St. Paul and Minneapolis consider regulations on short-term rentals like Airbnb

April 28--Strangers occupy Doug Beasley's retreat-like home, tucked in St. Paul's northwest corner, for much of the year.

"I love my neighborhood and I love being able to share that with other people," said the photographer, who uses Airbnb to rent his St. Anthony Park house when he's traveling the world for work or staying at his cabin.

Hundreds of Twin Cities residents use online companies like Airbnb and VRBO to temporarily fill spare rooms or empty homes. These "hosts" have been renting spaces for years without city regulations. That is about to change.

St. Paul and Minneapolis are studying rental rules and want to ensure hosts pay taxes and meet safety guidelines. The expected flood of visitors to Minnesota during next year's Super Bowl creates a deadline for cities to establish regulations.

"We want to make sure that we are facilitating tourism and doing it in a good way," said Donna Drummond, St. Paul's planning director.

St. Paul's proposed rules would limit the number of people allowed to stay in a home and how many apartments or condominiums people could rent out in a building. Property owners would have to follow zoning and licensing rules, pay sales and lodging taxes, have appropriate insurance and, in some cases, a fire certificate of occupancy.

Minneapolis staff plans to present regulations to council members within a few months, Deputy City Coordinator Nuria Rivera-Vandermyde said. They have been meeting with St. Paul staff and are looking at similar issues, like tax payment and neighborhood nuisance concerns, she said.

Some Airbnb hosts are confused by St. Paul's planned limits on rental units, company spokesman Ben Breit said.

"We appreciate the hard work of city policymakers to get to this point, though our St. Paul hosts have concerns with some of the cumbersome requirements of this draft legislation," Breit said, and the company will continue to work with the city on the regulations.

Other Minnesota cities have even more stringent rules on short-term rentals.

Eagan doesn't allow them when the property owners are not present and Burnsville prohibits short-term rentals in residential areas. Duluth requires hosts to get $650 or $100 annual permits, depending on whether they are renting out their full property or just a room.

St. Paul would make hosts pay an annual license fee. The city hasn't determined the cost but doesn't want it to be a hindrance to people, Department of Safety and Inspections Deputy Director Dan Niziolek said.

Booking services, like Expedia and Airbnb would have to give St. Paul information about the hosts, and the city would audit a sampling of property owners for compliance, he said. The companies would have to remove hosts' listings if they refuse to comply with the rules.

St. Paul does not license or permit the rentals, so they are technically illegal, but the city hasn't been shutting them down.

The City Council created a work group last year to study short-term rentals and come up with rules. They found that not many people were complaining about the rental properties, St. Paul Senior City Planner Kady Dadlez said, so the city staff is trying to keep the regulations minimal.

Weighing pros and cons

St. Paul's proposed rules would be a big change, Beasley said, but not necessarily a bad or an unfamiliar one. He also rents out his cabin, and even the small Wisconsin town where it's located has regulations.

The change would put short-term rentals on a more level playing field with hotels and traditional bed-and-breakfast owners, he said.

"I can understand the concern from the hospitality interest in Airbnbs, because there are so many things we don't have to do and regulations we don't have to comply with that they do," Beasley said.

At a recent Planning Commission meeting, Dadlez listed pros and cons of the rentals, noting that they add income for residents and support tourism. They also can contribute to late-night noise, crime, litter and take up on-street parking, she said.

Those concerns are overstated, Commissioner Bill Lindeke said, and the Airbnb in his neighborhood is a boon that adds eyes on the street. Commissioner Terri Thao said the possibility that affordable housing is turned into short-term rentals is "extremely concerning" and could compound the already tight rental market.

The Planning Commission has not yet voted on the rules and will hold a public hearing on them June 2. The St. Paul City Council and mayor will likely consider them late this summer or early fall.

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