Short-term rentals not allowed in R-1 residential district in Wisconsin county

by Andrea Vaage

Vilas County v. Accola
Wisconsin Court of Appeals, May 12, 2015

The Accolas own a home on Rosalind Lake in Vilas County, Wisconsin, which is not their primary residence. The property is zoned R-1 Residential, which allows the following permitted uses:

  • Single-family detached dwelling units, including individual mobile homes, which meet the yard requirements of the district.
  • One non-rental guesthouse, which may be occupied on a temporary basis.
  • Parks, playgrounds, golf courses and other recreation facilities.
  • Home occupations.
  • Essential services.
  • Hobby farms.

The Vilas County zoning ordinance also includes an R/L Residential Lodging district. The purpose of the Residential/Lodging District, as stated in the ordinance, is to “provide for areas with primarily low-density residential use, but with some mixing of low-density Transient Lodging.” Transient Lodging is defined as “a commercial lodging establishment, which allows rental of sleeping quarters or dwelling units for periods of less than one month.” The R/L District lists the following permitted uses:

  • All uses permitted in the R-1 District.
  • Bed and breakfast establishments.
  • Resort establishments with no contiguous multiple-family dwelling units.
  • Rental of residential dwelling unit.

Shortly after purchasing the property the Accolas began advertising the property for rent on the internet for stays as short as two days. The County advised the couple that single-family residences in the R-1 district could not be rented for less than one month. In response, the Accolas established a corporation called Better Way to Live. The couple had people staying at the property “donate” to the corporation for cleaning, utility, and other expenses, and allegedly gave the remainder of the donation to charity. The County determined that donating posed no functional difference from renting the property. The circuit court enjoined the Accolas from renting the Rosalind Lake property for durations of less than thirty days, and the Accolas appealed.

The property is located in the R-1 residential district, which allows single family detached dwelling units, but makes no mention of whether renting the unit is allowed. The County asserted that rentals under one month were prohibited in the R-1 district because they are specifically permitted in the R/L district. Thus, if short-term rental was allowed in the R-1 district, then the additional language in the RL district ordinance would be meaningless.

The Court of Appeals agreed with the County.  When the R-1 district regulations are read in context with the R/L regulations, the only reasonable conclusion is that the phrase “rental of residential dwelling unit” in R/L refers to rentals of residential dwelling units for periods of less than one month.  The zoning ordinance unambiguously permits in the R/L district both: (1) the rental of single-family detached dwelling units for periods of less than one month; and (2) all uses permitted in the R-1 district, which includes single-family detached dwelling units. “If the Accolas were correct that the rental of single-family detached dwelling units for periods of less than one month was a permitted use in the R-1 district, then the section of the R/L district regulations permitting the rental of single-family detached dwelling units for periods of less than one month would be superfluous because all uses permitted in the R-1 district are already permitted in the RL district.”

The Court affirmed decision granting summary judgement to the County.

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.

Error to interpret list of accessory uses as an exhaustive list precluding other uses

by Kaitlin Heinen

City of Orono v. Jay T. Nygard, et al.
(Minnesota Court of Appeals, October 22, 2012)

Jay and Kendall Nygard live in a district of the City of Orono zoned as One-Family Lakeshore Residential (LR-1B). On October 13, 2010, the Nygards applied for a permit to erect a wind turbine on their property. Two days later on October 15, the City denied the Nygards’ permit application in a letter from the City’s Planning and Zoning Coordinator, which stated that wind turbines are not a permitted accessory use on property zoned LR-1B. On November 12, 2010, city employees observed a concrete footing being installed on the Nygards’ property, which they believed was being done to erect the wind turbine despite the City’s denial of their permit application. On November 16, 2010, the City issued a stop-work order and demanded that the Nygards remove the concrete footing. The Nygards disregarded this order and completed the wind turbine by February 2011.

In March 2011, the City filed suit in district court for a declaratory judgment that the Nygards’ wind turbine was not in compliance with the City’s zoning  ordinance.  In April 2011, the Nygards’ filed a separate suit against the City, challenging the City’s denial of their permit application. The district court consolidated the two cases. In March 2012, the district court granted the City’s motion and denied the Nygards’, holding that the City’s zoning ordinances clearly set forth a list of lawful accessory uses, which does not include wind turbines. The Nygards appealed to the Minnesota Court of Appeals.

The Nygards argue that the City misinterpreted 78-329 of the Orono City Code as setting forth an exhaustive list of lawful accessory uses, thereby forbidding wind turbines on LR-1B property. In contrast, the Nygards argued that section 78-329 is a non-exhaustive list and that their wind turbine is within the general definition of accessory uses. In reviewing the City’s interpretation of its zoning ordinance, the Minnesota Court of Appeals considered three principles: “First, courts generally strive to construe a term according to its plain and ordinary meaning…Second, zoning ordinances should be construed strictly against the city and in favor of the property owner…[Third,] A zoning ordinance must always be considered in light of its underlying policy.”

In regards to the first principle, the zoning ordinance should be interpreted according to its plain and ordinary meaning. It is reasonable to interpret 78-329 to mean that the nine accessory uses listed are the only lawful accessory uses in the LR-1B district. But the Nygards argue that 78-329 also can be reasonably interpreted to allow accessory uses that are not listed because the language of section 78-329 is different from the language of nearby sections of the zoning code, which are more explicit in foreclosing the possibility of other allowed uses.  Section 78-329 – the section in question – states that “the following uses shall be permitted accessory uses.”  Section 78-327, in contrast, states that “no land or structure shall be used except for” a list of specified uses, while another section – Section 78-566 – states that “no accessory structure or use of land shall be permitted except for one or more of the following uses.” Because 78-329 does not use the same type of strong language to negate the possibility of lawful accessory uses not listed within the ordinance, it is reasonable to interpret 78-329 more broadly to allow other accessory uses. Furthermore, the city conceded that it has interpreted 78-329 in other past situations to allow accessory uses that are not expressly mentioned. For example, the City has allowed structures such as flagpoles, basketball hoops or clotheslines within the LR-1B district.

In light of the City’s inconsistent interpretation of 78-329, the Minnesota Court of Appeals did not uphold the City’s denial of the Nygards’ permit application.  It ruled that the City erred when it denied the Nygards’ permit application, and that the district court also erred in entering judgment in favor of the City. The Minnesota Court of Appeals reversed the district court ruling and remanded the matter to the City for further consideration of the Nygards’ permit application.

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