02/19/2019 - Short Term Rental CommitteeMemo
To: Councilmembers Meg Tilley and Paul Bakken
From: Dave Osberg, City Administrator
Date: February 5, 2019
Subject: Short Term Rental Study Committee Meeting
The Short Term Rental Study Committee is scheduled to meet on Tuesday, February 19, 2019
at 4:45 p.m. in the Eagan Room at City Hall; (the meeting will be prior to the Listening Session /
City Council meeting that same night). Community Development Director Jill Hutmacher, City
Planner Mike Ridley, City Attorney Mike Dougherty and I will be in attendance. Since the
Committee has not meet for about a year, I have attached the same packet of material that was
shared leading up to the first meeting conducted back on January 11, 2018, as it may serve as
a guide for your discussion on February 19, 2019.
If you have any questions or would like additional information from staff prior to the meeting,
please contact me.
David M. Osberg
City Administrator
cc. Jill Hutollidher
Mike Ridley
Mike Dougherty
EAGAN
Memo
To: Councilmembers Meg Tilley and Paul Bakken
From: Dave Osberg, City Administrator
Date: February 5, 2019
Subject: Short Term Rental Study Committee Meeting
The Short Term Rental Study Committee is scheduled to meet on Tuesday, February 19, 2019
at 4:45 p.m. in the Eagan Room at City Hall; (the meeting will be prior to the Listening Session /
City Council meeting that same night). Community Development Director Jill Hutmacher, City
Planner Mike Ridley, City Attorney Mike Dougherty and I will be in attendance. Since the
Committee has not meet for about a year, I have attached the same packet of material that was
shared leading up to the first meeting conducted back on January 11, 2018, as it may serve as
a guide for your discussion on February 19, 2019.
If you have any questions or would like additional information from staff prior to the meeting,
please contact me.
David M. Osberg
City Administrator
cc. Jill Hutollidher
Mike Ridley
Mike Dougherty
1 e
ir
*-%1.- -01
-------
EAGAN
Memo
To: Councilmembers Meg Tilley and Paul Bakken
From: Dave Osberg, City Administrator
Date: January 8, 2018
Subject: Short Term Rental Study Committee Meeting
The first meeting of the Short Term Rental Study Committee is scheduled for Thursday, January
11, 2018 at 10:00 a.m. in the Second Floor Conference Room. Community Development
Director Jill Hutmacher, City Planner Mike Ridley and I will be in attendance for the meeting.
Staff has not asked anyone from the City Attorney's office to attend the meeting: that may take
place at future meetings.
Staff would propose the following topics for the Committee to discuss at this first meeting:
A.) Establish a meeting schedule and timeline for submittal of the findings from the
Committee to the full City Council. In other words, what workshop do we want to target
for presenting to the full City Council.
B.) Frequency and scheduling of meetings: How often does the Committee want to meet,
and other logistics related to coordinating the meetings.
C.) Staff has included all the attachments from the December 12, 2017 City Council
workshop when this topic was last discussed by the full City Council. Is there any
material in particular the Committee would like to review in further detail during the
meeting?
➢ Staff has also included information from the City of Burnsville as their City Council
recently voted to allow short term rentals.
D.) Staff has prepared an attachment entitled: "Short Term Rental Policy Considerations".
Consider this a checklist of policy questions for the Committee to review as it
contemplates the elements that might be included in an ordinance that would allow for
short term rentals. These have been compiled from the plethora of information available
regarding short term rentals , and they also reflect certain elements of the questions the
City Council has addressed during its discussion on short term rentals. Imagine this as
a checklist of topics to cover during the Committee deliberations.
E.) Finally, the Committee may wish to provide direction to Staff on what additional research
is needed in advance of the next and future meetings. Perhaps the discussion on the
policy considerations above will lead to additional research needed.
Agenda Information Memo
December 12, 2017 Special City Council Meeting
V. Short -Term Residential Rentals — City of Eagan
Direction to be considered:
Direct staff to work with the City Attorney on a City Code amendment accommodating
Short -Term Residential Rentals.
Or
Direct staff to retain the minimum 30 -day rental requirement.
Facts:
➢ The City Council most recently discussed short-term rentals at their July 11th
Special Meeting.
➢ In addition to background information provided by staff and some letters of
support, the Council had dialogue with two residents (Murphy McCann and
Rosemary Ndupuechi) that are proponents and purveyors of the activity.
➢ Reference was made at the special City Council meeting on July 11, 2017 to
various State of Minnesota and MN Department of Health (MDH) regulations
that could affect the operation of short-term rental (STR) uses.
