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CITY COUNCIL

DATE: December 1, 2016

TO: Mayor & Council Members

TOPIC: Short Term Home Rentals

FROM: Bill Turnblad, Community Development Director

INRODUCTION

In August of this year the City Council approved a contract with Hoisington Koegler
Group, Inc. (HKGi) to assist the City with a study on short term home rentals (STHR).
That study is now complete and ready for City Council consideration at the December
6th work session.

STUDY CHRONOLOGY

September Consultant team reviews available literature; researches how


other Minnesota cities address STHR; develops and administers
community questionnaire
October Staff holds stakeholder meeting to review study materials and
discuss issues
November Consultant team finalizes draft of study report; Planning
Commission reviews study
December City Council review/work session

PURPOSE OF WORK SESSION

The purpose of the work session, to which the stakeholders group has been invited, is
to review the study, consider alternatives, and either:

1. Determine that the current prohibition on short term home rentals should
remain in place; or
2. Determine that allowing short term home rentals is desirable in Stillwater and
direct staff to develop a draft ordinance and hold public hearings before the
Planning Commission and City Council; or
3. Table the matter for more information.

Attachment: STHR study


Hoisington Koegler Group Inc.
Creating Places that Enrich Peoples Lives

TECHNICAL MEMORANDUM
TO: Mayor Ted Kozlowski and Members of the Stillwater City Council
Bill Turnblad, Community Development Director, City of Stillwater

FROM: Jeff Miller, AICP, Consulting Planner


Laura Chamberlain, AICP, Consulting Planner

DATE: November 30, 2016

SUBJECT: Short Term Home Rental Analysis and Ordinance Alternatives

BACKGROUND
The proliferation of short term home rentals (STHR) has increased in the last several years, thanks to
the popularity of online services and websites, such as Vacation Rental By Owner (VRBO) and AirBnB.
These sites allow individual property owners to rent out their houses, condominiums, individual
rooms, and vacation homes for these short term rental stays. Users of short term home rentals often
enjoy the neighborhood or residential feel of their accommodations, which is typically less in cost
than a traditional hotel or other lodging. The ability to rent out property for the short term also brings
the benefit of supplemental income to the homeowner. Some of the cost savings are due to the lack
of regulations, in the form of permits, zoning constraints, licenses, or taxes, which often apply to
lodging uses but not residential uses. Many cities around the nation and within Minnesota have begun
to look at regulations for short term home rentals.
The City of Stillwater decided to undertake a study of this issue in part due to complaints from
traditional bed and breakfast (B&B) owners. It can be difficult for B&B owners to compete with short
term home rentals because they do not have to meet the same regulations as B&Bs in Stillwater. There
have also been a few complaints about noise and parking issues from neighbors of short term home
rental properties in Stillwater.
In August of this year, the City Council selected Hoisington Koegler Group, Inc. (HKGi) to conduct a
study regarding Short Term Home Rentals (STHR). This technical memo provides a summary of HKGis
research of other cities approaches to STHRs, a summary of a community-wide questionnaire
regarding STHRs in Stillwater, a summary of input received at the Oct. 10th stakeholders meeting

Hoisington Koegler Group Inc.


123 North Third Street, Suite 100
Minneapolis, Minnesota 55401
(612) 338-0800 Fax (612) 338-6838 www.hkgi.com
Short Term Home Rentals Study November 30, 2016

focused on this topic, and a list of ordinance alternatives to consider as the City looks toward potential
next steps for addressing STHRs.

RESEARCH OF PEER CITIES


1) Some cities in Minnesota that have studied STHRs and decided to prohibit them in residential
zoning districts.
a) Burnsville, which cited the following reasons:
Vacation rentals bring strangers
People come and go at all times of the day and night
Customers are not residents, so they have no interest in maintaining the neighborhood
Noise
Trash
Transient nature of operation
b) Bloomington

c) Savage, which prohibited rental of homes in residential zones for any period less than 15
days and cited the following reasons:
Resident complaints
Commercial nature of the use in residential zones
2) Some cities in Minnesota that have decided to regulate STHRs.
a) Eagan
STHRs allowed in owner-occupied residential units
Allowed in accessory dwelling units if the stay is more than 30 days
b) Duluth
Developed separate STHR regulations for vacation homes vs. owner-occupied homes
Vacation dwelling units require an interim use permit, which expires after 6 years, and
has a number of requirements including annual licensing
Accessory home share also requires a permit, but it is an administrative permit which
is required annually

