Short-Term Rentals in Door County, Wisconsin

Three layers of approval, not one

Operating a legal short-term rental (generally, a stay of fewer than 30 consecutive days) on a Door County property typically requires three separate approvals, not one. First, the state: Wisconsin law (Wis. Stat. sec. 97.605) requires anyone who rents a residence short-term for more than 10 nights in a year to hold a Tourist Rooming House license from the Department of Agriculture, Trade and Consumer Protection (DATCP), which generally requires a property inspection. Second, the county: the Door County Tourism Zone Commission (DCTZC) issues its own countywide lodging permit, which is what actually allows a property to collect and remit room tax -- STR hosts must file monthly room-tax reports so revenue is properly allocated among the county's municipalities. Third, the local municipality: many of Door County's towns, villages, and the City of Sturgeon Bay layer their own separate STR permit or licensing ordinance on top of both of the above, often with its own annual fee, occupancy limits, or zoning-district restrictions -- and a property inside the City of Sturgeon Bay specifically needs both the county Tourism Zone Commission permit and a separate city permit.

Because these three layers are administered by three different bodies, it's entirely possible for a property to be legal at one level and not another -- for instance, DATCP-licensed and DCTZC-permitted but sitting in a zoning district where the local municipality doesn't allow short-term rental use at all. Before assuming a specific property can be rented short-term, confirm its status at all three levels, not just one.

Wisconsin's "right to rent" law sets a floor -- but doesn't stop local rules entirely

A 2017 Wisconsin state budget provision (part of Wis. Stat. sec. 66.0615) was written specifically to limit how far a city, village, town, or county can go in restricting short-term rentals, after a wave of Wisconsin communities had moved to ban rentals under 30 days entirely. Under this law, a municipality generally cannot prohibit rentals of 7 consecutive days or longer, though it retains meaningful authority to regulate shorter stays and to impose conditions -- including capping the total number of days per year a property may be rented (as long as that cap is 180 days or more for rental periods of 6-28 days at a time).

This state floor is why Door County's individual municipal STR ordinances vary in what they can and can't restrict -- a bedroom cap, an occupancy limit, or a permit-fee structure is generally permissible under the law's remaining local authority, but an outright ban on rentals of a week or longer, or a rule that effectively achieves the same result, runs into the statute's protections. That distinction is exactly what's being tested in the active Door County litigation described below.

The Sister Bay bedroom-cap lawsuit: a live example of where the line sits

The Village of Sister Bay adopted a short-term-rental ordinance limiting rentals to a maximum of four bedrooms without special plan-commission approval, restricting where guests could sleep (no futons or pull-out couches in excess rooms), and capping total occupancy at 12 people -- with the village citing overcrowding concerns as the rationale, and fines running $500 to $5,000 per day for violations. The Wisconsin Institute for Law & Liberty (WILL), a conservative public-interest law firm, sued the village on behalf of several property owners who had rentals or building contracts predating the ordinance and whose homes have more than four bedrooms, arguing the rule violates the state's "right to rent" law, is arbitrary, and cannot be retroactively applied to existing properties.

Door County Circuit Court denied Sister Bay's motion to dismiss in March 2025, allowing the case to proceed, and a related June 2025 ruling found a specific rental (Captains Cottage LLC) had been wrongfully denied an STR license by the village. As of this research pass, the broader case was still active rather than fully resolved. The practical lesson for a buyer: a Door County municipality's STR ordinance is not necessarily the final word on what's permissible, and a property with more than four bedrooms in Sister Bay specifically sits inside a live legal dispute over exactly this kind of restriction -- worth asking about directly if you're evaluating a larger home there with short-term rental income in mind.

What to actually do before buying for short-term rental use

1. Confirm the property's specific town, village, or city (Door County has both towns and same-named incorporated villages, e.g. Town of Egg Harbor vs. Village of Egg Harbor -- these are legally distinct with potentially different rules) and ask that municipality directly whether short-term rental use is permitted in its zoning district, and under what conditions (bedroom/occupancy caps, minimum stay, permit fees).
2. Separately confirm the Door County Tourism Zone Commission permit and room-tax registration requirements, since this is required in addition to (not instead of) any municipal permit.
3. Confirm whether the property already holds, or will need to obtain, a DATCP Tourist Rooming House license, which typically requires a property inspection and is a separate state-level requirement from both the county and municipal permits.
4. If evaluating a larger home (five-plus bedrooms) specifically in Sister Bay, ask directly about the status of the WILL v. Sister Bay litigation and whether the property is covered by any interim relief granted in that case.
5. Don't assume an existing rental history or "grandfathered" status survives a change in ownership -- confirm directly with the relevant municipality and the Tourism Zone Commission whether a permit transfers with the property or must be reapplied for.