➢ A "hotel/motel' or "lodging establishment" license from the MDH is required for
the rental of a home for public lodging accommodations as those terms are
defined in MN State Statutes and MN Rules.
➢ In 2015 Staff communicated with MDH and confirmed that it deems short-term
rentals to fall within the lodging license requirements.
➢ The City is not required to enforce the MDH license or other State regulations.
Yet, the City may require that any lodging rental operating within the City have a
valid MDH lodging license.
2
➢ The Minnesota Sales tax and local lodging tax also applies to STR's, as all lodging
rentals in the City are required to pay the City lodging tax.
➢ Enforcement and collection of Eagan's lodging tax would be the City's
responsibility.
➢ Should the City license STR's, the City would be required to obtain the individual
STR's Minnesota Tax identification number and submit the same to the MN
Department of Revenue.
➢ On July 11th, the City Council directed staff to research policies and regulations
on short-term rentals enacted by other cities. San Francisco is a popular short-
term rental destination as well as the headquarters of Airbnb. A handout
describing San Francisco's regulations is attached. Minneapolis, St. Paul and
Duluth each recently revised their short-term rental ordinances and a table
summarizing their ordinances is attached.
➢ Information received from the public since July 11 is attached.
➢ Finally, previous information provided by the ECVB, the City Attorney and a staff
summary memo are also attached to provide additional background.
➢ The City Attorney will attend Tuesday's meeting
Attachments: (8)
SPCC V-1 Table illustrating recently adopted local regulations
SPCC V-2 07-11-17 Council Minutes
SPCC V-3 McCann slides supporting STRs
SPCC V-4 Grinde letter and materials in opposition to STRs
SPCC V-5 San Francisco Short -Term Rental Regulation Summary
SPCC V-6 ECVB research and comments
SPCC V-7 07-05-16 STR Summary Memo
SPCC V-8 04-02-15 City Attorney Memo regarding transient lodging
Comparison Table
Short-term Rental Ordinances in Minneapolis, St. Paul, and Duluth
Minneapolis
St. Paul
Duluth
Owner -occupied
License not required
Allowed with license,
City Accessory Home
Rentals
but cannot be used for
Share Permit and MN
commercial or social
Dept of Health Lodging
events. For multi-
License are required.
family buildings, 50% of
units can be short-term
rental but no more
than 4 units/building.
Non -owner -occupied
Tier 1 or Tier 2 rental
Same as owner-
City Vacation Dwelling
rentals
license required
occupied rentals.
Unit Permit required —
(regulated as an
limited to 60 permits
apartment or other
issued. MN Dept of
rental unit)
Health Lodging License
also required
Short-term rental
Annual license: $630
Hosting platform
Not addressed.
hosting platforms
for platforms with <150
license required
listings, $5,000 for
($10,000). Platform
platforms with 150 or
required to remove all
more listings
hosts not in
compliance with city,
state, or federal laws.
Fire Safety Inspection
Required as part of
Fire Certificate of
City Fire Operational
regular rental license
Occupancy required for
Permit required.
program with
non -owner -occupied
frequency dependent
units.
on tier
Insurance
Not addressed
Must provide
Not addressed.
certificate of liability of
at least $300,000 with
city listed as certificate
'
holder OR use platform
that provides equal or
greater coverage
Local Taxes
Not regulated as hotels Keep lodging log and
Duluth tourism tax is
provide annual proof of `
applied
lodging and sales tax
' payment.
State Taxes
Not addressed Remit all local, state,
State Tax ID must be
and federal taxes
included on application
unless the rental
platform does so on
j host's behalf
MINUTES
SPECIAL CITY COUNCIL MEETING
JULY 11, 2017
5:30 P.M.
EAGAN MUNICIPAL CENTER
City Councilmembers present: Mayor Maguire, Bakken, Hansen and Tilley. The meeting began at 5:35
p.m. Councilmember Fields arrived at 5:37 p.m.
City staff present: City Administrator Osberg, Assistant City Administrator Miller, Community
Development Director Hutmacher, City Planner Ridley, and Director of Public Works Matthys.
ROLL CALL AND ADOPTION OF THE AGENDA
Councilmember Bakken moved, Councilmember Hansen seconded a motion to adopt the agenda as
presented. Aye: 4 Nay:0
VISITORS TO BE HEARD
There were no visitors to be heard.
