Local limits on short-term rentals could be blocked under pending bill

A national battle between the short-term rental app Airbnb and the tourism industry has made its way into Wisconsin.

The debate probably won’t be as high-profile as it was in San Francisco, where voters rejected a proposition last month to toughen the city’s rules over short-term rentals. And it likely won’t be as charged as it has been in New York, where Airbnb has released data to show the vast majority of its users rent out their homes as an “economic lifeline.”

But it would involve a move by Republicans at the state Capitol to block some municipal ordinances such as one in Madison, which limits some short-term rentals to up to 30 days each year. The city of Bayfield, said Mayor Larry MacDonald, passed limits on short-term rentals about 15 years ago after citizens said they were tired of “not knowing who was in the house next to them.”

“It’s another attempt to take away local control, and in our case, it’s taking away local control directly from the residents who asked for this ordinance,” MacDonald said.

The bill’s supporters, meanwhile, say local governments will still be able to regulate those properties and require inspections if they wish. But they can’t have an ordinance that prohibits or “unreasonably restricts” rental of residential properties for more than seven days.

Government also shouldn’t limit people’s right to rent out their homes or cabins, an activity that provides an economic boost to the state, supporters say.

“Here’s the fundamental question,” said the bill’s author, state Rep. Scott Allen, R-Waukesha. “Do we err on the side of local government and their rights or do we err on the rights of the individual property owner? If I’m getting that question, nine times out of 10, I’m coming down on the side of the property owner.”

The bill, AB 583, got public hearings this month in the Assembly and in the Senate.

Among the groups registering against the bill is the Wisconsin Hotel and Lodging Association, whose president and CEO noted the bill exempts short-term rentals from state regulations that hotels are subject to, including safety inspections.

“We don’t want anything bad to happen to travelers in Wisconsin that impacts our tourism industry reputation,” Trisha Pugal said.

Supporting the bill are the national Travel Technology Association, whose members include Airbnb and HomeAway, and the Wisconsin REALTORS Association.

Allen, a realtor, says the bill isn’t meant for Airbnb and similar companies, which actually want the bill to go further and apply to rentals of one day or more, instead of setting that at seven.

Rather, Allen said, the bill is largely meant to help Wisconsinites who might leave the state for a job or for a military assignment and have a “short-term need to rent their home.”

“We want to give them the ability to do so,” he said.

The Travel Technology Association, however, is trying to convince lawmakers to change the bill to boost more short-term rentals.

“We’d love to see the seven days moved to one, but a 30-day limit for a rental essentially is a ban on short-term rentals for all intents and purposes,” said Matt Kiessling, the association’s director of coalitions and grassroots. “What you’re losing out on is the ability to invite tourists into your area and the flexible housing stock that short-term rentals offer.”

Kiessling also emphasized the bill “encourages cities to create some sort of framework to deal with short-term rentals,” pointing to a national survey that showed half of Americans want some sort of regulatory framework in place.

Pugal, from the Wisconsin Hotel and Lodging Association, said the industry “welcomes the competition” but wants to make sure short-term rentals follow all the necessary rules, from required inspections to making sure all the proper taxes are paid.

“Once [a property] becomes rented out to the public on more than a rare occasion, it’s a commercial business, in which case, it should follow commercial law,” Pugal said.

— By Polo Rocha