City Rule Change Could Wipe Out Most Airbnb Bookings in E.C.
proposed ordinance would require minimum seven-day stay
Hoping your friends can find an Airbnb or other short-term rental when they visit Eau Claire? That could become a lot harder under a new ordinance that the Eau Claire City Council will consider on Tuesday, Dec. 10.
Among other things, the proposed rule would require a minimum seven-night stay at a short-term rental (STR) property like an Airbnb or VRBO. It would also require that STRs be only available for rent a maximum of 180 days per year.
During a public hearing on the ordinance at the Eau Claire Plan Commission meeting on Dec. 2, a local tourism official noted that more than 90% of short-term rental bookings in Eau Claire were for fewer than seven nights.
“The proposed restrictions will significantly alter the landscape of short-term rental availability in Eau Claire,” said Kenzi Havlicek, executive director of Visit Eau Claire, the local tourism promotion organization. “Today’s travelers increasingly seek diverse lodging options, including non-traditional accommodations such as short-term rentals.”
Havlicek said prohibiting stays of fewer than seven nights would discourage visitors who come for festivals and other community events, who might instead find accommodations in other communities, depriving the city of room tax dollars. She said that short-term rentals generate about $80,000 a year in room tax revenue, about $24,000 of which goes directly to the city budget.
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The proposed restrictions will significantly alter the landscape of short-term rental availability in Eau Claire.
KENZI HAVLICEK
EXECUTIVE DIRECTOR, VISIT EAU CLAIRE
A city staff report for the City Council outlining the proposed ordinance changes said they are meant in part to protect housing supply, particularly in high-demand areas downtown and near the UW-Eau Claire campus. “These residential areas currently provide naturally occurring affordable housing through long-term rentals, which are particularly susceptible to being converted into Short-Term Rental properties,” the report stated.
Nationwide, some cities – most notably New York – have imposed severe restrictions on short-term rentals in the hopes of address housing affordability. But Scott Rogers, vice president of governmental affairs for the Eau Claire Area Chamber of Commerce, told the Plan Commission his organization is skeptical of this approach. “Increasing our community’s housing supply and ensuring affordability is a top policy priority of the chamber,” Rogers testified. “While on the surface it might sound like limiting short-term rentals would help with availability, in reality, it would have little or no positive impact. It would in fact be counterproductive, and would negatively effect the broader local economy in ways that would far outweigh any perceived benefits.”
According to the city staff report, there are state-imposed limits on how municipalities can regulate short-term rentals such as Airbnbs. Specifically, the report said, these rentals can’t be limited on the basis of density or owner occupancy, nor can they be banned altogether. However, cities can regulate the amount of time rentals can be available “to 180 days maximum and/or requiring a seven-night minimum stay.”
The report goes on to note that City Manager Stephanie Hirsch and City Council President Emily Berge discussed the issue of short-term rentals during meetings with constituents this fall. “Opinions were mixed on the topic, but overall comments from residents shared support of regulating STRs,” the report said. Residents were more supportive of the 180-day maximum rental period than the seven-day minimum, the report stated. However, under state law, the former regulation can’t be imposed without the latter.
“We know that we could come up with a better way of regulating these (STRs) in our city, but the state really limits us on how we can,” Assistant City Planner Katrina Running told the Plan Commission. The proposed regulations would reduce residents’ worries about “party houses” that could cause neighborhood problems and would likely limit the conversion of affordable housing to short-term rentals, but could also reduce room tax collections, Running added.
“I personally have no doubt that a seven-night minimum would devastate our tourism.”
SUSAN WOLFGRAM
EAU CLAIRE PLAN COMMISSION MEMBER
At the Dec. 2 meeting the Plan Commission voted to recommend that the City Council tweak some of the rules surrounding short-term rentals, most notably streamlining the way they are licensed with the city. However, several Plan Commission members expressed skepticism about imposing more severe restrictions, such as the seven-night rule.
“I personally have no doubt that a seven-night minimum would devastate our tourism,” said Plan Commission member Susan Wolfgram. “I am a supporter of keeping this vibrant economy going, which is also going to enhance affordable housing.” Instead, Wolfgram said she would support a two-night rental minimum.
Plan Commission Chairman Greg Helgeson said that it’s notable that commission members got no emails from constituents in favor of the strict proposal. “I would hope we could come to a less restrictive duration somehow,” he said.
According to the city, there are only 23 licensed short-term rentals in Eau Claire, while about 40 Airbnbs are operating illegally. (For context, there are approximately 12,000 rental units in the city.)
City Council Member Andrew Werthmann, who also serves on the Plan Commission, said he shares the concerns of neighborhood leaders about how the increasing number of short-term rentals can change the character of their neighborhoods.
“You say, ‘Well, how many homes is this going to effect? Is it 100 homes at max?’ ” Werthmann asked. “Well, we have a homeless population in our community that is anywhere from 100 to 150 people. So we’re not talking about wildly different numbers.”
The Eau Claire City Council will hold a public hearing on the proposed ordinance change as part of its meeting at 6pm Monday, Dec. 9, at City Hall (203 S. Farwell St., Eau Claire). The City Council will then consider voting on the ordinance during its legislative session at 4pm Tuesday, Dec. 10, at the same location.