SHORT TERM RENTAL CONSIDERATIONS
City Administrator Osberg introduced the item noting back in May staff shared with the Council
correspondence received regarding Airbnb's operating in the City of'Eagan. The property owners are
requesting the Council to reconsider the current short-term rental stance. Osberg noted the topic of
Short -Term Housing Rentals was discussed by the Council at a work session in 2014 where a significant
amount of information was submitted and considered by the Council. Earlier this year a short-term
rental complaint was made and staff's research revealed approximately one dozen Eagan residential
properties that were listed on short-term rental sites.
City Planner Ridley gave a staff report.
Murphy McCann, 1601 McCarthy Road and Rosemarie Ndupuechi, 1485 Lone Oak Road, addressed the
Council regarding their Airbnb businesses in Eagan and were available for questions.
The City Council discussed short-term housing rentals. After further discussion, the Council directed
staff to research how other metro and out-of-state cities handle short-term rentals, policies and local
regulations regarding Airbnb-type uses and bring back to a future Council workshop.
MULTI -FAMILY PARKING CONSIDERATIONS
City Planner Ridley introduced the item noting the City Council and Advisory Planning Commission have
encountered parking deviations from the parking standards with enough frequency over the past
several years that Council requested staff research requirements in other metro cities. Ridley noted
Eagan's City Code parking standard for multi -family residential is two stalls per unit, with at least half of
the spaces required to be enclosed. The City Code does not differentiate between senior living and
market -rate apartments.
The Council discussed multi -family parking considerations.
N
/�
1
O
W
`�
N
�
�
�
�
o�
��_
0
U
ti
+-
O
OL
O
O
O
O
O
Q
�
p
}
�
UJ
O
O
O
Q
oU
N
o
.+-
o
n
O
N
-C
U
N
} N
O
O
N
N
O
O
.0
E
N
U
II
O
N
O
O
Ln
Q
Q
�
} �.
O
p I--
NOOo
—c0
D
F-
°
z
CL
1
1
1
ti
� @ $
.� V)�
0 \ ��_ }
/ f / u¢
' e / O
0 ± 0.9
7 . f / 0 0
/ g 'C / � }\ g
� / 0 e \
3 '� E .
33� CE 0
O O
E / 00
/ O :
Ln E
-0�' / 00 /
/
CD
Q _ -0
| E O $ O 0 O I
® 2 c 0) E 3:V),- — D
.ƒ / - �_,�z 2 `\
/ 2 / / / O $
U c > '� :t--.� / � - O
V) p / 3 / e .E ^
o/ 2ƒ g\ -C 2�
/
O
C 0\ ¢ ƒ,Q /
0
U \ 4 / O \
�s2 /QL,§ � O
$o c / _._ O
3 0 2 U
%./ 00-
0 0-0
Ln
\� �$ �j R/ Ln /0
O C / /
O /
\ $ \ / �.E / }.
J��E �� Ln
f
/ / C) E:
OV) t.:-: 0>
O D Q / � / \ \
e.ƒ ul U (D ® >
./ƒ�$ OO // p/��
0'�n / c ■
Q.@ ¢ V / � / �.@ E
n
.z
U
N N
p
N
D N
c
�•—
0) >
O
p
LU
N
cn
N O
p
v)
Q
N U
U
c
O
N0 Zn
C
�0w
O �.
O
3
O
U
O
Q N
L>
U
O Q
O E
O 3
c
O . U
}.
0.-
�;
Q
Ln
���
N
�'��
C)�0.
U
O,
D �
p
N
N
�
U
p U
n�
C)
c
s
a
e!
Wui
i
co
9
.z
�
0
U
�
�
�
u
E
L4--
0
(
\
�
m
D
�
E
\
�
�
$
4--
O
2
/
0
$
�
E
�
cn
Q
'$
�
Q
'E
\
0
/
0
0
—
LU
�
$
-C
Mr..
2
�
4-
�
0
-C
m
Q
4-
E E
2
'b
E
�
g
�
I
\
S
m
-f-
`>
0
>
Q
40
0+
CLO
@
�
�
2
C
O
L
N
O
L
3
U
O
O
p
U
O
L
O
v)
N
•�
Z
N
-
a
0
O
7C)
N U
Q
O
N
�
O O
'N
E
+-
E
0
CD
_
N
N
—
O
Q
0-0)
O
N
O
'
V
N i
O
N
O
O
N
N
O
C
Q
E
O
Z•�
E
nL`
C3
O
W
O
O
N
O i-
•�
p
>
-�
O
Q
O
N
a) O
Q)
N
�--
E
Ll -O
C)6)
p p U
O
O
O
U
.i
m
D
O
N
��nS
}
O
N -
V
Q.
