2025-01-28 WS City Council Agenda W ORK SESSION
RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM
JANUARY 28, 2025
6:00 PM
Call to order
1.Discuss ban on short-term rentals.
Adjournment
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AGENDA SECTION:Work Session Items
AGENDA ITEM #1.
STAFF REPORT NO.
WORK SESSION
1/28/2025
REPORT PREPARED BY: Sam Crosby, Planner II
DEPARTMENT DIRECTOR REVIEW: Melissa Poehlman, Community Development Director
1/22/2025
OTHER DEPARTMENT REVIEW:
CITY MANAGER REVIEW: Katie Rodriguez, City Manager
1/22/2025
ITEM FOR WORK SESSION:
Discuss ban on short-term rentals.
EXECUTIVE SUMMARY:
Through the policy proposal process in 2024, the City Council identified the restriction of Short-Term Rentals
(STR's) as a priority. The main concern expressed was the removal of the units from the housing market for
long-term residents. Other issues, such as maintenance were also raised. Potential solutions to the concern
would be to either ban or limit the number of STRs. There seemed to be consensus to carve out an exception
for units where the owners live on-site.
In order to understand the scope of the issue, a yes/no question regarding STR's was added to the rental
housing license applications towards the end of 2023.The information in the “Historical Context” section below
has been derived from the resulting report run from the rental license database. STR's make up a small
percentage of all non-apartment rentals in the City (6.5%) and an even smaller percentage of the overall non-
apartment housing stock (0.7%).
Data is still being gathered on the prevalence of code enforcement cases in STR's versus other properties,
but anecdotally neither Inspections nor Environmental Health staff believe that complaints are higher for these
properties and have often found that owners respond more quickly to notices than other owners. Staff is
seeking direction on whether the Council would like to proceed with a ban on STR's, and if so the details of
the prohibition, and procedures to end the practice in the City.
A draft amendment banning rentals of less than one month is attached for discussion.
DIRECTION NEEDED:
Does the Council continue to see a need for prohibition of STR's at this time?
Would the Council prefer to place a cap on STR's? (Not recommended by staff.)
If a ban is still the preferred course of action, what type of compliance period is acceptable to the
Council?
BACKGROUND INFORMATION:
A.HISTORICAL CONTEXT
TOTAL number of non-apartment rental units: 1,097
Number of rental units for Duplex/Double Bungalow (homestead): 17
Number of rental units for Duplex/Double Bungalow (non-homestead): 196
Number of rental units for Rooming House: 1
Number of rental units for Single Family Rental: 883
72 units were self-identified as short-term rentals. This is approximately 6.5% of all non-apartment rental units,
and approximately 0.7% of the roughly 10,045 non-apartment units City wide.
Only one address has a unit number at the end, implying an apartment or condo.
This is based on self-reporting, so the numbers are not necessarily 100% accurate.
Fifteen units appear to be owner-occupied based on the only contact mailing address being the same as the
property address. This is approximately 21% of all short term rentals. This would imply that perhaps it is an
Accessory Dwelling Unit (ADU), since a rental license is not required for only one room in a house that is
owner occupied.
For comparison, there are 335 hotel rooms between the three hotels located within the City boundaries.
B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
One of the purposes of a ban on short term rentals is to remove roadblocks to residents finding
affordable housing options.
C.POLICIES (resolutions, ordinances, regulations, statutes, exc):
It appears that most of the STR's are owned by individuals that live in the immediate area, and a few
owners are even located elsewhere within the City of Richfield. STR owners are the opposite of
absentee landlords, in that they, or a representative, need to be at the property to clean and restock on a
regular basis. STR's are generally considered a low-risk method of earning additional income. It does
not appear that many, if any, of the STR’s are owned by Real Estate Investment Trusts (REIT’s). It is
doubtful that banning STR's would have an impact on corporate ownership of housing, as REIT’s are
just as – or even more - likely to own long-term rentals than STR's.
STR's add variety to the housing the market. All three of the City’s hotels are located along the I-494
corridor. The STR’s scattered throughout the City may provide the opportunity for visitors to be very near
– within walking distance – of the family and friends they are visiting. They provide the opportunity to live
in a neighborhood while searching for permanent housing. They also provide the flexibility needed to
keep housing within a family during times of transition.
