ letter or through adding staff on weekends to spend time investigating reports or checking out the homes advertised online has been considered. Either option is cost prohibitive.

In August 2010, Mary Ellen Bruesch, from the State Health Department, gave a presentation on how the state looks at lodging and short-term rentals. She had spent numerous hours finding places that are not licensed by the state and licensing them. Before the state looks at licensing, the rental unit needs to meet the uniform dwelling code — and many lack full conformance with the code, she said. “These rentals need to meet the commercial code as much as possible if it is a multi-unit building and the Hotel/Motel Tourist Rooming House Code for a single-family dwelling,” she said. “It is up to the local building inspector to make sure the homes meet the building code, and since it might mean altering hallways, most building inspectors are limiting their review to fire and safety issues. When a complaint is received about lodging without licenses, we send out a certified letter putting the person on notice.” After another discussion, in September 2010, the county board moved to take no action, since the short-term rentals were already covered under existing laws.

A memo was filed, pointing out that a dwelling in a residential zoning district is defined as “A structure or portion thereof that is used exclusively for human habitation, but does not include boarding or lodging houses, motels, hotels, tents or cabins.” Unless the property is zoned appropriately, the rental of a residential property for less than a one month/30-day stay is prohibited in a single family residence district.

Realtors respond

Royce K. DeBow, governmental affair director in southeastern Wisconsin for the Wisconsin Realtors Association, was at the meeting and spoke about the Association’s view on the subject. In a follow-up email and phone interview, he discussed the association’s thinking:

“In terms of the idea itself, there are many unintended consequences of banning vacation rentals as discussed in the town of Geneva. Property values can decrease when such limitations are placed on property use. Homes can be more difficult to sell, creating more vacant homes that might invite vandalism. With fewer residents due to the above factors, local small businesses have fewer customers which negatively impact the local economy. Combined, all these factors lead to more foreclosures.

“Tourism dollars decrease and some buyers who considered purchasing a second home, won’t do so if not allowed to rent the home to vacationers. Finally, the aggregate effect of banning rentals will make home purchases harder to finance. Lenders like the idea that a home can be rented by its owners, which increases the likelihood that mortgage payments will be made.

“While it makes sense that local units of government be allowed to regulate home rentals and place reasonable controls on such rentals, including registration, inspection, fees, or conditional use permits, it doesn’t make sense for outright bans on such activity, especially when tourism plays such a critical role in the health of the local and state economy.”

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