Q
70
'N
O
0
O
4—
3 Ln0
a�
N
U
\
�
•o
�
� �
.�
o
O
.E N
O
c
• -
vs
Q
O
Q I-
Q
M
r
N
N
-f-
HC_
C_
�
�
v
v
�
O
�
L
CT
O
�.l
O
O
D
p
O
J
o
�
v
v
L
O
v
v
O
—
o
w
M
r
n�
�W
0
QL
0
OL
e
E
v
T
N
U
O
a
L c:
N
�N
,U
N O
L
a
0
^L 0
W
h -nn
N,,
O�
a) 7U�
^a V
0
O U
N C)
_ N
�O
a) ^ `
Q
N
a)
U
LO
r
co
co
M,
W
M
I?
LO
110
Mike McGuire, Mayor
Gary Hansen, Councilperson
Cyndee Fields, Councilperson
Paul Bakken, Councilperson
Meg Tilley, Councilperson
Dear Mayor and Council:
I had hoped that the daily rental of single family and multifamily residences in the City of Eagan
had been decided to not be allowed in 2015. Allowing individuals to rent their homes,
condominiums to persons via companies such as Airbnb, VRBO and HomeAway is an
extremely poor business concept often both for those renting this home/unit to strangers. The
pair of residents who were operating an Airbnb within the city who didn't know it wasn't allowed
who said "it's prevented them from going into foreclosure and helped introduce outsiders to
Eagan." Perhaps what they meant to say is that without the income from the Airbnb rents they
would have their property foreclosed upon. Eagan has approximately 59 -licensed lodging
places that can be rented daily, weekly, or monthly and give people the time to learn about the
many features, advantages and benefits of Eagan —legally and safely.
The Eagan Convention and Visitors Bureau, Burnsville and Savage does not allow rental units
for less than 15 -days.
The real crux of the matter is that Eagan has been a very well managed City in the 29 -years I've
lived here. Eagan has established city ordinances that regulate hotels, motels and other
licensed lodging establishments assuring renters that the lodging meets standards for fire
control, ingress and egress, wheelchair access, and a clean sleeping accommodations.
Because the lodging facilities are licensed they have commercial insurance coverages for the
building, grounds and for their guests.
If food is served the lodging facility has been checked by the health department so that to the
extent possible that food and drinks available to the guests are safe and eatable.
Renting a private residence via Airbnb, VRBO, or HomeAway avoids all of these safeguards_ A
homeowner's insurance policy does not cover a renter nor does it provide protection to the
homeowner who rents their property. Why because their insurance policy specifically details no
coverage for rentals (of any period of time). Why because insurance companies are well aware
of the extra inherent risks when renting!
Thus both the private residence owner has increased risk that may or may not be covered under
the contact with Airbnb, VRBO, and HomeAway or similar. Several tout that they have billion
dollar policies that cover damages to the private residence owners who have their property
damaged. However trying to get these companies to pay can be a long difficult exercise in
futility.
But the "fun" doesn't stop with the private residence owner. Because if the renters damage the
rented residence say perhaps a fire and that fire damages nearby homes, condominiums or
apartments guess who is responsible? The private residence owner
17
When we're detailing "fun" how about if one of the renters damages a neighbor's vehicle when
coming to or from the private residence? Now who pays? Perhaps Airbnb, VRBO or
HomeAway... not if they can find wiggle words in their contact with the private residence owner
to avoid that issue.
Renting without meeting the appropriate safety codeslordnances means that while placing
greater personal and guest risks it also means that the City, County, and State are deprived of
the tax revenues to support their valuable services!
There are numerous "horror" stories from private residence owners who have rented their
property to persons unknown and discovered that their residence was not used as they believed
it would be:
Examples include large parties that resulted in significant damages to the property. The illegal
sale and use of drugs by many persons who attended "parties" at the residence. Prostitutes are
using Airbnb for'pop-up brothels' was reported in the NY Post by Dana Sauchelli and Bruce
Golding on 14 April 2014.
Is this what the residences of Eagan want? Allowing short-term rentals may create income for
few by exposes the entire City to the many down sides of effectively unlicensed rentals of
private residences!
REASONS TO NOT ALLOW SHORT-TERM RENTALS OF PRIVATE RESIDENTAL
PROPERTY
1. el, Defeats the State and City zoning codes designed to protect homeowner's from
commercialization of properties zoned residential.
2. C'= Property owners insurance does not cover commercial uses. Companies such as Airbnb,
VRBO and HomeAway's insurance typically only covers damages that exceed the property
owners insurance... which is none!
