Duluth seeks new vacation rental rules

In general, councilor Zack Filipovich has said the vacation rental issue has been a bone of contention since 2020, when council rejected a proposal from the Duluth Planning Commission to lift the 60-unit limit on the number of homes in the community can be converted into rentals for visitors.

But the question of how to regulate properties continued to simmer and resurface earlier this year, when the owner of an eight-bedroom home applied for a permit to convert the residence to a vacation rental. Under current rules, it would have been allowed to accommodate up to 17 guests at a time, causing neighbors to worry about such a high-density operation opening next door. The owner of this property has voluntarily agreed to limit the number of guests allowed to 13 to allay neighborhood concerns, but the situation has prompted Council to review the city’s vacation rental rules.

Duluth could revise his rules for vacation rental properties, motivated in part by plans to rent eight rooms at this West Fifth Street property (pictured Monday, July 26, 2021) to a maximum of 17 people at a time. The owner has voluntarily agreed to reduce this to a maximum of 13 guests. (Steve Kuchera / [email protected])

Councilors Terese Tomanek, Roz Randorf, Janet Kennedy and Filipovich have taken the lead in seeking to update the city’s approach to vacation rentals.

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“It wasn’t easy, because it’s a very controversial issue, and everyone has different views on it. So I’m really proud that we were all able to come together and come to a great compromise, ”Filipovich said.

The resulting prospective order, which is expected to be voted on before Council Monday, would be more restrictive of the status quo on size. This reduces the number of guests that a single rental property can accommodate to nine – and that would only be allowed for a residence with four or more bedrooms.

Vacation rental properties that are already allowed to accommodate more than nine people would be allowed to maintain that capacity under a grandfather clause, unless the owner of the property changes.

While the revised ordinance would reduce the accommodation capacity of vacation rentals, it would be more liberal with regard to the cap on vacation rentals. The cap would be allowed to increase by a number equivalent to 10% of new housing units acquired by Duluth the previous year – up to a maximum of 10 additional vacation rental licenses per year for the next six years.

As a result, even if Duluth grows at a rate of over 100 new housing units for six consecutive years, the city could not issue more than 60 additional vacation rental permits, for a total of 120, when combined. the current number of licenses outstanding.

“We are slowly increasing, and I would say responsibly, the cap, pairing it with the number of other housing units we can build in the town of Duluth,” Filipovich said.

“This helps to increase the number of these full-time vacation homes, while not eroding our housing stock significantly,” he said.

On the cost side, the amended ordinance would increase the fees Duluth charges for rental licenses from $ 621 to $ 1,600, with half of the proceeds to go into a new housing trust fund designed for increase the city’s affordable housing inventory.

The city would also offer joint tenancy permits and a short-term vacation housing permit that would allow homeowners to rent out their homes for no more than 21 days per year at an annual cost of $ 250, again with half the proceeds. paid into the Housing Trust Fund. There would be no cap on the number of such permits that could be issued.

“This will allow people to go away for the weekend, rent their accommodation for up to 21 days a year, earn pocket money and use it to repair their property or spend it on local businesses and supporting our local economy, ”Filipovich said.

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