Racine Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short Term Rental Business in Racine

The City of Racine has specific regulations in place for short-term rentals, also known as tourist rooming houses, which include properties listed on platforms like Airbnb and Vrbo. Property owners must obtain a permit from the City of Racine Public Health Department and undergo annual inspections to legally operate a short-term rental in Racine.

According to the city's "Short-Term Rentals - Getting Started" guide, a short-term rental is defined as the "rental of a whole or partial residence to visitors for less than 30 days." Property owners must obtain a Short Term Rental / Tourist Rooming House permit before offering this service to visitors.

To apply for a permit, property owners must:

• Submit an application to the City of Racine Public Health Department
• Schedule and pass a joint inspection by the Building, Fire, and Public Health Departments
• Obtain a Wisconsin Tourist Rooming House License from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP)
• Register for and pay municipal room tax to the City Clerk's Office
• Report and pay Wisconsin sales tax (5.1% in Racine - 5% state, 0.1% stadium)

Short-term rental permits must be renewed annually, with inspections occurring at least once every permitting year. The permitting year runs from July 1 to June 30.

In addition to the permitting requirements, the City of Racine has several regulations for short-term rentals, including:

1. The short-term rental must be located within the host's primary residence
2. Rentals are limited to periods of less than 30 consecutive days
3. All required permits and inspections must be kept current
4. Litter, debris, and refuse must be stored in closed containers
5. Guest and resident vehicles must be parked on a hard surface of concrete, asphalt, or paverstones

Property owners should also be aware of any lease agreements, cooperative housing rules, condominium bylaws, homeowner association covenants, or tenant organization regulations that may impact their ability to operate a short-term rental.

By adhering to the city's permitting requirements and regulations, property owners can legally operate short-term rentals in Racine while contributing to the local economy through room tax collection and increased visitor spending.

Short-Term Rental Licensing Requirement in Racine

The City of Racine requires property owners to obtain a tourist rooming house license to legally launch a short-term rental within the city limits. A short-term rental, also known as a tourist rooming house, is a residential dwelling offered for rent for a fee and for fewer than 29 consecutive days.

To apply for a tourist rooming house license, property owners must submit an application to the City of Racine's Department of City Development. The application must include the following information and documents:

1. The property owner's name, address, and contact information
2. The address of the short-term rental property
3. A floor plan of the property, including the number and location of bedrooms and bathrooms
4. Proof of property ownership or a lease agreement if the applicant is a tenant
5. A completed self-inspection checklist to ensure the property meets all health and safety requirements
6. Payment of the license fee, which is currently $100 per year

Once the application is submitted, the Department of City Development will review the application and may conduct an inspection of the property to ensure compliance with all applicable regulations. If the application is approved, the property owner will be issued a tourist rooming house license, which must be renewed annually.

It's important to note that the City of Racine has specific zoning requirements for short-term rentals. Tourist rooming houses are only permitted in certain zoning districts, such as residential and commercial areas. Property owners should check with the Department of City Development to ensure their property is located in a permitted zoning district before applying for a license.

In addition to the licensing requirement, short-term rental operators in Racine must also comply with other regulations, such as occupancy limits, parking requirements, and noise restrictions. Failure to comply with these regulations may result in fines, penalties, and the revocation of the tourist rooming house license.

Required Documents for Racine Short-Term Rentals

To apply for a tourist rooming house license and legally operate a short-term rental in Racine, Wisconsin, property owners must submit the following required documents along with their application:

1. Completed application form: The application form must be filled out completely and accurately, providing information about the property owner, the short-term rental property, and the proposed operation.
2. Proof of ownership or lease agreement: Property owners must provide documentation confirming their ownership of the property, such as a copy of the deed or a recent property tax bill. If the applicant is a tenant, they must provide a copy of the lease agreement showing that they have permission to operate a short-term rental on the property.
3. Floor plan of the property: A detailed floor plan of the short-term rental property must be submitted, clearly showing the layout of the property, including the number and location of bedrooms, bathrooms, and common areas. This helps the city ensure that the property meets the necessary safety and occupancy requirements.
4. Completed self-inspection checklist: Property owners must complete a self-inspection checklist provided by the city to ensure that the property meets all health and safety requirements. This checklist covers items such as smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency exits.
5. Proof of insurance: Property owners must provide proof of liability insurance for the short-term rental property. This insurance should cover potential damages or injuries that may occur during a guest's stay.
6. Payment of license fee: The application must be accompanied by the payment of the $100 annual license fee. This fee is non-refundable and must be paid each year to renew the tourist rooming house license.

In addition to these required documents, the City of Racine may request additional information or documentation as part of the application process, such as a business plan or a guest registry template.

It's crucial for property owners to carefully review and gather all the necessary documents before submitting their tourist rooming house license application. Incomplete applications or missing documentation can delay or deny the license.