3. 0` Neighbors properties (residence, vehicles, and persons) are at increased risk and may
only have the assets of the property owners who rented their property to recover their losses!
4. e` Potentially loud music, talking at late hours can disturb the residential neighbors.
5. e': Eagan has approximately 59 -commercially zoned and built to provide short-term lodging
that meets the State and Eagan building codes for safety. Approval to allow short-term rentals
by property owners whose dwelling does not have to meet the same safety standards and
insurance requirements puts those properties at an unfair advantage.
6. e` State and municipal taxes are unlikely to be collected. Lost revenues!
7. e,,: Often major sporting events and national musical entertainers are attended by a minority
of individuals whose away -from -home behavior borders on outrageous or is outrageous by most
communities' standards. It would only take a couple of articles about outrageous behavior or
damages to property being rented to "soup" state, region and national reputation.
8. a To be effective I believe that the City of Eagan would need to include a fine with each and
every violation — absent a monetary fine of perhaps $1,000 for the first offense then doubling
that amount with any subsequent offense by the individual(s).
Thus allowing a few individuals to potentially make a few dollars by renting out their residential
property Eagan is risking its safety of many and potentially damaging its reputation.
IiR
With the Viking Stadium being built in Eagan this is an excellent opportunity for the State and
Country to see Eagan — this world class opportunity should not be squandered with nominal
benefits to a few and potentially huge problems for many!
I've attached copies of articles that were found on the Internet that supports my position.
I'm a resident of Eagan for over 28 -years. I'm very pleased with the managed growth of the City
during that time! I've not included my name nor my address as I'm concerned about negative
personal repercussions.
19
LINK: http://www.airbnbhell.com/
Why you should NOT use Airbnb
r 1�
- l E Stay with Roomorama.
Feel at home.
Mgt
AirbnbHell.com is dedicated to helping hosts and guests spread the word about the risks and
dangers of using the Airbnb service.
Here is a list of reasons why you should NOT use Airbnb as a Guest, nor as a Host. At the very
least, beware of these serious issues with Airbnb services and consider other options.
If you are a potential Guest:
1. If any of your personal items or cash are stolen (by the host, other guests, or burglars)
you are 100% out of luck and have no protection.
2. If there is a foul odor, loud noises, or any other problems with your room that are not
easily documented with photos, you are out of luck and your claim .for a refund will be
denied.
3. There is no guarantee how many people might be living in a given home/condo while you
are there. If there is a shared bathroom you might end up sharing it with 1 person, or 20.
4. A "fully stocked kitchen" means very different things to different people. One pot, 2
dishes and a handful of silverware does not mean you can actually cook a meal there, yet
this is not enough evidence to seek a claim for refund
5. If you buy groceries and another guest or the host uses them or throws them away, you're
out of luck.
6. If the host or another guest has a party every night, you will have to thoroughly document
each incident with video recordings and time stamps to seek any sort of claim or refund.
7. Airbnb charges you about 15% on top of what the host actually receives for your
reservation. That means you COULD get your reservation about 15% LESS if you
booked directly with the host.
If you are a potential Host:
1. If your guests claim any sort of insect/pest/vermin problem, airbnb will instantly return
50% of your guests money, even if it's a year long reservation and the claim is false.
2. If your guests steal your cash, airbnb will do nothing.
3. If you make any claim regarding damage to reclaim part or all of the security deposit,
airbnb will make your life a living hell by demanding receipts for your original purchase
even if it's furniture that you've owned for 20 years. If you don't have receipts, you're
out of luck, and even if you do, it will take weeks or months to even get any resolution.
4> Airbnb takes 3% of every reservation from you, but they also take about 15% from the
guest! That means your guests are WILLING to pay 18% more than you're actually
receiving but you're not getting any of that extra money.
5. The "1 million dollar host guarantee" is total BS and virtually impossible to actually
claim. Don't fall for this marketing ploy!
20
The Super Bowl and short-term rentals: Should I stay or should I go?
Considerations for renting out a residence during major events
by Joshua A. Bobich, Esq., Moss & Barnett October 2016
Brace yourself -- the Twin Cities is slated to serve as the center of the sporting universe multiple
times in the next few years.
The Super Bowl takes over Minneapolis (and, undoubtedly, the immediate 20 -plus -mile radius)
at the brand -spanking -new U.S. Bank Stadium (affectionately dubbed "The People's Stadium")
in February 2018. That's the granddaddy event of them all, but not the only major scheduled
event to descend upon the Twin Cities.
