Council reviews draft short-term rental ordinance; consensus on capacity, lighting rules to be reworked

Two Rivers city council members and staff spent the Feb. 24 work session reviewing a draft omnibus amendment to the city's short-term rental (STR) ordinance, including a proposed capacity definition, new outdoor lighting restrictions, licensing and penalty provisions, and quarterly guest-register reporting.

City Attorney Andrew Adams told the council the draft defines "maximum capacity" as "two individuals for every bedroom plus four" for residential dwelling units offered as short-term rentals. Adams said the definition is limited to units offered as STRs and would not apply to ordinary single-family households. "We added the term maximum capacity... 2 individuals for every bedroom plus 4," he said.

Council members discussed how to treat young children in the capacity calculation. Councilors signaled consensus that children under age 2 would not count toward the stated capacity.

The draft also adds an outdoor-lighting restriction specific to licensed STRs. The proposal would require shielding and direct lighting to remain on the property, prohibit certain decorative bare-bulb fixtures and require outdoor lighting not to be continuously illuminated between 11 p.m. and 6 a.m. Council members said they wanted the lighting language narrowed to avoid unintended consequences for routine porch or security lighting, flag illumination, or landscape "wash" lighting.

After extended discussion, councilors asked staff and the city attorney to reframe the lighting rules to focus on nuisance or trespass effects rather than exhaustive technical specifications. Adams noted that attempting to list every fixture type or lumen limit could be impractical; he recommended exploring nuisance-based language that targets lighting that "is a nuisance to neighbors" or that constitutes trespass across property lines.

On licensing and enforcement, the draft would prevent an applicant whose license was suspended, revoked or not renewed from reapplying immediately. The ordinance text under review limits when a license may be reapplied for; staff explained the current draft would require at least a one-year waiting period and that, depending on the calendar date of a nonrenewal, the next eligible application date could be more than a single calendar year later.

The draft would also require STR operators to keep a guest register (physically or electronically) and to provide the portion reflecting the most recent calendar quarter to the city within one month of quarter end so the register can be compared to room tax filings. Councilors discussed that the city cannot force online platforms to provide marketplace-level data and that the register requirement is intended to help reconcile room tax remittances with owner-reported revenue.

No formal ordinance vote was taken at the work session. Councilors directed staff to revise the draft: incorporate the council's capacity consensus (two per bedroom plus four; children under 2 excluded), rework the lighting provisions toward nuisance-based language, add posting requirements (display of license, capacity and a summary of the noise ordinance), keep the guest-register/quarterly reporting requirement, and refer the zoning-code amendment portion of the draft (section 8) to the Plan Commission for advisory review and a public hearing.

Staff said the zoning-code amendment would need Plan Commission review and a formal public hearing; the council asked staff to place the zoning referral on the Plan Commission agenda for March 10 and to return a revised ordinance to the council on the next Monday agenda for further direction.

The work-session discussion repeatedly emphasized that the session was for guidance and not a final action; staff and the city attorney will return a revised draft incorporating the council's direction.