Short-term rentals October 10, 2017 Noah Schuchman Director, - - PowerPoint PPT Presentation

CITY OF MINNEAPOLIS

Short-term rentals

October 10, 2017 Noah Schuchman Director, Regulatory Services Grant Wilson Business Licensing Manager, CPED

Council staff direction

Staff Direction by Council Member Frey September 21, 2016, Committee of the Whole Frey directs the City Coordinator’s Office to convene a workgroup to examine the home-sharing industry, including a review of the marketplace served by businesses such as Airbnb, Couchsurfing, HomeAway and others. The workgroup shall include representatives from the City Coordinator’s Office, Community Planning & Economic Development, Finance and Property Services, Intergovernmental Relations, Regulatory Services, City Attorney’s Office and Meet Minneapolis along with representatives from existing homesharing businesses and key stakeholders in the marketplace.

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Workgroup representation

The workgroup included representatives from:

• Internal City departments: Nuria Rivera-Vandermyde (City

Coordinator), Sasha Bergman (IGR), Noah Schuchman (Regulatory Services), Kim Keller (Regulatory Services), Grant Wilson (CPED), Bradley Ellis (CPED), Steve Poor (CPED), Mei-Ling Smith (Health), Joel Fussy (City Attorney’s Office), Mark Winkelhake (Finance), and Matthew Hendricks (Finance)

• External departments: Brent Forester, Sandy Christensen, Bill Deef,

and Melvin Tennant (all Meet Minneapolis)

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Workgroup process

The workgroup met from October 2016 to May 2017 and covered topics including:

• Financial/tax implications
• Review of other cities’ ordinances
• The Minneapolis housing and rental markets
• Input from stakeholder groups, including: Airbnb, Expedia, hosts,

hotel lodging industry

Through this work, the group defined a short-term rental as the rental of a dwelling unit for a period of less than thirty (30) consecutive days, for tourist or transient use

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Research of other jurisdictions

• Ordinances and policies vary depending upon the needs of the

jurisdiction

• Some cities prohibit entirely, while others have varying levels of

restrictions

• St. Paul,

Minnesota

Proposal requires that the dwelling used for short-term rental have a license, and will require the booking platform to be

• licensed. Special restrictions include a limit of 50% of units in a building, and a CUP for very large dwellings in residential zones.

Inspection required.

Duluth, Minnesota

Allows owner occupied and non-owner occupied properties. The dwelling must be licensed, not the platform. Higher fee for non-owner occupied properties. Limited to 60 vacation dwelling units. Inspection required.

Eagan, Minnesota

Allows for short term rentals in residential zones.

San Francisco, CA

Owner must live in building nine months of the year. 90 days per year maximum rental. Platforms must follow rules to remove unlicensed units, etc. License required for the dwelling.

Portland, OR

Owner must reside in the building nine months of the year. License required for the dwelling. Platforms may not license unlicensed or problem properties.

Austin, TX

Allows non-owner occupied properties. No restrictions on the number of days rented in a year if owner occupied. License required for the dwelling. Inspection required.

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Current status

Regulation

• In most situations, short term rentals are currently not regulated in
• Minneapolis. This has several implications.
• Properties without a rental license will only receive an inspection

based upon the following:

• Complaints
• Life-safety concerns
• Referrals post-fire
• Organized neighborhood sweeps
• The number of short term rental units are not being tracked
• Tax revenue is not collected

Industry impact

• In Minneapolis, recent estimates suggest more than 1,600 properties are

available for short term rental

• Dramatic increases in the industry are expected around large events

such as the Super Bowl, X Games and the NCAA Final Four

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Draft ordinances

Staff propose regulation of both the platforms and hosts

Business Licensing licenses the platforms Regulatory Services licenses the hosts

Title 13, Chapter 351 Title 12, Chapter 244

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Chapter 351 Proposal

Annual business license required for short term rental hosting platforms

• Identifies true owners and operators of each hosting platform
• Insures that hosting platforms remain law abiding
• Provides communication opportunities to host property
• wners
• Hosting platforms may not list non-compliant properties
• Hosting platforms to accurately collect taxes
• License fee recommended to be set at $5,000 annually

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Chapter 244 Proposal

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Financial impacts of proposal

Revenue Expenses Estimated sales and entertainment tax $700,000 Platform business license $5,000/platform Host rental license fee Follows Tier 1 and 2 rental license standards Host registration fee $46/year per registered unit Staffing: Customer Service Representative 1 FTE in 2018 Unknown in future years Staffing: Housing inspector 1 FTE in 2018 Unknown in future years Data scraping services $45,000 in 2018 Annual fee tied to number of listings

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Next steps

Pending October 20 passage

• Begin accepting applications December 1

Communications

• Web presence
• Property owners workshop
• Provision in Chapter 351
• Connection to Super Bowl committee

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Questions?

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