Airbnb rentals at issue in New Buffalo, Lake Geneva, and other Chicago-area vacation destinations

The conflict is exacerbated, Binzer says, by the fact that the gains are mostly in dollars, a tangible thing, while some of the losses “are difficult to quantify but are very real: the loss of the kind of community in which people like to live. live, where you know the people who are in the houses around you. These are not transients that will be replaced next weekend by someone else. Short-term rentals typically last less than a month, but typically from a few days to a week.

Granicus has worked with at least 300 municipalities that were having difficulty renting short-term, Binzer says, and in recent years the states around Chicago – Wisconsin, Michigan and Indiana – have been a growing part of the portfolio, because ” lots of places within driving distance of Chicago, ”he says, have signed up for help curbing short-term rentals.

From a handful several years ago, he’s grown to about 38 governments in those three states, Binzer says, though he declines to say which cities his clients are. The spread of short-term rentals has also sparked crackdowns in places like Massachusetts Cape Cod and Barcelona, ​​Spain, which this summer prohibits the rental of single rooms, short term.

Three years ago, when Lake Geneva authorities approved a fee of $ 2,000 for a short-term annual rental fee, a city administrator said the amount would cover the costs of administering the program, including including the necessary new hires. Operators said the fees were excessive.

The Milwaukee-based Wisconsin Institute for Law and Liberty, or WILL, sued the two fees, which WILL’s assistant lawyer Luke Berg says is 20 times what any other municipality has charged. The rules also included a provision for warrantless searches and a requirement that every short-term rental landlord install a safe that city staff can access at all times.

“They violated the Fourth Amendment,” which protects against unreasonable searches and seizures, says Berg. The rules were dropped and the fees reduced to $ 750.

That’s not low enough for WILL, who now represents a trio of short-term rental owners in a case disputing fees. “Most cities in the state charge $ 100 to $ 200 for a license,” Berg said. “Some charge more. We want Lake Geneva to provide evidence that can justify charging $ 750. “

The license fee is $ 25 in Egg Harbor, Wisconsin, 225 miles northwest of Lake Geneva. Next year it drops to $ 50. In this Door County village, the owner of a short-term rental is required to live within 75 miles of the property or have a registered manager within 25 miles.

“We are a small village. We don’t have a police force, ”says Megan Swayer, administrator of the village of Egg Harbor, population 252.“ We need to know that if there is a problem, someone can be there within an hour. about.

Like all towns in the Door County Tourist Zone, Egg Harbor charges a tourist tax of 5.5% on short-term rentals, the same as hotels and other accommodation. So, it can’t be said that short-term rental owners are siphoning money out of town without helping to back it up, an accusation that has repeatedly surfaced at New Buffalo meetings.

Putting short-term rental owners on a level playing field when it comes to taxation echoes a problem New Buffalo Mayor John Humphrey has with short-term rentals. In New Buffalo now, a few dozen licensed short-term rentals are in areas of the city zoned exclusively for residential use. It is essentially an illegal commercial use of a residential property, Humphrey told Crain’s in September. It is proposing zoning changes that would prohibit new permits in residential areas. In commercial areas, permits would reopen with the end of a moratorium on new permits which is due to expire in December.

Humphrey declined to comment for this article.

When Heather Gradowski was growing up in northwest Indiana in the 1970s and 1980s, her family often spent time in New Buffalo and other towns on the Crescent along the southeastern edge of Lake Michigan, which s ‘Harbor Country is now called.

New Buffalo, says Gradowski, “has always been this beautiful little town that has turned into a tourist town in the summer.”

One big difference now is that short-term rentals are seemingly all over the city of 1,800 permanent residents 70 miles from downtown Chicago, and in the pandemic era, when people can work remotely and have need getaways, it’s not just summer when the population swells.

Within 3 square miles of New Buffalo are 148 short-term rentals, City Manager Darwin Watson said at a city meeting in October. He said it’s equal to 1 for 20 lots. In a Chicago single-family home neighborhood, that would amount to about one short-term rental every two city blocks.

Watson said 85 additional permit applications were awaiting the end of the New Buffalo moratorium – first declared in May 2020 and recently extended until December 2021, while city officials consider passing new ordinances that would limit the number of permits. If everything was cleared, Watson said at the meeting, 1 in 13 homes in New Buffalo would have a short-term rental license.

“When those numbers go up, it means there are fewer opportunities for people to live here,” Watson said at the meeting.

Gradowski, now Coldwell Banker’s real estate agent, and her husband, Chad, own a short-term rental property in New Buffalo, about 10 miles south of their home in Saywer, Michigan.

“I have skin in the game,” says Gradowski. She says the city needs “common sense rules that keep everyone safe,” including enforceable limits on the number of occupancies, parking and noise.

At the same time, says Gradowski, “I feel like there’s a message going out that if we don’t get this under control, the whole town of New Buffalo will turn into short-term rentals. I think it’s not very likely. There is a lot of hyperbole out there.

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