Legislative Committee meets to discuss registering rental properties

By Karen Cornelius

After Vermilion City Council met on Monday, October 23, the Legislative Committee held a special meeting to discuss one topic, rental registration. Council passed an ordinance to require all rental property owners to register with the city, but questions came up about people renting their homes or rooms over the internet for short stays as well as other owners of rentals who are not registering.


Legislative chair Frank Loucka stated that these transient rentals over the internet were causing some problems in residential neighborhoods and if the ordinance should apply to them for registration. Councilwoman Barb Brady said these vacation-type internet rentals are really a business and they are earning income and not paying taxes. She asked how the city should classify them and if they are even allowed in residential areas. Law director Ken Stumphauzer responded by asking if the city’s ordinance included rentals by the day or week. If not, he said they could put regulations in place to control them.


Council president Steve Herron said his issue was telling the administration to look for them and identify them when they have limited hours in the building department to do this. Brady said the city has a bed tax and they should be collecting it from these rentals and they should be registered. Other cities have inspections such as fire for smoke detectors. She pointed out the city ordinance has a $100 per day penalty for rental properties that are not registered. Brady did talk to the building inspector and there is a suggested moratorium to give people a chance to register by December 31. She said the city could put this notice in the water bills. If they do not register, she advocated a big fine in January, $5,000.


Mayor Eileen Bulan thought a lot of people don’t even read their water bills. Herron thought it was a matter of enforcement. Brady said the building department is not going to knock on doors, the city just has to notify the public they have to register rentals. She said there is a form to fill out. Chairman Loucka suggested sending out letters giving rental owners 30 days to comply.


Law director Ken Stumphauzer asked council to give him time to look at the ordinance and the problems and see if there is another way to handle the situation without being extreme. Councilman Fred Ostrander asked how many property owners who rent have registered. Service director Tony Valerius said under 50. Councilman Jim Forthofer stated that the city has around 5,000 homes and 75 percent are owned so the rest must be rentals. Council-at-large Monica Stark asked if the city does collect a bed tax. Finance director Brian Keller said they collect 3 percent or $1,400 per year.


From the audience, John Gabriel who will represent Ward I next year said it appeared to him they were talking about three different things. One was the commercial B&B’s who pay taxes. The second was the air B&B’s or temporary internet rentals, and the third was the long-term neighborhood rentals. He said council needs to make a distinction. He said this registration will blindside a lot of people who really don’t know about it. He told council they are operating in a vacuum and are not communicating with the public. He advised they need input and should slow down and send the topic through to committees and do it right.
Legislative chairman Loucka said they would wait for the law director to advise them at a later committee meeting.


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