Owners of properties operating as short-term vacation rentals in Crow Wing County could soon see new regulations in place, depending on the outcome of a vote expected at the Tuesday, Dec. 31, county board meeting.
A public hearing on the matter is scheduled to take place near the beginning of the 9 a.m. meeting on the third floor of the Crow Wing County Historic Courthouse in Brainerd, after which commissioners are expected to vote on a proposed ordinance. The draft ordinance outlines requirements for annual licensure along with regulations concerning septic systems and solid waste, occupancy, noise, parking and conformity with existing county and state requirements.
“It is the purpose and intent of this ordinance to regulate short-term rentals within Crow Wing County,” the draft ordinance states. “To continue the allowed use of private vacation rental homes, but also mitigate possible adverse impacts to the health, safety, and welfare of surrounding properties, as well as water and environmental quality, through the establishment of a licensing program for the review and approval of vacation rental home operations.”
The ordinance states short-term rentals will not be allowed to operate in the county without an annual license and defines these rentals as “any home, cabin, condominium or similar building that is advertised as, or held out to be, a place where sleeping quarters are furnished to the public on a nightly, weekly, or for less than a 30-day time period and is not a bed and breakfast, resort, hotel or motel.”
The ordinance would also limit overnight occupancy to no more than four adults per bedroom plus one additional person per building, or no more than the septic system is designed to handle; establish quiet hours between 11 p.m. and 7 a.m.; and require the person in charge of the establishment to “permit access to all parts of the establishment at any reasonable time for the purpose of inspection as often as deemed necessary.”
Tuesday’s hearing is expected to include varying points of view. A total of 46 comments on the proposed ordinance were submitted to county officials ahead of Tuesday’s meeting. Although a slim majority of those comments voiced support for the measure, a sizable number of those responding issued strong opposition to regulations.
Among those voicing support are the cities of Breezy Point and Fifty Lakes, Ideal Township, Hospitality Minnesota and the Brainerd Lakes Chamber of Commerce. Hospitality Minnesota — an association representing restaurants, lodging establishments, resorts and campgrounds — argued private property owners renting dwellings to travelers should be subject to reasonable regulations, just as its members must follow.
“Our members follow numerous federal, state and local laws and we support legislation to ensure that short-term online rentals compete fairly, and that the health and safety of the public are protected,” a submitted comment stated. “... The short-term online rental market continues to grow as a business, and as such, it should be regulated as a business to ensure it is meeting the proper standards of public health and safety.”
But those opposed are sounding the alarm on the potential negative economic impacts of an ordinance — both on individuals as well as the Brainerd lakes area as a whole. Chad Schwendeman, broker/owner of Exit Lakes Realty Premier, said he believes the economic effects would be catastrophic.
“We work with many buyers that are looking to purchase a cabin in the Brainerd Lakes Area, but it might be a few years earlier than they had anticipated,” Schwendeman wrote. “Having the option to rent their lake home out to offset the costs associated with owning the home has been an incredible option and has motivated many buyers to purchase a lake home. If they are no longer allowed to rent out their home, I am concerned that these buyers are going to forego purchasing in our area and may look at other lake destinations such as Detroit Lakes and other areas which currently do not have such an ordinance.”
Tax changes also in pipeline
The proposed county ordinance is another potential change on tap for property owners operating short-term vacation rentals. The Minnesota Department of Revenue recently instructed counties to reclassify those properties as commercial for tax purposes, which would lead to significant tax increases. Crow Wing County Land Services Director Gary Griffin said his office intends to take a conservative approach in reclassification, applying the change to those properties rented for more than half the year.
During a recent meeting with area state legislators, county officials urged them to enact legislation that would either classify short-term vacation rentals as bed and breakfast establishments, or create a new definition for the use for tax purposes. As it stands, the revenue department’s guidance would mean vacation rental owners would pay a higher tax rate than campgrounds and resorts.
“That is about a four- to five-time increase in the property taxes for those folks,” said County Administrator Tim Houle. “... It doesn’t seem fair to us either, so what we’re asking you to do is to intervene to assign vacation rentals to a lower tax class.”
Amid that conversation, state Sen. Carrie Ruud voiced her support for a Crow Wing County ordinance to regulate the properties. Ruud said there should be fire codes, carbon monoxide detectors and inspections of wells and septic systems. She also relayed her personal experience of living near a vacation rental.
“I’ll tell the reason why I’m not living on Pelican Lake anymore, is because the one down the road from me drove me right out of my house,” Ruud said at the Dec. 17 meeting. “There’s police calls every weekend, there’s no parking for any of them. There’s up to 15-30 cars there, the garbage is piled high. I have pictures of the garbage that’s as high as me. It’s not a big deal in the winter but in the summer when you have skunks and raccoons and bears that spread it by Monday morning all over your neighborhood, it’s a big issue. It’s in a residential neighborhood where people live.”
If you go
What: Public hearing on proposed Crow Wing County short-term vacation rental ordinance.
Where: Crow Wing County Historic Courthouse, third floor county boardroom.
When: 9:05 a.m. Tuesday, Dec. 31.
Why: County commissioners intend to vote on whether to establish the ordinance, which includes annual licensure requirements along with a number of regulations owners of short-term vacation rentals will be required to follow.