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Short Term Home Rentals Study November 30, 2016

Both are types of STHRs are allowed within all residential districts of the city
c) Prior Lake
Permitted with an annual permit and inspections
Owner and agent do not have to stay on premises during the stay, but they must be
available 24 hours a day, within 30 minutes, during the stay
Standards such as parking, number of occupants, and length of stay are determined by
site/building characteristics
3) Some cities in Minnesota that do not regulate STHRs.
a) Chanhassen
b) Chaska
c) Minneapolis
d) St. Louis Park
e) White Bear Lake
4) The City of Saint Paul recently conducted an extensive STHR study. Their findings for cities in
Minnesota have been attached as an exhibit. St. Paul is still considering the specific language
to use for an STHR ordinance, but they developed the following goals based on their study:
a) Develop a Zoning Code amendment to permit STHRs as an incidental transient occupancy
and develop standards related to owner-occupied and non-owner-occupied units.
b) Develop an ordinance amendment to fully regulate non-owner-occupied units for life
safety concerns through the Fire Certificate of Occupancy program.
c) Develop a mechanism to ensure tax collection is occurring, possibly via STHR host
platforms, e.g. VRBO and AirBnB.
d) Develop an ordinance amendment to license STHR host platforms, with specific
requirements relating to reporting and compliance.
e) Utilize complaints about STHRs to inform recommendations for future regulations.
f) Educate city staff (police, fire, and inspectors) about the presence of STHR uses in
neighborhoods and the potential for complaints

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Short Term Home Rentals Study November 30, 2016

COMMON ISSUES AMONG PEER CITIES


1) No definition of short term home rentals
2) Owner-occupied vs. non-owner-occupied rentals
3) Bring strangers into a neighborhood on a regular basis
4) Increased noise and activity in a neighborhood
5) Parking
6) Trash
7) May be seen as a commercial intrusion into residential neighborhoods
8) Buffering/screening for adjacent year-round residents
9) Not typically subject to licensing and inspections
10) Often do not pay local taxes as are required by B&Bs and hotels
11) Unfair competitive advantage
12) Affordable housing concerns, if affordable housing gets converted into STHRs

BEST PRACTICES/APPROACHES AMONG PEER CITIES


1) Define short term home rental in ordinance (distinguish from other lodging types)
2) Differentiate between owner-occupied and non-owner-occupied home rental uses
3) Consider a short term home rental permit program
4) Consider where and how they could be allowed, e.g. permitted vs. conditional vs. interim use
5) Establish specific standards for short term home rentals, such as:
a) Parking spaces quantity and location
b) Number of occupants
c) Minimum number of days for each stay
d) Inspection requirements
e) Tax collection requirements federal, state, local
f) Owner on-premises vs. owner off-premises

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Short Term Home Rentals Study November 30, 2016

STAKEHOLDER MEETING RESULTS


In order to get an in-depth perspective on different sides of this issue, city staff held a stakeholder
engagement session on October 10, 2016. Stakeholders in attendance included owners of traditional
B&Bs, people who currently operate STHRs out of their homes, Planning Commissioners, and other
stakeholders representing neighborhood groups.
Questions
At the meeting, stakeholders raised as many questions as comments. This high level of inquiry
indicates that it is beneficial that the city has decided to study this issue and is considering a range of
ordinance options.
Comments
1) Many stakeholders were concerned with the mechanics of having some type of lodging tax or
fee system for STHRs.
a) A lodging tax would be in the range of 3% (or less) added to the receipt and charged directly
to the guest/customer:
Sometimes the websites will coordinate the lodging tax or they will allow the host to
add it to their fees through the STHR websites
The City of Stillwater would need to consider how this tax is collected from hosts or the
STHR websites
b) Concerns that establishing a lodging tax would make the County Assessor re-categorize
properties from residential to commercial, thereby impacting the owners property taxes.
Avoiding this reclassification was very important to the meeting participants.
c) Questions of income taxes were also brought up:
Hosts that rent out their property for 14 collective days or less annually do not have to
pay income taxes on the income they make from the rental
15 days or more of rental needs to be reported on income taxes
d) There may be some distinction needed between homestead (owner-occupied) STHRs and
non-homestead (vacation home) STHRs.
2) Stakeholders also brought up concerns over the potential cost burden it would put on the City
of Stillwater to establish regulations and then to enforce them.
3) Participants also indicated that more lodging options are needed in the city.

