But even so, Wisconsin remains one of the nation’s friendliest states to short-term rental operators, said Marquette University finance professor Anthony Pennington-Cross.
Pennington-Cross studies how short-term rentals are affecting local economies and recently appeared on Wisconsin Public Radio’s “The Larry Meiller Show” to discuss his findings.
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Here are a few highlights:
Airbnb drives up home prices
Pennington-Cross found doubling Airbnb rentals in a Wisconsin neighborhood raises the housing prices by about 11 percent. This pattern primarily happens in more rural places, however. More urban places see minimal effects.
“Bringing more people is not crowding out the existing folks. It’s increasing demand where there is room for more supply,” Pennington-Cross said. “That’s not going to be true on the lakefronts and the (more rural) places.”
Rent prices also tend to grow with more short-term rentals nearby, because the short-term units take up multi-family housing stock, Pennington-Cross said. Some new multi-family developments are including short-term rental units, too.
“That restricts the supply of rentals for residents,” he said.
Need for more compliance
Pennington-Cross expects more regulations of the short-term rental market in the future. While some communities are establishing rules, such as licensing mandates, there continue to be problems worth addressing, he said. Improved compliance with existing regulations could be one place to start.
“I would recommend starting that process and asking for compliance, because enforcement is hard,” Pennington-Cross said. “But if you could work as a neighborhood and ask for information, at least from existing Airbnbs, then that could be useful.”
Changing community culture
Although the rapid growth of short-term rentals in Wisconsin appears to be slowing, Pennington-Cross said the market can continue to influence the character and culture of communities. Some may transform from being predominantly residents to all visitors.
“My take is: Airbnb is here. It’s going to stay,” he said. “If you want that to stop or at least have some control over it or to limit the number of days … it sounds like that’s something your municipality can work toward.”
The short-term rental market is easy to enter and leave, he said. Renting can bring additional income to communities through tourism or rents. The market can also help a smaller state like Wisconsin accommodate hosting major events, such as national political conventions.
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