Racine Short-Term Rental Taxes

Property owners who operate short-term rentals in Racine, Wisconsin, are required to collect and remit various taxes to the city and state. These taxes include the Racine Room Tax and the Wisconsin Sales Tax.

The Racine Room Tax is a 6% tax imposed on the total gross receipts from the rental of any room or rooms, lodging, or other accommodations for a period of less than 30 consecutive days. This tax applies to short-term rentals, including those listed on platforms like Airbnb and Vrbo.

Property owners must collect the Racine Room Tax from their guests and remit the tax payments to the City of Racine on a quarterly basis. The quarterly reporting periods are as follows:

1. January 1 through March 31
2. April 1 through June 30
3. July 1 through September 30
4. October 1 through December 31

Room tax payments are due on or before the last day of the month following the end of each quarterly reporting period. For example, room tax payments for the first quarter (January 1 through March 31) would be due by April 30.

In addition to the Racine Room Tax, short-term rental operators must also collect and remit the Wisconsin Sales Tax. The current Wisconsin Sales Tax rate is 5% of the total gross receipts from the rental of accommodations. This tax is collected in addition to the Racine Room Tax, resulting in a combined tax rate of 11% for short-term rentals in Racine.

Property owners must register with the Wisconsin Department of Revenue to obtain a seller's permit before collecting and remitting the Wisconsin Sales Tax. The sales tax is reported and paid to the state on a quarterly basis, following the same reporting periods as the Racine Room Tax.

Failure to collect and remit the required taxes can result in penalties, interest charges, and legal action. The City of Racine and the Wisconsin Department of Revenue may audit short-term rental operators to ensure compliance with tax regulations.

It's crucial for property owners to maintain accurate records of their short-term rental income and tax collections to ensure proper reporting and payment of taxes. Some short-term rental booking platforms may collect and remit taxes on behalf of the property owner. However, it is ultimately the property owner's responsibility to ensure that all required taxes are collected and remitted accurately and on time.

Wisconsin Wide Short-Term Rental Rules

In addition to the specific regulations the City of Racine sets, short-term rental operators in Wisconsin must also comply with state-level rules and requirements. These statewide regulations are designed to ensure a consistent and safe experience for guests while also protecting the rights of property owners and local communities.

One of Wisconsin's key statewide requirements for short-term rentals is the need for a Tourist Rooming House License. This license, issued by the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP), is mandatory for any property owner who wishes to rent out their property for periods of less than 30 consecutive days.

To obtain a Tourist Rooming House License, property owners must submit an application to the DATCP, along with the required fee. The application process includes a safety inspection of the property to ensure that it meets all necessary health and safety standards, such as proper fire safety measures, adequate lighting and ventilation, and safe drinking water.

In addition to the licensing requirement, Wisconsin short-term rental operators must also adhere to statewide health and safety regulations. These include:

1. Providing guests with clean and sanitary accommodations
2. Ensuring that all bedding, linens, and towels are properly laundered between guests
3. Maintaining a safe and hazard-free environment, including properly functioning smoke detectors and carbon monoxide detectors
4. Complying with all local building and zoning codes

Furthermore, Wisconsin short-term rental operators must collect and remit state sales tax on their rental income. The current state sales tax rate is 5%, which must be collected from guests and remitted to the Wisconsin Department of Revenue on a quarterly basis.

It's important for short-term rental operators in Racine and throughout Wisconsin to stay informed about both local and state-level regulations to ensure full compliance and avoid potential penalties. By adhering to these statewide rules and Racine's specific requirements, property owners can operate successful and legally compliant short-term rental businesses while contributing to the state's thriving tourism industry.

Does Racine Strictly Enforce STR Rules?

Based on discussions from real estate investing forums like Bigger Pockets and Reddit, it appears that the City of Racine does actively enforce its short-term rental regulations. Compared to some other cities in Wisconsin, Racine is less Airbnb-friendly due to its permitting requirements, inspections, and the fact that short-term rentals must be operated out of the host's primary residence.

While some hosts may attempt to fly under the radar and operate STRs without obtaining the proper permits, the general consensus among experienced investors is that it's not worth the risk. The city has mechanisms in place, such as the requirement for hosts to register with the Wisconsin Department of Agriculture, Trade and Consumer Protection and obtain a tourist rooming house license, which makes it easier for them to identify and crack down on non-compliant rentals.

Moreover, the steep fines and potential legal consequences associated with operating an unlicensed short-term rental serve as strong deterrents for most hosts. The majority of successful Airbnb operators in Racine are likely playing by the rules and have gone through the proper channels to obtain their permits and licenses.

In summary, while a handful of hosts may be skirting the regulations, Racine's enforcement mechanisms and the risks involved make it an unfriendly market for STRs compared to other cities with more relaxed policies. Hosts looking to operate short-term rentals in Racine should be prepared to follow all the city's requirements to the letter or consider investing elsewhere.