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Short Term Home Rentals Study November 30, 2016

COMMUNITY QUESTIONNAIRE RESULTS


In order to get an idea of how the community-at-large feels about short term home rentals and their
possible regulation, HKGi consultants worked with the city to develop a community questionnaire.
The questionnaire was available online for a period of two weeks in late September and early October
2016. Within that time period, 639 individuals responded to the questionnaire.

Q1: Do you think Stillwater's City Code should allow a


homeowner to rent out their home (house, condominium,
or room) for short term vacations or stays?
[622 respondents]

No 16.65%

Yes
No
Yes 83.44%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00%

Q2: Do you think a homeowner renting out their home (house,


condominium, or room) for short stays should be required to
live in the home to act as a host for the short term renters? Or
should a homeowner be allowed to live elsewhere while
renting out thei

91.52%

8.48%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00%

Homeowners required to live in the home during short term rental


Homeowner allowed to live elsewhere during short term rental

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Short Term Home Rentals Study November 30, 2016

Q3: Do you think short term home (house,


condominium, or room) rentals where a
homeowner is living in the home should be
regulated differently than short term ome
rentals where a homeowner lives elsewhere
during the short term rental?
[461 respondents]
80.00%
70.00%
72.89%
60.00%
50.00%
40.00%
30.00%
20.00% 27.11%
10.00%
0.00%
Yes, they should be regulated No, they should have the same
differently regulations

Q4: In which areas of Stillwater should short term home (house,


condominium, or room) rentals be allowed (select all that you find
appropriate):
[501 respondents]

City Wide 91.62%

Downtown Stillwater 39.72%

Multiple-Family Neighborhoods 31.34%

Single-Family Neighborhoods in Western Stillwater 31.94%

Single-Family Neighborhoods in Central Stillwater 33.13%

Historic Single-Family Neighborhoods 36.73%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

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Short Term Home Rentals Study November 30, 2016

Q5: Do you think short term home (house, condominium,


or room) rentals should be required to pay the 3% City
Lodging Tax currently required for bed & breakfasts,
hotels, and motels in Stillwater?
[498 respondents]
60.00%

50.00%

40.00%
Yes
30.00%
No

20.00% Taxed Differently

10.00%

0.00%
Yes No Taxed Differently

Q8: Please select any responses below that describle you


[495 respondents]
80.00%
70.00%
70.10%
60.00%
50.00%
52.53%
40.00%
38.18%
30.00%
20.00%
10.00% 7.88% 16.36% 7.07%
1.01% 12.12%
0.00%
I live in an I have rented I am I own a bed & I have stayed I have stayed I have a I have a
Historic out my home interested in breakfast in a bed & in a STR when vacation vacation
Neighborhood as a STR in the renting out breakfast travelling in home/cabin home/cabin
in Stillwater past my home as a when another city that I have that I am
STR in the travelling in rented out as interested in
future another city a STR in the renting out as
past a STR in the
future

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Short Term Home Rentals Study November 30, 2016