The X Games, the top event of those in extreme sports, will call Minneapolis home in 2017 and
2018. The NCAA Men's Basketball Final Four comes to Minneapolis in 2019. And, recently,
Chaska hosted the wildly popular Ryder Cup. This doesn't even include other mainstays, like the
St. Paul -hosted Red Bull Crashed Ice and the myriad other events hosted throughout the metro
area.
With these spectacles come the requisite influx of visitors, all of whom will be clamoring for a
place to call home for a few days, a week or, possibly, a month.
What does this mean to you?
These events present the unique, and potentially lucrative, opportunity for Twin Cities residents
to rent all or part of their home, condo, apartment and maybe even that backyard shed for a nice
little windfall of cash. Early listings show one -bedroom condos in Minneapolis asking for as
much as $4,000 per night during the Super Bowl. Who needs to watch the shivering masses
scurry through the skyways when you can experience the Big Game with your toes in the sand,
sipping something served in a coconut, all the while knowing it's all paid for by your two-week
rental?
Ofcourse, trith till seemingly too -good -to -be -tree sccnarioc; rhere are alivoys the unattractive
realities. Before your clients tot you) decide to rent space through Craigslist or 4irbrtb. consider
the following.
1. The Tax Man cometh -- eventually
Private owners can rent their homes condos townhouses etc., for as man as 14 days in an
calendar year, and any payments received during that period are not included in the owner's
taxable income for the year, no matter how much is earned. However, the owner must also use
the property for their own personal use at least 14 days of that same year. One of the tradeoffs of
using this exception is that the owner cannot deduct expenses or take depreciation deductions
related to the rental because the property is treated as a personal residence and not a rental
21
property. On the bright side, the owner does not need to file a Schedule E because no landlord
expenses or income are incurred from such a rental.
Rent payments generated from rentals of private residences for 15 or more days in a calendar
year must be reported as taxable income by the owner. However, unlike with rentals of 14 or
fewer days, the owner is able to take deductions for "direct rental expenses" and applicable
de reciation but only up to the taxable income generated from the rental of the-Oroperty. If the
owner does have expenses directly related to renting the property that exceed the amount of the
rental income in a particular year, the owner can carry those deductions forward to future years
and apply them to the extent future rental income is generated (again, so long as the private
residence is rented for 15 or more days in such future year(s)).
In addition to potential income taxes, all short-term rentals of fewer than 30 days in
Minnesota are subject to state sales tax (currently 5.875 percent). If the property is located in
Minneapolis, there are additional taxes that also apply, including a 3 -percent entertainment tax,
0.15 -percent Hennepin County sales tax, 0.25 -percent Transit Improvement tax and the 0.5 -
percent Minneapolis sales tax. That means 10.775 percent less of a vacation from the rental
income windfall.
2. Rules, rules and more rules
There are a host of local laws and ordinances that will almost certainly apply to even the most
simplistic short-term rental. Metro municipalities may have rules and requirements in place with
regard to the renting of property, including zoning restrictions, building and housing standards,
and the need to apply for and obtain various licenses. Using Minneapolis as an example, at a
minimum, a short-term rental of a residential space requires the owner to obtain a "bed and
breakfast facility" license, which involves compliance with various zoning, health, housing and
other codes. Of course, not every (any?) person listing a room for rent on Airbnb has obtained
the necessary licenses for the short-term rental of their property. Failing to do so, however, could
subiect the owner to substantial fines or other legal action due to noncompliance Short-term
rentals are a newer trend and applicable laws are constantly chanlg so it is extremely
important to continue to monitor them on a regular basis
Even more restricting and impactful than local law might be restrictions that are in place if the
property is part of a condo or townhome association or cooperative. It has become increasingly
common for these groups to include significant restrictions and, in many cases, outright
prohibitions on the rental of property in their rules, bylaws and/or association agreements. If an
owner violates these restrictions, the association could seek legal action to stop the rental activity
or impose a fine or penalty. For example, one loft complex in the North Loop neighborhood of
Nlinneapilis hati €tlread\ (and paclid ) warned its owners that the will be subiec t to a fine of up
to $5.006 if they choose to rent out their property during the Super Bowl.
3. About that broken stair...
Renting out a residence raises the possibilit\' that a guest could injure him or herself during the
stagy}. Wan accident was to occur and it was bund that the oxyner's negligence in the upkeep and
maintenance of the rented space \\ 'as the cause. all of that rental incOmc couid very quickli end
Lip in the !herds cif a defense attorne\ . No mutter the outcome. litigation is expensive and could
cost the owner much more than just the rent.
