Court of Appeals Protects Property Rights of Homeowners

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Websites like Air-BNB and VRBO allow users to rent out their home on a short-term basis.  This gives travelers an alternative to hotels – alternatives that might be cheaper, more convenient, or more comfortable.  Last time my wife and I took a vacation to Phoenix, we stayed in a beautiful house with enough room for 3 couples for way cheaper than we could have gotten a comparable hotel suite.

A court decision released today helps protect such free market enterprises.  The City of Cedarburg attempted to stop two homeowners from renting out their homes as short-term rentals, arguing that it was not a “permitted use” under their zoning ordinances.

However, the circuit court and court of appeals both agreed that if the government wants to stop owners from using their property in any way they see fit, government at least needs a law clearly banning the practice.  “Such a restriction on the free use of private property must be done clearly and unambiguously in the ordinances,” the court of appeals said.  The court found that “single family residential” was a broad enough permitted use to include short-term rentals.

Unfortunately, the opinion leaves open the possibility that local governments can ban the practice, so long as they do so clearly.  I hope Cedarburg and other cities, villages, and towns neither ban it nor try to regulate it out of existence.  This market has done an excellent job of self-regulating so far without any government “help”.

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