LAKE DELTON — Lake Delton village officials are planning several changes to regulate tourist rooming house rules to accurately collect taxes and control the amount of commercial housing. However, property owners argue the proposed changes are too restrictive.
Part of the suggested amendments presented by Village Attorney Richard Cross and a list of the changes provided by the village at a special board meeting Sept. 8 include hiring a property manager, maximum occupancy restrictions and advertising the addresses of the units. No action was taken on the proposed changes. Further discussion is expected at a future meeting.
Other changes would require owners and property managers to sign releases allowing the village to access personal finance information from lodging marketplaces. Condominium associations must approve each unit for a short term rental with less than seven days and use reserve parking spaces for the units to address complaints, according to the list of changes.
No new permits for operating single family and duplex rental properties for less than six days will be allowed. Existing properties already operating as rental units available for less than six days are eligible for renewal of an annual permit. If the property is sold, the permit would not be eligible for renewal. New permits for single family and duplex properties will be issued to qualified tourist rooming houses renting for more than six consecutive days.
The proposed changes are updates to a draft of three ordinances published Aug. 24. The updates address several issues the village has with tourist rooming houses, from nuisance complaints to collecting room tax and premier resort tax money from companies like Airbnb and VRBO.
Cross said the biggest issue with tax collection is there are more than 300 properties in Lake Delton identified on Airbnb as tourist rooming houses while there are only 120 licensed in the village.
“Our ability to track those is difficult and expensive,” Cross said.
Cross said the reasons for restricting tourist rooming houses for less than six days is to control the marketplace and provide more housing opportunities for residents and less for commercial use.
One proposal that drew much outcry from property owners was the requirement of hiring a property manager within a 25-mile radius of the unit should a nuisance happen. Cross said property managers must be licensed by the village, have five properties under contract and three years’ experience. The rule change would go into effect in 2023. Until then, property owners could operate existing units independently.
“We’re seeking to consolidate things with the explosion of Airbnb and all the other companies,” Cross said. “It’s impossible for us to track what’s going on in the community and licensing is crucial for the stability of the marketplace and also making sure the room taxes is collected and also the premier resort tax is collected.”
A property manager permit fee is proposed at $500 per year while an annual individual permit fee is proposed at $1,000.
Deb Sloane, a Waukesha resident who owns a condo in Lake Delton and rents it to tourists, thought the requirement of property owners hiring a property manager was too restrictive. She suggested the village board hire someone to track the rental companies instead. Many property owners agreed with Sloane.
“It’s a restraint of trade,” Sloane said. “Would you say that a homeowner could not sell their house on their own and they must list with a realtor? Of course not. Then why would I, as a property manager managing my own property, be directed to be with a property manager because this board doesn’t have the resources to manage the amount of income from those properties?”
During discussion, many property owners addressed security concerns with advertising addresses, not being able to keep their property if they didn’t meet the five-property threshold. Some were concerned hiring property managers could drive many of those who own smaller rental properties out of business.
Village Board Trustee John Whitfield said many people in bigger tourist cities have had issues with tourist rooming houses because it takes up many residential units, which drives up housing costs. He said the idea of the proposed changes are to create a balance of commercial and residential needs, especially with the demand for housing.
“That is the basis of what we are trying to do is we are trying to protect the ability of people to move into the area and be employed and work at all these restaurants and bars and resorts and gift shops and be able to live here and work here and keep those businesses open,” Whitfield said. “If you try to rent a place here as a full time resident, there are not a whole lot of places to choose from.”
Cross told the public to look at the proposed changes as a “three-year experiment” to make further changes if needed based on industry rules and trends, since some of the changes won’t go into effect until 2023.
Nora Moffit, a Lake Delton resident who lives at Lighthouse Cove in Lake Delton, shared her challenges as a resident in the condominium. She said units rented for short-term rental are overbooked, which has resulted in noise complaints where she had to call the police.
“My point is I appreciate we are trying to regulate,” Moffit said.
Follow Erica Dynes on Twitter @EDynes_CapNews or contact her at 608-393-5346.
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