Short-term renter's insurance can be obtained through any number of insurance brokers and
carriers, but appropriate coverage might also be available as a rider or endorsement on the
22
owner's existing homeowner's policy. Certain policies also include provisions that allow for one-
off rentals or rentals of certain limited duration. However, before relying on an existing policy,
the policy document should be reviewed in detail and, if possible, confirmation in writing of
the available coverage should be obtained from the insurer. The insurer might have a much
different interpretation of the limits and exemptions on its policy.
Short-term and vacation rental listing services such as Airbnb, HomeAway and VRBO may also
have protection available to those who list on their website. Airbnb appears to be the industry
leader in this category through its Host Protection Insurance Program, which provides up to $1
million of primary liability coverage per occurrence, and a cap of $1 million for each listing
location (subject to certain conditions, limitations, restrictions, etc., of course).
Proceed with caution
There will undoubtedly be multiple opportunities for homeowners to cash in when the bright
lights are shining on the Twin Cities. But, before advertising a home and hightailing it to the
Caribbean, be sure to consider whether it might make more sense to stick around and experience
the spectacle firsthand.
Josh Bobich is an attorney with the Minneapolis law firm of Moss & Barnett, practicing in the
firm's business law, mergers, acquisitions and corporate finance, and technology practice areas.
He is dedicated to achieving business -efficient legal solutions for privately held and family-
owned entities. You may reach him at Joshua. bobich@lawmoss. com or 612-877-5288.
23
1911, k"s: 0(1 ',LVI 100 til_
It 1. A 1 _ l O 11 Y
Airbnb Is Crashing the Neighborhood
Short-term rental websites raise risks for home owners, their neighbors, and communities.
December 2015 1 By Barbara Nichols
There's a good reason every city has zoning laws. They rparatc N-arious types of buildings and
building uses for the mutual benefit of everyone, so people don't have to I i N,e next to a factor, or
a motel. Most cities also have laws related to the minimum rental period for a single-family
house or a multifamily dwelling. In Los Angeles, for example, a residential rental of less than 30
days — called a "short-term rental" — is currently prohibited.
Internet companies such as Airbnb and VRBO pay no mind to such ordinances. They've
swamped the market in California and elsewhere with thousands of STR listings, making the
rules difficult or impossible to enforce. These rental sites appeal to home owners who need
additional income. Then the companies use those owners as examples to coax cities into making
STRs legal. Even though there's clear demand on the part of home owners. that doesn't justify
the many problems STRs cause for the larger community.
Usually, there's no problem with people renting a room in their home, as long as the lease is
longer than 30 days and the home owner is present to monitor the renter's activities. The owner
has an opportunity to check the potential renter's credit, employment, and references. However,
STR websites are calling this type of pre-existing rental the "shared economy" to sell their quite
different concept to cities.
These websites claim that home owners should have the right to Bio whatever they want with
their property — but that's a fallacy. When someone has purchased in a single -faintly or
multifamily zone, they have accepted the rules of that zoning. They do not have the right to turn
their home into a motel (transient zoning), a restaurant, or a factory to the detriment of everyone
else in that zone.
More to Come
STRs are having a dangerous effect on our housing stock. In L.A., a city desperate for more
affordable housing, 11 units of long-term rental housing are being lost daily to STR conversions,
according to a report from the Los Angeles Alliance for a New Economy. The report says people
are converting rent -controlled units into commercial STR operations, and long-term rent -control
tenants are being evicted. The loss of these units in the long-term rental market has driven up
total housing costs for L.A. renters by more than $464 million in the last year. (Read more in this
Los Angeles Times article, "Rental sites like Airbnb aren't as innocuous as they pretend.")
The trend for STRs is awa,, from "shared spaces," where owners are present. Individuals are now
purchasing single-family or multifamiiv units to turn them into STRs cr=acing a business _, to
the considerable detriment of their neighbors. Some short-term renters turn these locations into
part) houses, creating noise. traffic. and a public nuisance. In such instances. neighbors who
need a night "s sleep to work the next day or who have school-age children are disturbed. In my
neighborhood, a home owner leased her property for a year to someone she believed was
24
occupying it, only to learn he listed it on one of the STR rites as a "*commercial para house."
Some 500 people being charged $125 apiece crammed narrow, winding canyon roads by
illegally parking and throwing trash everywhere. When the property owner was alerted, she was
shocked and started eviction proceedings.
