Single-family residential district provisions construed to allow short-term rentals

by Hannah Dankbar

Heef Realty and Investments, LLC & Sandra Desjardin v. City of Cedarburg Board of Appeals
Wisconsin Court of Appeals, February 4, 2015

In September 2012 two homeowners received citations for renting out their homes on a short-term basis. They appealed the citations, but their challenges were denied by the City of Cedarburg Board of Appeals (BoA), which concluded that the Cedarburg zoning ordinance did not allow the short-term rental of homes in a single-family residential district. The homeowners sued.  The question before the court was whether short-term rental is a permitted use of property in a single-family residential district.

The zoning ordinance in question reads in part:

RS-5 SINGLE-FAMILY RESIDENTIAL DISTRICT

(b)     Permitted Uses.

(1)     Single-family dwellings.

(2)     Family day care home.

(3)     Foster family home.

(4)     Community living arrangements which have a capacity for either (8) or fewer persons served by the program.

(5)     Essential services.

Zoning Code art. C, § 13-1-46.  Thus, the Ordinance lists “single-family dwellings” as a permitted use in a “single-family residential district.”

The BoA argued that to qualify as a single-family dwelling under the ordinance the property must be the occupant’s established residence.  The owners, on the other hand, argued that the plain language of the ordinance permits a short-term rental, that ambiguity in the ordinance must be resolved in favor of the free use of property, and that Wisconsin case law and that of other jurisdictions makes it clear that short-term rentals are a permitted use of a single-family dwelling.

The Court of Appeals sided with the owners.  It looked to a prior Wisconsin case in which the issue was a time-share, where thirteen families would own the property and each would use it for four weeks per year.  The court in that case reasoned that the use constituted a single-family dwelling because only one family would be staying in the property at a time.  According to the court the same reasoning holds true for short-term leases: the property will only be used by family at at time.  The ordinance does not require occupancy over a period of time, and the BoA cannot arbitrarily impose such a restriction.  Construing the ordinance in favor of the free use of property demands that short-term rentals be allowed in the city’s RS-5 district.

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