Lake Geneva City Council Bends the Knee to Industrial Tourism .

Expands when Short Term Rentals can rent in residential Neighborhoods.
Leaves enforcement up to Residents
Enriches local property management companies.

The Lake Geneva city council, with the help of Mayor Todd Krause and the new city clerk expanded the rights of short-term rental (STR) owners and operators to turn residential homes into tourist rooming houses on November 24, 2024. Over the objections of the residents who live in these once peaceful neighborhoods. A real turkey.

Kowtowing to the powerful tourist industry led by Alderman Joel Hoiland, Mayor Todd Krause, Council Vice President, Cindy Yager, Alderpersons: Peg Esposito, Linda Frame,  and Shari Straube voted to replace the current ordinance regulating STRs which was based on the law the Republicans in the State of Wisconsin passed with the help of Realters, allowing homes in residential neighborhoods to become in essence mini hotels without the safe guards of hotels. Hotels must have someone on site. Voting against were Council President, Mary Jo Fesenmaier, and Alderperson Sherri Ames.

Mayor Todd Krause went out of his way and broke the rules by allowing STR operators /owners and fellow business associates to speak before the city council after the public hearings, held before his submissive plan commission, were closed. The last time a council did this they were successfully sued.  During the three plan commission meetings Mayor Krause allowed the owner/ operators to dictate what THEY wanted the new ordinance to be. A truly shameful spectacle. As Alderperson Aimes pointed out several of these operators do not even live in Lake Geneva. There is a saying “Don’t Shit where you eat” and the people around the lake often point to Lake Geneva as an example of what they do not want their communities to become. Owner operator Tom Keefe, whose management company will profit from this new ordinance, lives in Williams Bay, Wisconsin which is the best town on the lake to live and raise a family. Lake Geneva—Not so much.

What the new ordinance will change.

The new ordinance will expand when homes can rent out to tourists daily. Before they had to be rented out a minimum of 7 days per reservation and not more than 180 days per year.  Now they have created an unenforceable fiction called a “booking period.” During this “booking period” they are only supposed to rent for only once per every seven-day period. Or once per every 30 days in the 180 day “Off Season” for a minimum of 2 nights.

How so let us count the ways this won’t be enforceable. It is up to the STR operators to keep the records of who and when they rent. __to in essence to self-report.

95% of all reservations in Lake Geneva are for 2 or three days. Do you really think that a holiday like this year’s 4^th of July which occurred mid-week is not going to be rented to a different group if it is rented on the preceding weekend? Or next weekend? In industry after industry self-reporting does not work.

It is up to the neighbors to help enforce this “booking period” to keep track of who is coming and going on each STR. Nice burden to put on the people who live in Lake Geneva.

The “booking period “fiction also applies to renting outside of the previous 180-day limitation. It can only be rented once, for any length of time per month. Homeowners have always had the right to rent their property for 30 days or more, now they can rent for less than 30 days, but only once per month. Once again it is up to the neighbors to keep track of and report to city hall.

Parking.

The previous ordinance required all parking to be on site. Now the number of parking spaces on site is determined by the number of bedrooms. As Alderperson Frame pointed out there is a three-bedroom house that has 16 to 24 people renting it every weekend. According to Alderperson Yeager they be in violation if they advertise for more people than they put on their application. Not how many people stay in the house. According to Mayor Krause his staff will inspect each home and determine the number of people that can rent the house. Enforcement relies on how they advertise not how many people it holds.

Enforcement.

As Mayor Todd Krause pointed out “from the police standpoint, whether it’s an STR or resident they always give a warning, right? So, I mean that’s generally what they, they don’t generally write tickets right off the bat. They try to warn them.” Penalties only kick in when a citation is issued, and it has gone to court and the court finds the operator guilty.

So, law violations like noise, parking, trespass are not enforceable against guests unless the same group does it and is warned by the police and the police are called back and they (the police) witness the violation.

This puts an unreasonable burden on the residents to call the police after their peaceful and tranquil neighborhoods are disturbed. To call the police not just once but twice to enforce this ordinance. For every different group. We have heard from residents that they are hesitant to call the police in the first place. Yet alone twice. And that they do not want their neighborhoods to be invaded by mini party houses. So, it is up to the neighbors to really enforce this after they have had their peace and tranquility disturbed!!! This is not cool.

As for more tourists renting a home with more than is advertised, the police cannot enter a home without a search warrant and would have a hard time determining if all the tourists in a home are staying there.

Designated Operators.

Designated Operators are the real winners here for they must reside within or have a Lake Geneva STR Management business located within 25 miles of the STR. All the operators (management companies) like Mr. Keefe’s are in favor of this new ordinance. Any owner who lives more than 25 miles away must now use a management company. During the public hearing Attorney Draper pointed out that current litigation is taking place in another municipality challenging this requirement. In that case the operators must be within 75 miles of the STR.

The justification for a local Designated Operator is that they somehow will help prevent and take care of complaints from unhappy neighbors. But as Mr. Draper pointed out “You’re talking about violations by people, by, by people. The STR operator really has no control over.” ……” This isn’t an enforcement provision against owner/operators who really don’t have any control.”

With online booking platforms for STRs or vacation home rentals, the designated operators rarely if ever meet the guests before they check in. They email a lock code and address of the property to self-check-in.  The hosts/operators cannot be waiting for check in at every property since guests can arrive at any time during the check in date. Especially if they are managing multiple properties. There is a new group every weekend. A new group of who knows what!!! A new group that, as Mr. Draper pointed out, the STR operator has NO control over.

It’s all about the Benjamins.