Findings
1) An overwhelming number of survey respondents (87.5%) want to allow STHRs in Stillwater.
2) Sites like AirBnB and VRBO have a very good reputation and people feel very positive about
using them; 70.36% of all respondents indicated that they have stayed at an STHR when
travelling.
3) Hand-in-hand with the allowance of STHRs, respondents were also in favor of reasonable
regulations and also some sort of taxation/fee set by the City of Stillwater.
4) In general, people seem more concerned about owners/hosts being close-by/accessible if
problems arise more than the specifics of whether or not the owner is on-premises during the
rental, or whether the house is homesteaded vs. a vacation home. Essentially, as long as the
owner/host is within a 30-minute drive of the property to address issues while the home is
being rented, it didnt really matter to respondents whether the home was owner-occupied or
not.
5) Of the respondents who want to allow STHRs in Stillwater, an overwhelming number of them
(91.25%) want them to be allowed city-wide.
6) Question #7 allowed people to list concerns if STHRs were allowed in their neighborhood:
a) Most of the concerns were over parking (82 respondents) and noise (86 respondents).
b) Concern over increased crime/the safety of neighbors was brought up by 40 respondents
c) 39 respondents felt that allowing STHRs would be positive for the city, and outweighed any
concerns about allowing them
d) Other concerns involved property maintenance, safety of guests (via fire
codes/inspections), and access/accountability of the owner
e) A handful of respondents raised concerns about rental properties in general and a few even
said that STHRs would be preferable to traditional long term renters in their neighborhood
7) Under Additional Thoughts (Question #8), 122 people responded that allowing STHRs would
be a positive thing for the city.
a) Many said that the citys tourism cannot be supported solely by traditional lodging:
Local lodging is either too expensive, too small for large groups, or too unavailable
(booked up)
A number of respondents mentioned they had visitors who stayed in Woodbury
because accommodations in Stillwater were so scarce

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Short Term Home Rentals Study November 30, 2016

b) Many respondents also said they felt that people should be able to use their property as
they please.
8) Fire code/ safety code/ building standards are a concern for respondents.
9) Various comments regarding ways that an ordinance or permitting process could further
restrict STHRs:
a) Limit total number of permits allowed in the city
b) Limit the number of guests
c) Revoke permits if too many complaints (three strikes policy)
d) Regulate length of stays (e.g. minimum of two days?)
e) Limit number of stays within a year
f) Notification to neighbors about STHRs
g) Inspections
h) Criminal background checks of guests

KEY CONSIDERATIONS FOR THE CITY IN DEVELOPING A POTENTIAL ORDINANCE


Should STHRs be considered a principal use, accessory use, or both?
Need to establish definitions in the Zoning Ordinance
In Duluth, if the owner is on-premises during the stay (renting out a room), then it is considered
an accessory use, only requiring administrative approval; if the owner is off-premises (renting
out their entire home, or entire vacation home), then it is considered a principal use and
requires an Interim Use Permit
The City of Stillwater should consider whether they want to distinguish between owner-
occupied home rentals vs. non-owner-occupied homes and vacation homes utilized for STHRs
How could the STHR use(s) be allowed?
Not allowed STHRs remain a prohibited use as is the case today
o Not recommended based on the number of existing STHRs today and the community
support for STHRs in Stillwater expressed in the questionnaire
Conditional Use
o Conditional Use Permit (CUP) runs with the property, so would be difficult to keep control
it when a property owner moves

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Short Term Home Rentals Study November 30, 2016

o Requires submission of an application to the City, a Public Hearing in front of the Planning
Commission (with notice to neighbors), and approval by the City Council
o Theoretically reviewed annually by the City Council, but difficult to keep tabs on
Interim Use
o Interim Use Permit (IUP) runs with the property, so can become complicated if sold
o Requires submission of an application to the City, a Public Hearing in front of the Planning
Commission (with notice to neighbors), and approval by the City Council
o Requires the establishment of a sunset date (cannot run in perpetuity)
Permitted Use outright (licensing not required)
o Could be processed through a zoning application (similar to a fence permit)
o Potentially could become difficult to enforce any additional standards (off-street parking
requirements, etc.)
Permitted Use but subject to licensing
o Approved administratively through the City (easier, quicker, and less costly for the
applicant)
o Could establish an STHR licensing program that includes an annual fee and inspection
schedule if desired
o Could build in a complaint clause (e.g. three strikes policy)
Where could the STHR use(s) be allowed?
Within all zoning districts
Only within residential zoning districts
Only within specific residential zoning districts, e.g. downtown neighborhoods
How could the City address taxation?
Different types of taxation could be considered:
o Income tax: if an owner rents out a property for more than 14 cumulative days in the year,
the earnings made from that rental must be reported on annual income taxes
o Property tax: based on the value of the property and use of the property, determined by
the County Assessor. The STHR use will not impact the use or value of the property
according to the County Assessor, so no change would be necessary

