Officials say rules don't apply

Former city planning director calls nightly rentals 'illegal'


— A former planning director for the city claims the practice of renting out one's home on a nightly or even on a short-term basis is illegal under the city's Community Development Code.

That goes against the argument made by the current planning director, Wendie Schulenberg, and her staff, who claim that because the issue of nightly rentals is not mentioned in the code, it is an allowable use.

Anne Muhme, who left the city planning director position on Sept. 20, 1996 after serving in that capacity for just less than four years, however, points to a section of the code that states that anything not mentioned as an allowable use is prohibited under the code. That section reads:

"No structure shall hereafter be erected, reconstructed, altered, enlarged or moved, nor shall any building or land be used for any purpose, other than for a use permitted in this chapter in the zone district in which it is located."

Muhme said that the city interpreted the code from 1985 through 1996 as prohibiting nightly and short-term rentals, though she said the practice probably went on regardless.

Muhme, in fact, could not remember a single instance of a nightly renter being cited for violating the code during her four-year tenure as planning director. That doesn't mean, however, that she doesn't think they should be.

"If we knew about it, we would have looked into it," Muhme said.

Muhme said she is bringing up the discrepancy now, even though the city code is being rewritten, because the public needs to know that the city's movement on this issue represents a change in policy. She said the change is toward allowing nightly and short-term rentals regulations that, while far from being a new concept in the code, are actually more far-reaching than the city has acknowledged.

"The new code is creating something called a short-term rental as well as legalizing nightly rentals," she said.

City Attorney Tony Lettunich said the code is unclear on the regulations the city places on nightly rentals, but that the city's interpretation is that it does not necessarily preclude the practice.

"The decision made years ago was as long as the code is as vague as it is, let's amend it in the new code. Of course, it's been going on for four or five years now," Lettunich said.

Lettunich said the city has not enforced any regulations on the practice of nightly rentals beyond collecting sales tax, but that the city is hoping to get the issue resolved now that the new code is being discussed.

"The best thing to do is to make a decision and make the language clear," Lettunich said.

The question centers around the debate over whether nightly rentals are commercial enterprises, as many have claimed, or simply another residential use of a property.

Schulenberg said the practice of renting on a nightly basis, as it has been interpreted by the city in the past, qualifies as a residential use of property.

She said that nightly rentals cannot be easily separated from other dwelling units in which people sleep and eat. She has maintained that the omission of nightly rentals in the current code means that the practice is not regulated.

Lettunich points to the legal ambiguity about when a rental is short-term and when it is long-term. Although sales tax is collected when a home is rented for less than 30 days, the definition of nightly and short-term rentals is hard to pin down, as there is no established limit in terms of the legal length of stay, Lettunich said.

If a family rents its home out for a few weeks on a one-time basis while it is away on vacation, is that different from someone who offers his or her home for rent 10 months out of the year through a property manager?

"Where is the cut-off?" Lettunich asked.


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