Minneapolis & St. Paul
City homeowners hoping to offer up space to short-term renters — during Super Bowl nights or others — will need to get familiar with new regulations approved over past couple of weeks in both St. Paul and Minneapolis. With the 2018 Super Bowl approaching and rental rates rising, officials in both cities felt the need to weigh in on the home sharing economy, an established sector that's been continuing to grow here in the metro — city officials estimate approximately 1,600 short-term rentals in Minneapolis and about 350 in St. Paul at last count. An exact number has been hard to calculate because in the past, short-term leasing was not a legally-approved use of residential property. It is now. And with legal use comes regulation, taxes and licensing.
It's legal now, but...
Each city has just approved its own set of licensing fees and regulations for both homeowners, or "hosts", and online platforms like Airbnb and VRBO who wish to operate within a city. Minneapolis took a more lenient approach toward both the platform companies and hosts, especially homeowners occupying the space. St. Paul appears a bit more stringent, especially regarding licensing fees for platform providers and occupancy restrictions. (Click here to see details on St. Paul's short-term occupancy limits.)
Fee amounts and registration requirements depend on whether and when a property owner is present during a rental period. They also differ by city. For example, homeowners wanting to rent out a room in their primary residence will pay nothing in Minneapolis, but $40 in St. Paul. Hosts leaving temporarily to rent out their homes need to register and make annual payments of $46 in Minneapolis and $40 in St. Paul. Parking restrictions and sales tax requirements will also apply.
A third category includes non-owner occupied properties which are treated much like regular long-term rentals by both cities. The chart below roughly outlines the Minneapolis and St. Paul fee structure for all categories of short-term rentals, as well for platform companies operating in the area.
Fees and Licensing
*Minneapolis long-term rental fees.
**St. Paul Certificate of Occupancy requirements
Condo Considerations
Keep in mind, if you live in a CIC (Common Interest Community) like a condo or townhouse, you'll first need to determine what is allowed in your building. Association bylaws supersede new city ordinances and breaking the those rules could get you into hot water with your association. Also be aware of your CIC's insurance coverage for any "hotel-like" occupancies, which may raise a red flag for your insurer. At my condo, for example, the building insurance policy would automatically be set for non-renewal if underwriters caught wind of a short-term rental operating in the building. Of course, changing your bylaws to accommodate shorter rental periods is always an option if association members can reach an agreement.
Surrounding Cities
If you live in a surrounding suburb and wish to rent, check first with your city officials. Some cities have strict ordinances in place, some do not. For example, Woodbury does not allow short-term rentals and will enforce when notified. Bloomington also prohibits them, though admits the option has not been reviewed recently. A Brooklyn Park city planner says the city does not currently allow them but lately it's become a "topic of discussion". In Edina you can rent out your home long-term without a license or inspection, but short-term stays (30 days or fewer) are not allowed. Violations and enforcement are complaint-based; if discovered, hosts will be asked by the city to cease. Check with City Planning or Rental Registration and Inspection offices to see what's allowed in your city.
Super Bowl rates
Airbnb search results for renting an entire house in Minneapolis for up to 4 people, on Feb. 3, 2018.
Just in Time
Both Minneapolis and St. Paul hope to get the short-term application process up and running in time for February Super Bowl bookings. Minneapolis will start accepting applications beginning December 1. St. Paul, a week behind in approvals, will be accepting shortly thereafter. For further details and application information, follow these links to your city's website: Minneapolis | St. Paul
Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on a variety of real estate related topics including buying and selling, market conditions, homeownership trends and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.