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Short Term Home Rentals Study November 30, 2016

o City lodging tax: a 3% lodging tax could be added to what is charged to the customer/guest
of any type of lodging establishment in Stillwater. The funds from the local lodging tax go
directly into a fund to promote Stillwater tourism and advertise lodging establishments
Options include:
o Charge local lodging tax on STHRs, same as traditional B&Bs (3%)
o Charge local lodging tax on STHRs, but different and less than traditional B&Bs (e.g. 1.5%)
o Remove local lodging tax from B&Bs and do not tax STHRs
o Charge STHR permit/licensing fees to cover city administrative costs of processing permits
and inspections, but do not charge an additional tax
o Do not tax STHR uses
What performance standards could be considered as potential requirements for the STHR use(s)?
Off-street parking minimum and location
Maximum number of guests
Maximum number of vacation stays/days per month or year
Types of required inspections
Screening, lighting, garbage
Requirement for owners to be on-premises or within a certain distance of STHR
Minimum lot size
Lodging tax applicability

Attachments: Appendix A Table 1: City of St Paul Study Summary


Appendix B Table 2: Peer City Research Table
Appendix B Stakeholder Meeting Comments

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City of Saint Paul Short Term Rental Study
Table 1 - Regulation of Short Term Rentals in Minnesota Cities

City How Currently Regulated Permit Fire & Length of Number of Parking Penalty
Safety Stay Guests Requirements
Allowed
Bloomington Short term rentals are prohibited

Burnsville Short term or vacation rental is


prohibited. An amendment to the
City Code Business Regulations was
adopted February 16, 2016 that
specifically restricts short term
home rentals within the city as a
business regulation.

Chanhassen Short term rentals are not


regulated

Chaska Short term rentals are not


regulated

Duluth Interim use permit to operate a Permit and Inspections required 2 to 29 days Depends upon Determined by the
vacation rental and a home share the number of number of
permit to rent out part of a home. inspections are bedrooms bedrooms
Regulations revised May 2016 required.

Eagan The city prohibits stays of less than Smoke detectors are Occupancy of the Two parking spaces
30 days unless guests reside within required in all accessory for the primary
the owner/tenant occupied unit. sleeping rooms and dwelling unit is residence and two
Carbon Monoxide limited to two spaces for the
STR is allowed for 30 days or more detectors are people. accessory dwelling
in an accessory dwelling unit that is required within 10 unit are required.
within or attached to a primary feet of sleeping
residence and either of the units is rooms in accessory
owner occupied. The unit must be dwelling units.
registered as an accessory dwelling
unit and cannot be larger than one
third the size of the primary
residence. Accessory dwelling units
must be registered with the city.

Minneapolis Short term rentals are not


regulated

Prior Lake Short term rentals are allowed by Permit and Hosts are limited Varies depending Off street parking Revocation of
an ordinance adopted in 2015 to five rentals upon the size of spaces equal in permit;
http://156.99.83.130/weblink8exter inspection are per month the lot and the number to the gross
nal/0/doc/437387/Page1.aspx
required. Ordinance size of the unit number of misdemeanor
adopted mid-2015. (children under bedrooms in the
three are not dwelling unit
Owners/tenants are included in the
not usually present. total number of
guests)

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City How Currently Regulated Permit Fire & Length of Number of Parking Penalty
Safety Stay Guests Requirements
Allowed
Rochester City does not regulate short term
rentals but has specific regulations
to allow for medical stay dwelling
units for patients and their families
that were enabled by state
legislation in 2015 which regulates
them as lodging establishments.
These units must have a license,
pass an inspection, and be properly
zoned.
Savage Bans rentals of homes in residential
zones for any period shorter than
15 days. Ban adopted December 7,
2015. Ban adopted due to
residents complaints, along with
the apparent commercial use of
properties in residential areas. (Info
is from an online article)
Stillwater Short term rentals are not Stays of less than 30
permitted in residential
neighborhoods. days are permitted in
central business
district and
commercial districts
with a CUP. No
specific conditions or
standards apply,
though building and
fire inspections are
required.
St. Louis Park Short term rentals are not
regulated

