Minneapolis will begin regulating Airbnb properties and other short-term rentals in December, just in time for the expected deluge of visitors for the 2018 Super Bowl.
New rules approved by city council on Friday require rental “hosts” and online platforms that advertise properties to apply for city licenses and renew them annually. This will give the city the ability to inspect properties and ban rentals if it detects problems, but may result in legal challenges.
“This is a business we want in our city,” said Minneapolis councilman Jacob Frey, author of the two new ordinances. “Our goal was to provide the very foundation of security and enable an innovative new business to operate.”
Cities in Minnesota and across the country have wondered how to keep tabs on short-term rentals, which have grown in popularity with the rise of online platforms like Airbnb, Expedia and HomeAway, which connect renters with the owners. Many rental properties – ranging from a single room to an entire house – are in residential areas and sometimes cause concern among neighbors.
San Francisco; Portland; Austin, Texas, and Duluth already regulate properties, as do a number of Twin Cities area suburbs, including Stillwater, Lakeville, and Eagan. St. Paul is considering an ordinance governing short-term rentals, but has not yet approved it.
Airbnb released a statement on Friday raising concerns about the Minneapolis ordinance, particularly its requirement that short-term rental platforms prohibit unlicensed hosts from putting their listings online or risk losing their license.
“We are grateful to Councilor Frey and his colleagues for their efforts throughout the legislative process,” the statement said.
“Unfortunately, the order still violates the legal rights of Airbnb and its community. We will consider all legal options to protect the innovation and privacy of Minneapolis residents.
The Internet Association, a group that represents online businesses such as Airbnb, Expedia and HomeAway, released a statement on Friday that the Minneapolis order violates federal law.
The group cited the Communications Decency Act, which protects online platforms from liability for content posted by third-party users.
“Minneapolis’ new ordinance is in clear violation of federal law and limits choice for residents and visitors to the city,” Vice President Dustin Brighton said in the statement. “Short-term rentals provide much-needed income to the citizens of Minneapolis and this rule would hurt their ability to make ends meet.”
Council member Andrew Johnson, the only one to vote against the order, said he was concerned about the consequences of regulating websites like Airbnb.
“I think we have to be careful regulating these tech platforms locally, because they operate in a fundamentally different way than most traditional businesses,” he said. “And if we’re not careful, it can stifle innovation.”
Requirements for hosts
There has been less pushback on the Ordinance Regulating Hosts, which applies different rules to people who rent part or all of their home and those who rent a house or apartment where they do not live.
“I think the spirit of this ordinance is really clear and really meets people’s needs,” said Sonja Blackstone, who rents out part of her home in the Longfellow neighborhood through Airbnb.
Under the order, hosts who rent a property where they don’t live will need to obtain a standard rental license and will be subject to inspections like other landlords.
People who live in the property they rent but move out while guests are there will need to obtain a $46 annual license and may be subject to certain inspections. Hosts still living on the property will not be regulated or will have to pay licensing fees.
There are about 1,600 short-term rental properties in Minneapolis, according to the city.
Carol Liege started renting a room in her northeast Minneapolis home two years ago and said she loved having regular company and bringing in a little extra income. She kept an eye out for the new ordinances – although they wouldn’t apply to her – and said she thinks they seem fairer than regulations in other cities.
“It really doesn’t impact the old lady like me who just rents a room,” she said.
Minneapolis is expected to begin accepting license applications Dec. 1.
Now the city will be able to inspect properties and revoke permits for violations. Properties that offer unlicensed short-term rentals would lose their ability to operate.
Rental platforms will also have to be authorized by the city. At a public hearing on October 10, a few local short-term rental business owners expressed concern about having to pay the same amount for a license as larger businesses.
In response, Frey introduced an amendment on Friday that will charge smaller accommodation platforms — those that display 150 listings or less — an annual licensing fee of $630. The biggest hosting platforms will pay $5,000.
Writer Jessie Van Berkel contributed to this report.
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