Mayor Todd Krause pointed out the city takes in about $300K in room tax money from STRs. The main purpose of this new ordinance is to clamp down on illegal STRs who are not paying up. Of that $300K ,70% of it goes to tourist promotion or $210K, which leaves $90K to pay the police and city hall staff to regulate. More tourist promotion means more tourists.

Alderperson Mary Jo Fesenmaier pointed out; the operators want more carve outs that the state legislator says the city doesn’t have to do by extending STRs into the 180 days off season. Alderperson Yeager wants more room tax money so wants to extend the STR rentals to the 180 days off season, which this ordinance does by including those days as part of the “booking period.” Rentals of 30 days or more do not pay room tax or sales tax.

What about the residents who live here.

Resident Kirk Ledoux summed up this setup by Mayor Krause.

“I spoke earlier at a committee meeting about my concern about the 180 days limit and I was assured well, that’s not even on the platform, which it’s not right now. But at the last meeting, multiple short term rental owners once again spoke about how limiting this was and this was preventing them from maximizing. Their profits, and I understand that, but I think.

The other side of that is they need to understand we are in this position because of state legislation that prevents the city of Lake Geneva from enforcing their own districts or holds or zones. I’m the president of a company I appreciate business. I’m in staffing. I can’t just open a branch wherever I want.

I can’t buy the house next to your property and open my business. There are districts and codes and zoning laws that would prevent that. Because of this legislation, short term rental owners can buy any house and turn it into a short-term rental property.

I can tell from my neighborhood and SRTs, I have not spoken to anybody that is really happy about the proliferation of short-term rentals in this Community. We’re not, so I’m sorry to be the real negative Nelly here, but the reality is if you go into the community.

Asking you to lift the 180 days limit they will, and I am telling you, I don’t believe there’s any stomach in this community to see that happen. I think we’re hoping future short term rental owners look at our community and say, you know what, it’s probably not where we want to be. I also appreciate their argument that the benefit.

We’ve always had people. It’s a beautiful community. People have come here; we have plenty of hotels. We have hotel space and in fact, that’s who they’re competing with. So there needs to be a balance. There needs to be a balance between the resort community, and we need the tourists. Without a doubt, the tourists are the lifeblood of the city. No one’s arguing that.

We need them, but we also need our community and some of the owners of the previous meeting were almost acting like we’re overreacting and almost making it up. It’s not. I’m here on a Monday. I’m only down to points in my Fantasy Football League. The game tonight really matters to me.

And I’m still here. It is an issue. It is upsetting the fabric of our community. Every weekend, my dog goes nuts because there’s a different group of people every weekend. I got to try and explain the property line. The neighbor across the street from mine has had her flower beds trampled. She’s an 80 plus year old lady who takes care.

And that’s what she cares about. She’s got to constantly take Frisbees. They fly over a fence and return them to strangers every weekend. It does upset the fabric of our neighborhoods. That’s the reality. Thank you. Thank you.”

“Last week I asked myself a question, so I also asked it in May. Do public comments make any difference? Are they just a formality? If they do matter, why haven’t they seemed to matter?” Scott Robinson -Resident.

The current ordinance that this replacing would have driven 95% of the weekend warriors out of STRs and into downtown hotels, if it was enforced.

Alderperson Fesenmaier.” I’m wondering why we can’t just use the current ordinance, because it takes care of the parking. It clearly specifies none of this on the street and all over the sidewalks and whatever. That’s another biggie for people.”  It also would ban rentals for less than 7 days per reservation and more than 180 days per year which was the original intent of the Wisconsin legislation.

City Attorney Dan Draper in a written memo to the city council on November 8,2024.

The changes to the ordinance that are contrary to state statute §66.1014, Wis. Stats., are found in 98-206(8)(y) 1 c. iii and iv. The state statute on Short Term Rentals states that “Subject to par. (d), a political subdivision may not enact or enforce an ordinance that prohibits the rental of a residential dwelling for 7 consecutive days or longer.” §66.1014(2)(a), Wis. Stats. The statute provides that the City can ban the rental of residential dwellings for less than 7 days.

The other provision at subsection Sec. 98-206(8)(y) 1 c. iv is also contrary to the intent of §66.1014(2)(d) 1., Wis. Stats., which states that “If a residential dwelling is rented for periods of more than 6 but fewer than 30 consecutive days, a political subdivision may limit the total number of days within any consecutive 365-day period that the dwelling may be rented to no fewer than 180 days…” Subsection iv provides an example wherein an individual would be permitted to rent to a transient for 7 days outside the 180 days. This would be additional short-term rentals outside the 180 days permitted by the license.

The changes Mr. Draper recommended were not incorporated in the ordinance.

How other communities deal with STRs.

The city of Madison, Wisconsin requires STR owners to live on the property they rent as a STR and it must be their primary residence. Problems solved.

On the west coast, which has had a more libertarian slant towards property, neighbors have had to erect six-seven-foot fences around the back yards to try to contain the problem. Other cities have said no street parking and have ticketed the tourists who rent the STRs $500 per day per car that parks on the street. This is very effective because the tourists then write a very negative review.

Bottom line: this new STR ordinance expands the rights of STR owners to rent for less than 7 days in the rental season and  in the “Rental Off-Period” of 180 days. While enriching local property management firms.

Update 12.12.2024

Italy has banned lockboxes for Airbnbs and other short-term rentals.

“The need has arisen to implement stringent measures aimed at preventing risks to public order and safety in relation to the possible housing of dangerous persons and/or persons linked to criminal or terrorist organizations,” Italy’s Police Chief Vittorio Pisani said in a notice obtained by news service AFP via Barron’s.