The Council did not cite location or concentration as a concern. Therefore, staff did not map the location
of the 72 self-identified STR's. However, they could be mapped if it would be of value.
Bed and breakfasts are defined by the Zoning Code as “owner occupied with no more than two guest
rooms, where lodging with or without meals is provided for compensation." Therefore, so long as owner-
occupied units remain exempt, the Zoning Code would not be impacted by any change. ADU’s are the
only other location in the Zoning Code where owner occupancy is required.
No additional language is needed in order to carve out an exception for when the rental is also owner
occupied. The existing definition of a rental is “a one or two family dwelling which is occupied by persons
other than the owner of record, except a parent, sibling or child of the owner of record, regardless of
whether rent or other compensation is paid to the owner."
While not recommended by staff, the Council could decide to cap the number of STRs rather than
prohibit them entirely. If that option were considered, the most realistic method would be to allow
existing STR's to continue.Both a ban and a cap create challenges regarding monitoring compliance,
but a cap more so.
D.CRITICAL TIMING ISSUES:
Legally – none. This can be enacted at any time. However, staff recommends the following timing
considerations:
Provide written notice to all property owners who identified their property as a short term rental and
provide the opportunity to comment on the proposal.
Write the ordinance amendment so that it takes effect on January 1, 2026, providing a grace period to
allow hosts to accommodate those guests that have already made reservations. Staff suggests to the
end of a calendar year because rental property owners have renewed their licenses for 2025 and they
are good for the calendar year, but 6 months would also be sufficient time for guests to find alternative
accommodations.
E.FINANCIAL IMPACT:
While a ban on anything less than one month duration may cause some short term rentals to go out of
business, some may adjust to the new requirement and stay in business. It has been difficult for Finance
Staff to address the issue of collecting Tourism taxes from STR owners. There is not a mechanism in
place to do this.
F.LEGAL CONSIDERATION:
None.
ALTERNATIVE(S):
Place a cap on Short-Term Rentals at those that are already existing.
Do not make any changes at this time.
PRINCIPAL PARTIES EXPECTED AT MEETING:
None
ATTACHMENTS:
Description Type
Draft Language Change Backup Material
Other Cities STR Research Summary Backup Material
SECTION 407. - INSPECTION AND LICENSING OF APARTMENT HOUSES AND RENTAL HOMES
407.05. - License required.
It is unlawful for any person who is an owner of an apartment house or an owner of a rental home to
operate such apartment house or rental home without first having obtained a license under the
provisions of this Section. No apartment house or rental home shall be rented or leased for a term of
less than one month. There are two (2) types of licenses: regular and provisional. Provisional licenses
are defined in Subsection 407.13. All references to licenses in this Section are references to regular
licenses, unless otherwise stated. No license shall be required under this Section for Rental Homes
which have currently valid licenses from either Hennepin County, or the Minnesota Department of
Health permitting such occupancy.
City Commentary
Fridley
We just regulate them under our Rental Properties requirements. A rental license is required if
the property is not homesteaded or otherwise proven to be owner-occupied.
White Bear Lake Currently no differentiation between short and long. Rental license required unless family
member.
Oakdale Does not distinguish between short-term or long-term rental housing. A rental housing license is
simply required, regardless of the length of the rental.
Blaine
We just require them to have a rental license (same as a long term rental license). We did
discuss potentially having other limits about a year ago but didn’t move forward with them. The
measure council was most interested in was having a minimum rental length to try to limit
houses being used for party houses, since we have had some complaints about that.
Golden Valley
Does not currently regulate short term rentals. If the property owner does not reside on-site, a
rental license is needed. If they do reside on-site, they are allowed to have up to two lodgers
(though they cannot create a totally independent unit for that purpose).
Robbinsdale There have been nuisance issues with “party houses” that is prompting discussion. We may
create a short-term rental permit requirement but it would be connected to an increase in
staffing resources.
West St. Paul We treat short term rentals the same as long term ones, but we do have a calls for service
threshold that if reached or exceeded prompts a provisional license review, additional fees, city
council action, etc. So if there are an excessive number of police calls or property complaints
(that are found to be valid) we charge additional fees.