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Table 2 - Regulation of Short Term Rentals Outside of Minnesota
City Prohibited License Zoning Taxes Length of stay Fire & Registration Ordinance Owner Maintenance Insurance Housing Number of Floor Area Parking Other
Safety occupancy records Code occupants Requirement Requirements
compliance allowed
San X Renting a portion or Clearly posted This must be X Permanent Records for Liability X Residential
Francisco, CA your entire unit sign at front posted on the resident two years. insurance units that
2014 while you are also door with hosting (owner or Residential unit in the are subject
Regulations present for an locations of all platforms tenant 275 must not have amount of to the
unlimited number of Fire listing. You nights in a any no less Inclusionary
nights per year and extinguishers may only calendar outstanding than Affordable
renting a portion or in unit and register one year) Planning, $500,000 Housing
your entire unit building, gas residential Building, or provide Program
while you are not shut-off valves, unit. Fee of Housing, Fire, proof that and
present for a fire exits, pull $50, Health, Police, liability residential
maximum of 90 fire alarms registration is or other coverage in units
nights per year. good for 2 applicable City an equal or designated
years. code violations. higher as below
If you are a tenant, amount is market rate
you may not make being (BMR) or
more than your provided income-
monthly rent from by any and restricted
your short-term all hosting under City,
rental fees charged platforms state, or
to guests. through federal law
which you are not
will rent eligible to
your unit. register.
Chicago, IL Vacation X 90 days or less per An Proof of *The City is
2011 rental year, otherwise a inspection is insurance proposing a
ordinance license is bed and breakfast required, $1500-
required. license is required zoning $3000 Fine
A dwelling board or 6 months
unit with up review and in jail as a
to six $500 fee penalty for
sleeping every two violations
rooms that years
is available
for rent or
for hire, for
transient
occupancy
by guests
which are
not owner-
occupied.
Madison, WI X Tourist X If operator occupies Smoke X Owner or An on-site Low density
rooming at time of rental detectors renter can registry for areas allow
house there is no limit. If Carbon operate if inspection one family
the operator does monoxide explicitly identifying all plus one
not occupy at time detectors allowed in guests, dates of roomer or no
of rental the limit is the lease stay, whether more than
30 days per licensing operator is two
year. present or unrelated
absent during individuals.
stay, and In higher
length of stay. density area,
Registry is for one family
the current plus four
year and the roomers or
year up to five
immediately unrelated
prior. individuals.

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City Prohibited License Zoning Taxes Length of stay Fire & Registration Ordinance Owner Maintenance Insurance Housing Number of Floor Area Parking Other
Safety occupancy records Code occupants Requirement Requirements
compliance allowed
Isle of Palms, X 3 months or less 6 nighttime X X
SC 40 daytime

Monterey X Between
County, CA 7 and 30 days

San X Less than 30 days X Determines X


Bernadino Special number of beds
County, CA use allowed
permit
and
signage
required
Miami Beach, Prohibited
FL in all
single
family
homes
and some
multi-
family
buildings

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October 10, 2016 Short Term Vacation Rental: Stakeholders Input Session

