DecorahNews.com Community Conversation Series: Housing challenges in and around Decorah, Part One: Short-term rentals

Editor's note: This is the first in a three-part series reporting on the housing challenges in and around Decorah based on the Community Conversation held Thursday, Oct. 19, 2023. Part One: Short-term Rentals, published Wednesday, Oct. 25, 2023. Part Two: Affordability and Accessibility, including long-term rentals, will be published on Friday, Oct. 27, 2023 and Part Three: Solutions and Innovation will be published on Monday, Oct. 30, 2023. In the first Community Conversation hosted by DecorahNews.com on Thursday, Oct. 19, at Pulpit Rock Brewing Co, in Decorah, Iowa, four expert panelists addressed housing challenges in and around Decorah with an audience of nearly 50 concerned community members. The main topics included Airbnbs and other short-term rentals, the seeming scarcity of long-term rentals, affordability and quality of those that are available and affordability of housing generally. Audience members and panelists also discussed potential solutions for the current housing challenges. The panelists were asked questions by DecorahNews.com owner and publisher Lon Haenel. The questions were selected from those submitted by audience members, the panelists and the broader public prior to the event. The questions ranged from "what would you say is the greatest housing challenge facing our community?" to "what is the impact of short-term rentals on the housing market?" and "what innovations in housing could improve current challenges or affordability?" One of the greatest challenges facing our community discussed during the conversation was challenges associated with short-term rentals, specifically the need to balance short-term rental availability to support the tourism industry with the very real need for affordable homes for individuals and families to purchase or rent long-term. Audience members expressed their frustrations with short-term rentals, particularly the feeling that they were taking affordable houses off the market for individuals or families who are looking to move to Decorah or are already living here and looking to rent or buy homes. Senior Mortgage Lender and Vice President at Decorah Bank and Trust Mike Huinker set the tone for the short-term rental conversation. He addressed the audience's frustrations and commented on how the best things about our community–its scenic beauty, arts and culture, brew pubs and outdoor activities, everything residents love about Decorah–are also big draws for tourists and that the demand for short-term rentals is high, resulting in both benefits and drawbacks for the community. "People love the Driftless region. It's scenic, it's beautiful. It's where I want to be," Huinker said. "Decorah keeps making it on these top national best small towns lists. WorldAtlas says it is 'the best small town in Iowa to chill out in.' And then the Smithsonian says that Decorah is one of the 20 best small towns to visit in the United States. [...] We make these lists and this demand for Airbnbs [increases], which is a problem. [Airbnbs] are consuming a lot of space where people actually could reside, but now it's being allocated to people who are visiting, which is also very important. If you're a restaurant owner or an owner of many businesses, wouldn't you want that? It's a lot of new economic resources coming our way." Regulations City of Decorah Manager Travis Goedken discussed challenges related to how state regulations affect the City's ability to regulate short-term rentals. According to Goedken, one of the most frequent questions he gets from residents is some version of "why isn't the City doing something about Airbnbs or regulating them?" Goedken's answer is straightforward: the City can't. Goedken explained that state legislation severely restricts cities from regulating AirBnbs and other short-term rentals. "The short answer is, it's going to take an act of Congress in the state legislature," Goedken said. "Back in 2018, there was legislation adopted that actually prohibits cities from enacting any ordinance, resolution, regulation of any kind on short-term rental units [...] except for life safety issues [Iowa Code Chapter 414.1, subsection b]. So we can regulate that you can't run a strip club out of it or sell drugs, but that's about the extent of it." "So quite frankly, for the City to put some kind of moratorium out there, or you know, we've had requests to limit the ownership of Airbnbs to in-town residents and we receive requests all the time to limit the number of Airbnbs an individual can own," Goedken continued. "We simply can't do that. [...] So as long as they're for residential use, we have to allow them to be an Airbnb [or other short-term rental]." Goedken noted, though, that there has been some movement recently at the state level to allow small towns to regulate short-term rentals based on population. "There is some momentum now in Des Moines to allow some [regulations]," Goedgen said. "We're not being told what those changes might be. But we're being told it will be based on population. I'm hoping that number is more than 10,000, or at least 10,000, then we could get some restrictions [in place]." Benefits of short-term rentals Associate Broker at Harman Realty Elise Skellenger spoke up with a "little bit of a defense" of Airbnbs and short-term rentals. "I think that we talked about supply and demand. And there is a reason why Airbnbs are popular here because there is a demand," Skellenger said. "And if that demand went away, then those people are going to sell their Airbnbs and that housing stock goes back into circulation. And now that that housing stock is back in circulation, those Airbnb owners have spent time and money fixing up those places. They are not the dilapidated houses that they were when these Airbnb owners took them over. So [...] they've helped improve some of our housing that still could end up being low-income housing for first-time homebuyers. "The other benefit and why people a lot of times will pick short-term over long-term is they can make more money, they can see their property more often," Skellenger added. "And they have a little bit more control over who they are renting to. So there are some benefits and I'm not 100% Pro short-term rental I have long-term rentals myself. So my realtor heart wants to see more long-term rentals. But there is a reason that we do see." Goedken agreed that there are some benefits, especially economic benefits, for the city from short-term rentals. One such benefit of AirBnbs is the income generated through the Hotel/Motel Tax. Goedken said that in 2022, AirBnb made it an official company policy to charge taxes for guests who book Airbnb listings in the state of Iowa. Since then, the City has received Hotel/Motel tax revenue from AirBnB of approximately $125,000. "It's all about balance with the commercial businesses that do thrive on tourism," Goedken said. "And on the city side, too, it's a balancing act of Hotel/Motel Tax as well." Next steps The bottom line, according to Goedken, is that the City's hands are tied. However, community members have options, especially if they would like the City to be able to have more control over short-term rentals in and around Decorah. "Contact your [state] legislators, if that's what you would like to see," Goedken said. Community Conversation Series: Housing challenges in and around Decorah, Part Two: Affordability and Accessibility forthcoming on Friday, Oct. 27, 2023 will discuss long-term rentals and additional affordable housing options and programs. Community Conversation Series: Housing challenges in and around Decorah, Part Three: Solutions and Innovation forthcoming on Monday, Oct. 30, 2023, will discuss alternative options presented by panelists to solve some of the community challenges.