Here's why Neenah requires permits for Airbnbs, and why the city was challenged in court
NEENAH — There are ways that cities can, and can't, regulate Airbnb-type properties in Wisconsin. Some municipalities choose not to put local rules in place, so as not to run afoul of state law.
In 2017, the city of Neenah created its own tourist housing ordinance. Soon after, state law was updated, and Neenah's rules were later challenged in court. Ultimately, the city had to make one tweak last year.
Neenah is one of the few municipalities in the area that have implemented regulations. So, The Post-Crescent looked at the city's permit system as part of a series about short-term rentals.
Last month, the newspaper explored why it's so tough to pinpoint exactly how many short-term rentals are operating in the Fox Cities. The Post-Crescent compiled data from state and local agencies to identify roughly 120 short-term rental listings, including five in the city of Neenah.
Articles in the coming weeks will delve into other issues, including the potential effects on hotels, neighborhoods and the housing market.
Neenah sought balance with ordinance
Neenah started weighing regulations after receiving a complaint from a property owner who lived next to a house which was being used as a short-term rental, according to Brad Schmidt, Neenah's deputy director of Community Development.
The city didn't have a specific ordinance in its zoning code that applied to the situation, Schmidt said, so city staff and the plan commission looked into the issue and at what other communities had done.
The goal, he said, was to "find a happy medium between no regulations and over regulating." They wanted to protect surrounding property owners and maintain the single-family nature of neighborhoods, while also allowing flexibility for property owners to rent their homes on a short-term basis, according to Schmidt.
"I think, overall, the ordinance has done what it's intended to do, and I think it’s worked very well," Schmidt said.
What's relatively unique about Neenah's ordinance, he said, is the city doesn't require a tourist housing permit if a person plans to only rent their property out one time a year, for less than a week. That's because Neenah didn't want to disrupt the type of housing people had long provided during EAA's AirVenture convention week in Oshkosh, he said.
Among other things, the ordinance says:
There should be at least two designated off-street parking spots for guests.
Third-party property management companies are strictly forbidden.
Guests must abide by the city's noise regulations.
The owner is responsible for all applicable lodging and room taxes. (Neenah has a 10% room tax rate.)
A tourist housing dwelling unit cannot exceed 10 individuals.
Lawsuit alleged Neenah violated state statute
Not long after Neenah passed its ordinance, the state adopted 2017 Act 59, Schmidt said, which limited how municipalities could regulate short-term rentals.
In 2022, the Wisconsin Realtors Association, Inc., filed a lawsuit against the city in Winnebago County Circuit Court. Specifically, the association argued three parts of the ordinance violated state statute:
The tourist housing property shall be the primary residence of the applicant.
A tourist housing property may be rented up to 120 days within a calendar year.
Tourist housing permits, once granted, may be revoked by the Director of Community Development Department for cause. (So far, the city hasn't had to do that, according to Schmidt.)
Last year, a judge determined the first and third items could stand, but the second violated state statute. Wisconsin law states that if a home is rented for periods of more than six but less than 30 consecutive days, a "political subdivision" (a city government, for example) 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."
The city council amended the ordinance, and Schmidt said overall, he's very comfortable with the rules that Neenah has now. The city will continue to monitor state legislation, and it's important that each community can regulate these properties the best way they see fit, he said.
Schmidt was glad to keep the primary residence piece, he said, because Neenah wanted to prevent an "influx of business interests coming into the community, buying houses for the sole purpose of renting them out for short-term rentals."
The Post-Crescent asked how much money Neenah spent on the lawsuit. City Attorney David Rashid said his office defended the suit in-house, so "we incurred no additional costs/fees as a City, other than a nominal cost/fee here and there," amounting to $13.
More: It's tricky to tally up all of the short-term rentals in the Fox Cities, but here's what we found.
How to get a Neenah permit, state license
Neenah's ordinance requires interested parties to obtain a tourist housing permit from the city's Department of Community Development.
Applicants have to pay a one-time $50 fee and notify all residents within 200 feet of the proposed tourist housing property. Operators must reapply each year, but there is no additional cost. While the ordinance allows for inspections, Schmidt said he doesn't anticipate his department would do that unless there's a reason.
Neenah recorded five permitted properties in late 2023, but there could be more that are not following the rules. It's difficult to know, Schmidt said. Every so often, Schmidt's team looks at websites and other databases to identify short-term rentals in the city. If they find one that is not permitted, they send a letter explaining the ordinance, he said.
People who operate a short-term rental for more than 10 nights a year also need a tourist rooming house license from Wisconsin's Department of Agriculture, Trade and Consumer Protection. For properties in the city of Neenah, that license is issued through Winnebago County Public Health.
The agency will conduct an inspection before a new license is approved, and again once every licensing year, according to spokesperson Ashley Mukasa. There is a $202 one-time, pre-inspection fee, plus an annual fee of $144.
There were no tourist rooming houses licensed with the agency in the city of Neenah in late 2023, according to Mukasa.
Editor's note: This article is part of a series about short-term rentals in the Fox Cities that will publish in the coming weeks. Do you have experience with such rentals, either as an owner, customer or neighbor, that you'd like to share? The Post-Crescent wants to hear from you.
Reach Becky Jacobs at bjacobs@gannett.com or 920-993-7117. Follow her on Twitter at @ruthyjacobs.
This article originally appeared on Appleton Post-Crescent: City of Neenah requires permits for Airbnbs, short-term rentals
