The Monona City Council on Monday voted to impose regulations on short-term rental properties, seeking to curb the expansion of services like Airbnb and VRBO in the city.
The council voted unanimously to impose the regulations at its Feb. 20 meeting. Alders cited concerns over safety and quality of life in the city, as well as the effect on home prices that the short-term rental market could have on Monona neighborhoods.
“Not only does it impact the sense of community, but it is driving up housing prices,” Alder Nancy Moore said. “And at a time when we’re all concerned about affordable housing.”
Under the new ordinance, anyone who rents out a property for more than 14 days per year would need to obtain a short-term rental permit from the city. Short-term rentals are defined as occupancy rentals for fewer than 30 days at a time. Renters also cannot rent to more than one group of visitors in any given seven-day period.
In addition, any property that is not the renter’s primary residence cannot be rented for periods of less than seven days at a time, and such properties cannot be rented for more than 180 days per year. Those rules are meant to disincentivize people or companies from buying homes in Monona for the sole purpose of short-term rentals.
Arguments for regulation
The idea to curb short-term rentals was first proposed by Mayor Mary O’Connor at the council’s Dec. 19 meeting, where she brought a draft ordinance and asked alders if they would support the effort.
Alders said that they were in favor, and generally cited three reasons: public safety, neighborhood character and increased strain on an already tight housing market.
Two members of the public spoke in favor of the regulations at that meeting, including Philip Haven, who was recently appointed to a vacant seat on the Monona Grove School Board. Haven lives next to a property that offers short-term rentals, he said, that is also near Winnequah Elementary School. He raised concerns about neighborhood safety and the sense of community.
“Twice a day, there are teams of children walking up and down our street. If you don’t live here, you don’t know that, and I’ve seen cars flying in and out of driveways,” Haven said. “It has the threat of eroding our sense of community that makes Monona unique. There’s not going to be more Monona.”
Bruce Sarow, another resident, told the council that short-term renters in his neighborhood are often loud and disruptive.
“We live across the street from a party every weekend, car doors slamming at all hours, people yelling when my kids are sleeping,” Sarow wrote in an email to the council before the meeting. “During the week it is a carousel of strangers in and out of our neighborhood.”
Sarow also argued that investors in short-term rental properties exacerbate housing concerns in the city.
“I feel like housing is too expensive and scarce in this city to have someone renting a home to travelers. Is that not what a hotel is for?” he wrote. “Sure my home price has gone up. But it also makes it harder for the family looking for their first home.”
Mayor O’Connor said that the council had discussed creating regulations on short-term rentals in the past, but decided at the time it was not a pressing concern.
“It’s getting to be a bigger issue now,” she said.
O’Connor said that it is difficult to know where or how many short-term rental properties are operating in Monona, in part because the city has no current registration system. Like hotels, short-term rentals are subject to the city’s room tax, but companies like Airbnb and VRBO usually pay the city that room tax on behalf of renters.
“The problem lies in that they don’t tell us what the address is that they’re paying for,” O’Connor said. “We will have to rely on these short-term rental places to register.”
A search on one such site, Airbnb, returned 31 different properties available to rent in Monona, as of Feb. 21.
Changes to ordinance
The new ordinance went through two rounds of edits by alders before final passage at the Feb. 20 meeting. It was drafted to align with Madison’s rules on short-term rentals, but the council made changes to tailor the rules to its own concerns.
Specific regulations were included to limit rapid turnover of guests at rental properties and to create barriers for those buying houses for the sole purpose of short-term renting.
Multiple alders had asked city staff if it was possible to entirely ban short-term rentals owned by corporate entities such as LLCs or trusts, but staff said such a rule would likely not stand up in court.
“You can preclude it, but if challenged, I’m not sure,” William Cole, the city attorney, said. “It’s pretty clear that corporations have the same rights with respect to this stuff as natural persons.”
Instead, the final ordinance includes rules that apply only if the property is not the renter’s primary residence. Such properties cannot be rented for more than 180 days in a given year, and they cannot be rented for periods of less than seven days. That means that shorter stays, like weekend visits, could only be accommodated by residents who live in the homes that they rent.
Alder Kathy Thomas had requested at its Feb. 6 meeting that the seven-day minimum for non-primary residences be raised to 29 days, but the council voted against that change.
Alder Theresa Radermacher introduced the provision that rental properties can rent to only one person or group in a given week.
“What’s most dangerous about these short-term rentals in terms of public safety is the turnover, the frequency of turnover,” Radermacher said. “What I propose is, you can rent your property for as long as you want, but you can not turn it over more than once every (seven) days.”
At its Feb. 20 meeting, the council also raised the number of days that a property could be rented per year before requiring a city permit. Alders voted to change that number from six to 14. Madison’s regulations do not allow such a grace period.
“The people that I know who do this, they rent during football games or Bratfest or the Crossfit games,” Moore said. “If somebody is just doing this for a few nights a year to put a little extra cash in their pocket, do we really want to be speeding all our time to enforce and regulate it?”
Enforcement to be determined
How the city will go about enacting its new rules is still up for some debate. Alders said that enforcement will likely rely on community complaints, as the city is limited in its resources and available data.
The new ordinance requires that anyone operating a short-term rental for more than 14 days per year obtain a permit from the city, a process that includes an inspection of the property for code violations and a one-time fee that is yet to be set.
Renters must also submit quarterly reports to the city including the dates of rentals and the sites on which the property is advertised. Violations of the new rules can result in fines between $500 and $1,000.
Alder Moore expressed concerns that city staff would not be able to keep up with the inspections and enforcement required by the new ordinance.
“I just know that we’re challenged to stay on top of inspections for current ordinances. I’m not saying we shouldn’t do this, because we definitely need to do it, but I’m concerned that if it’s too complex then it’s going to be really very difficult to administer.”
O’Connor said that most efforts to verify compliance will likely begin with neighbors.
“A lot of our enforceability relies on people calling in if there’s problems,” she said.
O’Connor said Tuesday morning that enforcement would begin as soon as practicable for the city. Staff are working to develop the proper forms and permits.