How to Start a Short-Term Rental Business in Racine

If you're interested in starting a short-term rental business in Racine, Wisconsin, follow these steps to ensure compliance with local regulations and set yourself up for success:

1. Research and understand Racine's short-term rental regulations, including zoning restrictions, permit requirements, occupancy limits, parking requirements, and noise restrictions.
2. Determine if your property is eligible for use as a short-term rental. In Racine, short-term rentals are allowed in residential and commercial zoning districts, subject to certain requirements and restrictions.
3. Prepare your property for short-term rental use. This may include furnishing the space, providing essential amenities, and ensuring the property meets all health and safety standards, such as having working smoke detectors, carbon monoxide detectors, and fire extinguishers.
4. Apply for a tourist rooming house license from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). This license is required for all short-term rentals in Wisconsin, and the application process includes a property safety inspection.
5. Obtain a short-term rental permit from the City of Racine's Department of City Development. Submit the required documents, including a completed application form, proof of ownership or lease agreement, a property floor plan, a completed self-inspection checklist, proof of insurance, and payment of the $100 annual license fee.
6. Register with the Wisconsin Department of Revenue to obtain a seller's permit for collecting and remitting state sales tax on your short-term rental income.
7. Set up a system for managing bookings, communicating with guests, and handling maintenance and cleaning between stays. Consider streamlining these processes using a short-term rental platform like Airbnb or Vrbo.
8. Develop a comprehensive rental agreement that outlines the terms and conditions of the rental, including the rental period, payment terms, house rules, and cancellation policy.
9. Implement a guest screening process to ensure the safety and security of your property and neighborhood. This may include requiring guests to provide identification, sign the rental agreement, and agree to follow house rules.
10. Market your short-term rental through various channels, such as listing platforms, social media, and local tourism websites. Provide high-quality photos, detailed descriptions, and accurate information about your property and its amenities.

By following these steps and adhering to Racine's short-term rental regulations, you can successfully launch and operate a compliant and profitable short-term rental business in the city.

Who to Contact in Racine about Short-Term Rental Regulations and Zoning?

For questions or concerns regarding short-term rental regulations and zoning in Racine, Wisconsin, property owners, and interested parties should contact the City of Racine's Department of City Development.

The Department of City Development is responsible for overseeing land use, zoning, and planning within the city, including the administration of tourist rooming house licenses and enforcement of related regulations.

To reach the Department of City Development, you can:

1. Call the department directly at (262) 636-9151. Staff members are available to answer questions and provide guidance on short-term rental requirements, the licensing process, and zoning restrictions.
2. Email the department at citydev@cityofracine.org. When emailing, be sure to include your name, property address, and a detailed description of your question or concern. A staff member will respond to your inquiry as soon as possible.
3. Visit the Department of City Development in person at:
   City of Racine
   Department of City Development
   730 Washington Avenue, Room 102
   Racine, WI 53403
   Office hours are Monday through Friday from 8:00 a.m. to 4:30 p.m.

In addition to contacting the Department of City Development, property owners can also access information about short-term rental regulations and zoning on the City of Racine's website at www.cityofracine.org. The website provides access to the city's municipal code, zoning ordinances, and tourist rooming house license application materials.

Property owners can ensure compliance with Racine's short-term rental rules and maintain a successful and legally operating rental business by working closely with the Department of City Development and staying informed about local regulations.

What Do Airbnb Hosts in Racine on Reddit and Bigger Pockets Think about Local Regulations?

Airbnb hosts in Racine have shared their thoughts and experiences regarding local short-term rental regulations on various online forums, such as Reddit and Bigger Pockets. Here are a few notable examples:

A Reddit user posted, stating that while the permit process in Racine can be time-consuming, the city's regulations are generally fair and manageable. They mentioned that the city's staff was helpful in guiding them through the application process and answering any questions they had.

In a thread on the Bigger Pockets forum titled "Racine, WI Short-Term Rental Regulations," a user shared their experience operating an Airbnb in Racine. They noted that the city's occupancy limits and parking requirements can be challenging for larger properties but emphasized the importance of complying with all regulations to avoid potential fines or permit revocation.

Another Bigger Pockets user commented that while Racine's short-term rental regulations are more stringent than some neighboring cities, they believe the rules help maintain the quality of life for residents and ensure a level playing field for all hosts. They appreciated the city's efforts to balance the needs of both short-term rental operators and the community as a whole.

On Reddit, a user shared their frustration with the city's requirement to renew short-term rental permits every two years, stating that it creates additional administrative work and expenses for hosts. However, they also acknowledged that the renewal process helps the city maintain oversight and ensures that all short-term rentals continue to meet the necessary standards.

Overall, while Airbnb hosts in Racine may have varying opinions on specific aspects of the city's short-term rental regulations, there seems to be a general consensus that compliance is essential for the success and longevity of their businesses. Many hosts appreciate the city's efforts to create a clear and comprehensive regulatory framework, even if navigating the permit process and adhering to all requirements can be challenging at times.