As an example, single family home rental:
No calls (in the preceeding 12 months/license term) – Category A ($35 renewal application fee)
1-3 calls – Category B ($40 renewal application fee)
More than 3 calls – Category C ($50 fee, $500 provisional license and apublic hearing to assign
an action plan to mitigate calls)
Lino Lakes Currently, the City of Lino Lakes does not have any restrictions on short term rentals, aside from
requiring a rental license.
Vadnais Heights We haven’t had any issues with STR’s here, so we haven’t explored any additional regulations
beyond regular rental licensing.
Minnetonka Does not regulate; we are however looking at a voluntary licensing program.
Shoreview does not regulate short term rentals beyond the rental license.
Minneapolis Yes, permitted with rental license.
Burnsville Yes, with license.
CITIES THAT ALLOW SHORT TERM RENTALS
City Summary
New Brighton Article and Ordinance Mostly in response to party houses, Implemented simple
permit process and require that a "resident agent" live
and work within 30 miles of the unit.
Roseville Ordinance Roseville had an ordinance allowing Short Term Rentals.
The City Council amended the ordinance in February
2023 (attached) allowing only renewals of existing
licenses. We will be bringing back text amendments that
may restrict additional Short term Rentals, but I am not
sure when. The restrictions may include total number of
licenses allowed and number of licensed rental in a
geographic location/proximity.
Plymouth Website
All property owners who operate a short-term rental
must fulfil short-term rental license requirements which
include an application, fee, rental inspection, completion
of mandatory city training, neighbor notification and
complete the monthly lodging tax submittal.
CITIES THAT ALLOW SHORT TERM RENTALS
AND REGULATE DIFFERENT THAN LONG TERM RENTALS
City Commentary
Bloomington Prohibits transient lodging in residential zoning districts. Transient lodging is defined as a
stay of less than 30 days.
Edina Does not allow transient occupancies in residential zoning districts, (this ordinance has been
in place for more than 40 years, so VRBO, etc., are not allowed and the ordinance did not
need to change).
Transient occupancy means the use of a room or rooms for sleeping, cooking or eating, in a
residential manner, for periods of less than 30 days and for a rental fee, or other
compensation, or pursuant to other arrangements with the owner, lessee or occupant of the
premises.
Eagan Does not allow rentals for fewer than 30 days. The definition of dwelling in the City Code,
outlines the 30 day requirement: "Dwelling means a building or one or more portions thereof
intended to be occupied for residential occupancy. Residential occupancy means inhabiting
the building, or any portion thereof, as a household for a period of not less than 30
consecutive days. Dwelling does not mean rooms in motels, hotels, nursing homes, boarding
houses, motor homes, tents, cabins or travel trailer coaches."
The rental licensing ordinance also prohibits short-term rentals, acknowledging them as
follows:
This Paragraph B does not allow and shall not be construed as to allow short-term rentals for
traveler lodging accommodation purposes which are commonly provided through house
sharing platforms such as “Airbnb,” “VRBO,” and other vacation home rentals websites.
https://cityofeagan.com/rental-licensing
Brooklyn Park Short term rentals are not allowed at this time. Since a “short term rental” is not specifically
defined in BP codes, we consider this use as a hotel/motel use and therefore only allowed in
commercial areas. We’ve told people that it would take city council direction to change the
code to allow short term rentals in BP.
St. Louis Park Sec. 36-70. Short-term rental. No person shall offer for occupancy or enter into an agreement
to allow a dwelling unit, or any other portion of their property, to be used as a short-term
rental in a manner not otherwise permitted in the zoning district. (Ord. No. 2596-20, 10-19-
20) And the definition of a short term rental in the code: Short-term rental means leasing a
residential dwelling unit or accessory dwelling unit for a term of less than one month. (Ord.
2596-20, 10-19-20) None of our zoning districts list short-term rentals as a permitted use, so
they’re not permitted anywhere right now. The ordinance formalized this restriction in 2020,
but I think we weren’t allowing them before then.
CITIES THAT DON'T ALLOW SHORT TERM RENTALS