Questions Comments
For communities who already license/regulate, Paying lodging tax does not seem that
are there differences between rentals less than complicated and (general consensus) is that the
two weeks and those that are greater than two tax should be paid.
weeks (given that federal tax regulations dont
apply less than two weeks in a given year)?
What about the county and how do their VRBO business model is simplified if property
inspections relate to these types of uses? How rented less than 14 days in a year, since federal
does this impact other City of Stillwater (COS) income tax is not required for that limited period
regulations? of time.
Is the use commercial or residential? Is the Good to look at from the perspective of guest
zoning commercial or residential? Is the tax safety (water temperature, fire extinguishers or
rate/status commercial or residential? sprinklering system, two means of egress, home
meets all building and fire codes, etc.). This has
to be a part of any regulations for this type of
use. Checklist should be developed and required
to be met as part of permit process.
How will this reflect upon the community? There is a difference between B&Bs and other
types of short term vacation rentals, but there is
cross-over in the customers, operations, impact
upon neighborhood, taxes, etc.
How will the neighborhoods look with changes of The thing that is universal is whether or not the
this nature? lodger has had a bad experience within the
community.
Does COS have any idea on the cost of Not every lodger prefers the types of existing
administration of an expanded program? Is there lodging establishments within the community.
a mechanism for the COS to pay program funds? There are those that want to rent an entire house
Would the cost of staff or monitoring programs without an owner/manager. There are also those
be paid for? Is there the political will to fund a that want to rent a room but not eat breakfast
program and to what level? with the other guests.
What about zoning/permits for specific Stillwater is an event/wedding destination.
areas/neighborhoods and has there been
conversation about areas which the community
would not allow them or that they would not be
permitted?
How can a vacation home business be a The County staff is looking at the City of
residence? Stillwaters efforts to study and regulate short
term vacation rental properties to help inform
their decisions on what they would like to do
with the industry in the future.
What good does a lack of overnight lodging do As a VRBO owner, appreciates all the diversity at
for the image of the community and the events the table. As a business owner (other than
that the community holds? VRBO), think overnight rentals are a good thing
for the community and has been beneficial to the
community and downtown businesses.
What will the impact of another 50-70 unit hotel Is it appropriate to have a zone-specific
have on the community? Will hotel investment allowance? In other words, can the City restrict
occur if there are so many alternative short term short term vacation rental properties to a specific
lodging options available within the community? zoning district?
Will this affect ROI on new investment within the
community?
Should a non-accessible utility room be required As a popular event destination (this is the reason
for monitoring (i.e. water heaters)? people are coming to the community) there are
not that many lodging options for people to stay
in downtown. People enjoy walking to
downtown.
How are the market/community needs shifting Maybe a different set of rules for
and how is this ordinance/regulations/etc. going commercial/downtown areas opposed to
to address those changes? residential areas.
What are the total number of rooms/units in the Likely need to have these regulations through the
other communities? zoning code which would allow for limited
commercial uses in the residentially zoned
neighborhoods.
Question of what we want the City to look like Private property owners can be more restrictive
(opposed to who we are catering to)? than the Citys regulations. So, Home Owners
Associations can prohibit short term vacation
rentals even if the City chooses to allow them.
What is the maximum number of rooms in a We have one of the largest homes on the VRBO
single VRBO that are allowed in other website. Our guests are often families/extended
communities? families who want a communal vacation
experience. This type of lodging option is not
available in the community without the short
term vacation rental properties.
The VRBO website company requires their listed
properties to have someone within 25-30 miles of
the site at all times there are guests/lodgers
onsite.
Community is losing wedding events because of a
lack of lodging within the community.
This is a way to maximum ROI on a house. An
income-generator to allow for new investment
into single family residences.
Concerns include: size of groups per size of
house, parking, character of residential
neighborhoods, and age of lodgers. Concerns
and complaints dont appear to change over
time.
Intent to give flexibility to rent a home but have a
mechanism in place in the event things do not go
well. Try to find the happy-medium for everybody
(but not likely to be perfect for any one).
Limiting location (as in a particular zoning district,
or within a certain distance of downtown, or
along collector streets), and distance (as in no
short term vacation rental could be closer than
300 or 500 or 900 feet of another or of a B&B),
and the potential total number of properties
permitted in the City would be a reasonable to
start.

Discussion with individual stakeholders after meeting included the following notes:

1. The County considers short term vacation rentals to be commercial for health inspection
purposes if the property is not the primary residence of the property owner. The homestead
credit would be lost for State income tax purposes if the home were not the primary residence.
(The County may also change the tax status from residential to commercial, though we are not
sure of this.) In addition, City building code and fire code consider the property to be
commercial if it is not a primary residence. This triggers a number of issues including: egress, fire
suppression, handicapped accessibility, railings, etc.
2. In some tourist destination communities (Duluth, many in the mountain states, etc) the total
number of permitted short term vacation rentals is capped. Duluth allows only 60. The primary
reason for this is that without a limit, the affordable housing stock is converted to STVRs and
service industry employees can no longer find sufficient housing.

Stakeholders included:

1. Several HOA presidents


2. B&B owners
3. Hotel owners representative
4. Residential property owners that put STVR on hold until study concluded
5. CVB President
6. Planning Commission member
7. Two City Council Members
8. Others who have expressed an Interest