Wisconsin REALTORS® Association: Stay, Play and Pay

Stay, Play and Pay

How short-term rentals boost Wisconsin’s economy despite local roadblocks

 Nathan Conrad, WRA Director of Local and Grassroots Advocacy  |    November 04, 2024
ShortTerm

For more than seven years, Wisconsin’s right to rent law has prohibited local units of government from banning short-term rentals of seven days or longer. These rentals provide a boon to local communities and property owners alike, driving the state’s economy forward by opening new avenues for tourism while preserving the Badger State’s natural beauty and charm.

Since its inception in 2017, the right to rent law has seen many local governments attempt to circumvent its restrictions, which allow local governments to “reasonably regulate short-term rentals.” In fact, the WRA is currently engaged in 14 lawsuits across Wisconsin, challenging local governments for banning or unreasonably restricting short-term rentals.

The WRA’s Legal Action program views this battle as crucial to protecting property rights — not only for short-term rental owners but for all property owners in Wisconsin. Some short-sighted local governments are, in essence, biting the hand that feeds them. Short-term rentals play a significant role in Wisconsin’s prosperous tourism economy.

Tourism is a major component of Wisconsin’s overall economy. In 2023, the state saw $25 billion in total economic impact from tourism, a 5.4% increase from 2022. Also in 2023, Wisconsin welcomed 113 million visitors — nearly 2 million more than the previous year — including over 46 million overnight stays. This marked the second consecutive year of record-breaking overnight visits. On average, these visitors spend three times more than day travelers.

And where do they stay? Not simply in hotels. Many travelers to Wisconsin opt for short-term rentals because of the flexibility and amenities such properties offer. What both visitors and locals may not realize is the substantial economic impact these stays generate. All 72 counties in Wisconsin saw an increase in economic benefits from tourism last year, with the industry generating over $1.6 billion in state and local tax revenue.

Part of the increase in local ordinances attempting to ban or overly restrict short-term rentals is driven by community members mistakenly informing their local governments that short-term rental properties reduce housing stock, cause community disruptions, or create blight due to poor property management.

While largely anecdotal and generally untrue, this misinformation harms property owners, poses challenges for the short-term rental industry, and affects local government tax revenues.

What has not been done — until now — is a thorough investigation into the actual economic impact of the short-term rental industry in Wisconsin. The WRA, with the support of a grant from the National Association of REALTORS®, is currently conducting an exhaustive study on the economic impact of short-term rentals in four areas of the state.

The study, focusing first on the community of Lake Geneva and then on Vilas, Oneida and Door counties, is expected to be completed by spring of next year. It will provide valuable context and indisputable third-party data to highlight the economic benefits of the short-term rental industry, while also countering unfounded claims about its impact on housing inventory.

These counties were chosen because many of the lawsuits the WRA is currently involved in, related to overreaching local ordinances, originate in these areas. With this study, the WRA aims to inform local officials about the net benefits of short-term rentals, and to continue educating the public and policymakers in Madison about the positive contributions all property owners make to Wisconsin’s economy.

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