Airbnbs aren't major cause of Fox Valley's housing market issues, but concerns linger

Appleton is keeping an eye on how many tourist rooming houses operate in the city, but has yet to see short-term rentals affect the supply of homes for residents.

Although there's been more Airbnb-type properties licensed in recent years, "we're not seeing the number of tourist rooming houses that, say, a community like Ashwaubenon or the neighborhoods around Lambeau Field might experience," said Kara Homan, Appleton's director of community and economic development.

Still, she said, it's something to monitor going forward.

Among its neighbors, Appleton is home to the most short-term rentals. It's difficult to pin down exactly how many, but there are likely more listings than there are licensed.

The Post-Crescent identified about 120 properties in the Fox Cities in late 2023, by compiling data from state and local agencies. Meanwhile, Pam Seidl, executive director of the Fox Cities Convention and Visitors Bureau, estimated there are probably between 300 and 500 listings for the area in any given month.

The Post-Crescent is looking at Airbnb-type properties in context of the local housing market, as part of a series focused on short-term rentals in the region. Previous stories explored Appleton's response and Neenah's permit system, among other topics.

Articles in the coming weeks will delve into other issues, including how other municipalities handle short-term rentals, and who's responsible for licensing them.

Short-term rentals can be a 'distraction' in debate around housing issues

Although there are early signs of relief, Wisconsin homebuyers have faced a tough market in recent years, as demand outpaced supply, with high interest rates.

"There are quite a number of contributing factors that have got us to where we are today," in the Fox Valley, according to Jennifer Sunstrom, director of public relations and government affairs for the Realtors Association of Northeast Wisconsin.

The biggest issue, she said, is supply, especially as new housing units have been significantly underproduced over the years. There's also an increase in the cost of building materials, a decline in available labor and changing interest rates.

"When you take all of, I would say, the top five, six to 10 issues ... that have contributed to the housing situation, short-term rentals don’t even get on the radar," according to Sunstrom.

She added, "if we eliminated short-term rentals tomorrow, no one would notice. It would not create ... this enormous increase in available supply in the market, and the people are like, 'Oh, well that really helped.' It just wouldn't."

"Now, does it help having short-term rentals? Well, no," Sunstrom said. But she stressed that short-term rentals should not become "a distraction from what the real issues are, and what we need to do about it." Rather, she said, the focus should be on the local level, changing development and land use policies to increase density and variety of homes, among other factors.

More: Wisconsin home inspectors, once a staple of property sales, report rollercoaster of demand

Still, housing market concerns linger

There are communities around the state where "housing shortages are really, seriously affecting business," according to Bill Elliott, president and CEO of the the Wisconsin Hotel and Lodging Association.

"So, there's concern that short-term rentals are eating up the housing market for employees, not just of our industry," Elliott said, "but of a broad swath of industries."

Appleton and the surrounding area need more housing to keep up with a growing population, for households of all incomes, according to a 2022 Fox Cities and Greater Outagamie County Regional Housing Strategy report.

"If I'm an employer here in the Fox Cities, and I'm trying to attract a new employee here, and they can’t find a place to live, that’s a problem," said Seidl, with the local Convention and Visitors Bureau. "And if someone’s taking that home off the market to rent out on just a rotating basis, instead of just selling it for someone to live in, it plays into a little bit of that housing stock issue, as well."

Alex Schultz serves on the Appleton Common Council, and this topic "continues to be challenging for a city of our size," he said, "to balance short-term rental home purchases with affordable low-income housing opportunities."

Schultz also operates a short-term rental in the city with his wife; the couple live right next door, he said.

"We understand what it means to take a home out of the market for family ownership," he said, "but we balance that knowing that we are adding value to our community by sharing this historic house and promoting local businesses with our appreciative guests."

Schultz argues there's an important distinction with short-term rental owners, like him and his wife, "who live in close proximity to the homes they're renting," whether they live in the house themselves, next door or on the same block.

"They are vested in to neighborhoods and relationships with neighbors," he said. "That connection is lacking with someone who owns or manages multiple properties around the city, and the owners themselves are not really present."

Is Appleton reaching a saturation point?

Mark Biesack lives in Appleton, and he manages about 100 short-term rentals around Wisconsin, including about 40 in the Appleton area, through his company, Powerhouse Properties 920. His team works closely with city inspectors, he said, and they introduce themselves to neighbors to let them know they're only a phone call or text away.

People create short-term rentals for a variety of reasons, according to Biesack. He's had homeowners from the area rent out their property, but still use it once in a while when they come back to visit family and friends. Or, he said, people may want to rent out a house they've outgrown, he said, and they find it more appealing to be an Airbnb host than a traditional landlord.

When looking at the effects that short-term rentals have on communities, Biesack argues it's important to put numbers in context. For instance, the Appleton Health Department recorded 82 licensed tourist rooming houses in late 2023. Meanwhile, the city has roughly 31,000 total housing units, according to U.S. Census Bureau data.

Generally, it's hard to say whether there's been an increase in Airbnb-type properties in the Fox Cities, or if municipalities are just aware of more now, as more listings get licensed. Still, Biesack thinks that Appleton is right around, while Green Bay is already past, a saturation point for short-term rentals, he said.

"What I'm starting to see," Biesack said, "is that people who were maybe not fully committed to this, or wanting to just give it a try, are now realizing, 'You know what? The housing market’s still really good. I could still just ... list this house and get a really good price for it if I sell.'"

Biesack said he's had a couple of properties in his portfolio do that. He's also seen former Airbnbs listed for sale convert back into single-family homes, through the "ebb and flow," he said.

"Honestly," Biesack said, "if an investor came to me and said, 'Hey, I want to buy a house in the area for when I come back twice a year. I have $250,000. Where should I buy one?' Unless they’re really dead set on Appleton or Green Bay, I'm probably going to tell them to go spend their money in Oshkosh or somewhere else," like Stevens Point or the Plover area.

Editor's note: This article is part of a series about short-term rentals in the Fox Cities that will publish in the coming weeks. Do you have experience with such rentals, either as an owner, customer or neighbor, that you'd like to share? The Post-Crescent wants to hear from you.

Reach Becky Jacobs at bjacobs@gannett.com or 920-993-7117. Follow her on Twitter at @ruthyjacobs.

This article originally appeared on Appleton Post-Crescent: Fox Valley balances short-term rentals with tough housing market