Commission supports homestead‑only short‑term rental registration after wide public comment

The Minnetonka Planning Commission on May 28 held a public hearing on a draft ordinance that would amend city code sections 5.30.02 and 5.30.04 to require registration for short‑term rentals and restrict eligibility to homesteaded (owner‑occupied) properties.

Housing coordinator Kendall Larson told commissioners that registration for all rentals began in February 2024 and that the city currently shows 24 active short‑term rentals registered; of those, 11 are owned by Minnetonka residents. Larson said the draft ordinance responds to concerns raised by council about investor‑owned properties, housing availability and neighborhood safety. Under the draft, short‑term rental operators would have to be homesteaded property owners; staff said there would be no grandfathering of existing non‑eligible units and that registration would be renewed annually.

Public comment was extensive and sharply divided. Longtime resident Joel Stone said short‑term rentals near his Grays Bay home generated repeated parties, unsafe dock conditions and concentrated visitor traffic, and urged the commission to adopt homestead‑only restrictions without grandfathering. “I had five guests in my backyard with one dog,” Stone said during a slide‑assisted presentation outlining property damage, unsafe docks and repeat nuisance behavior by transient guests.

Industry representatives and some hosts urged a more tailored approach. Monica Butler, a manager at a professional short‑term rental firm, said professional management and targeted enforcement have prevented complaints at many properties and warned that a strict homestead rule could force responsibly‑operated owners to sell. Craig Vasey, a local operator and board member of the Minnesota Short Term Rental Association, asked staff and council to consider professional management standards and a possible grandfathering path for compliant operators.

Commissioners generally voiced support for the draft’s homestead eligibility but asked staff to refine implementation language. Questions included whether accessory dwelling units (ADUs) on homesteaded properties could be used (staff: yes), how enforcement and fines would operate (staff: graduated administrative citations with escalation to civil penalties), and whether any exemptions or ‘homestead plus one’ models should be considered to preserve limited lodging capacity and small‑scale hosts who rely on occasional rentals.

Larson told the commission that two of the 24 registered short‑term rentals are owned outside Minnesota and would be ineligible under the proposed homestead rule. Staff said the next step is for the City Council to review resident feedback and staff’s final draft on June 8; if adopted, staff would launch outreach and an annual registration cycle and define enforcement processes and timelines for compliance.

The commission’s feedback will be forwarded to the council; commissioners emphasized balancing neighborhood protection and housing‑stock preservation and asked staff for clearer implementation options to present to council.