Zoning and Property Rights-Rental Restrictions

WI Court of Appeals – District III

Case Name: Hunter Clinton v. Village of Sister Bay

Case No.: 2025AP001825

Officials: Stark, P.J.

Focus: Zoning and Property Rights-Rental Restrictions

Several property owners in Sister Bay owned homes with five or more bedrooms that they either already rented as short-term rentals or had built with the intent to rent. After the Village amended its zoning code to prohibit short-term rental guests from using more than four bedrooms without Plan Commission approval, the owners sued, arguing the restriction violated state law. The circuit court granted summary judgment to the Village.

The Court of Appeals focused only on whether the four-bedroom limit conflicted with § 66.1014. The statute prohibits municipalities from enacting ordinances that prohibit the rental of a “residential dwelling,” which includes “any building, structure, or part of the building or structure” used or intended as a home, residence, or sleeping place. Relying on prior precedent, the court concluded that the Village’s ordinance functioned as a partial prohibition on renting portions of otherwise lawful residential dwellings by preventing owners from renting additional bedrooms in their homes.

The court rejected the Village’s argument that the restriction was merely a reasonable regulation rather than a prohibition, explaining that the statute protects rental of entire residential dwellings, including individual parts of those dwellings. The court remanded with instructions to declare the four-bedroom limit preempted and unenforceable.

Reversed and Remanded.

Decided 07/14/26

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