STRs pose b g risks for the home on•rers who are leasing their properties: Home insurance
t4Pically covers oniv : ikner-occupied or long-tenp. rental homes. Damage to an STR liket isn't
covered. Airbnb seems to have addressed this problem with its "host guarantee" that offers up to
$1 million for property damage caused by short-term renters, but owners should read the fine
print: Airbnb itself says its policy "should not be considered as a replacement or stand-in
for homeowners or renters insurance." Most notably, it doesn't cover liability at all. The
fine print also suggests that property owners try to settle with the guest first. If no
settlement can be reached, they have to document the damage and submit to a possible
inspection. Airbnb won't cover "reasonable wear and tear" — whatever that means — and limits
compensation for high-value items such as jewehy and artwork. So, real 1%. how much can a host
expect to be protected?
The negative impact of STRs goes far beyond the immediate neighborhoods they're in. Every
region has environmental challenges, and short-term renters who are unfamiliar — or
unconcerned — with those challenges could pose a big threat. California is in the midst of a
severe drought. Imagine if a short-term renter who knew nothing of the threat — or didn't care
— threw a cigarette butt over a balcony onto dry brush?
Worst of all, the growth of short-term rentals has pitted neighbor against neighbor, with
neighborhood organizations joining forces to fight STRs. Some cities are calling for stricter STR
regulations or outright bans, but who will pay for enforcement of these rules? In fairness, STR
websites and their customers should pay the bill. Local taxpayers would prefer to see their tax
revenue used for better schools, roads, and public transit.
Those who support STRs speak of the financial help it has provided and the interesting visitors
they have met. STR hosts say they provide lower-cost accommodations than conventional motels
and hotels. Well, hotels and motels pay taxes and employ millions of people. They are
required to meet public -safety laws, including fire exits, sprinklers, and habitability.
Unregulated STRs are not currently subject to these provisions, and in "hosts" would Like to
keep it that way.
The real estate industry is caught in the middle of a fight between those who oppose STRs and
the property owners and companies promoting them. But practitioners selling real estate should
keep this in mind: A single-family home or condo unit next door to a short-term rental — where
the occupants change every few days — will take longer to sell and bring in lower offers. You
never know who your neighbors could be, and that's a classic situation of property stigma.
In the future, real estate agents could be required to disclose to a seller or long-term renter the
existence of a nearby STR. The California Association of REALTORS® may soon ask its Forms
Committee to add a question to the Seller's Property Questionnaire: "Is your home across from
or next door to a short-term rental?" if agents fail to disclose nearby STRs they know about, they
could open themselves up to a lawsuit by unhappy clients who end up living next door to one.
The real estate industry needs to take a stand to protect residential zoning laws against STRs.
Without this protection, property values will decline and cause neighborhood stress and
disruption. Real estate agents Ax ill have another obstacle to overcome in marketing properties and
could expose themselves to liability. Saving our communities and protecting our propert% values
25
is the mission Of Our industri _ i ha -°e worked hard as a real estate broker to pa,," for mY hone of
2.9 vear . I diel not ouv in a transient motel zone and do not believe that the profit motives of
these short-term rental companies and a few property owners should be allowed to negatively
impact my home's %clue. peace and quiet. and safety.
Related Content:
R r
VI
• F
Barbara Nichols
Barbara Nichols of Nichols Real Estate & General Contracting is a broker, contractor, expert
witness, and author of "The No Lawsuit Guide to Real Estate Transactions." She can be reached
at 310-273-6369 or at www.barbaraniebols.net..
26
10 incredible Airbnb horror stories
Published May 08, 2014 FOX NEWS
http:/Iwww.foxnews.com/travel/2014/05108/10-incredible-airbnb-horror-stories html
To some, Airbnb.com is one of the greatest things to happen to the travel industry in recent times. It's the
prime example of how the new "sharing economy" is going to change everything. People offer apartment,
house or even couch stays on the site for rent. Its so much more interesting than hotels, it is the best
way to experience a destination, a fantastic way to meet new people.
It definitely can be all of those things, sure, but some users of the site brush up against the harsh reality
'that in many ways, Airbnb is far from perfect.
Let's start with the elephant in the room: In many cities, Airbnb is flat out illegal. You can actually be
evicted during your stay — its happened — and your host could find themselves on the street, right along
with you (this has also happened).
Then there's the too -infrequently reported fact that Airbnb routinely collects up to 12 percent in fees from
users on every single booking, which can amount to the cost of a hotel night in many cities. (Hosts pay a
kinder, gentler three percent, by the way. Why? Because the last thing Airbnb wants to do is discourage
hosts from signing up. Too bad users aren't as valued.)
Then there's the business of the site setup itself — I've personally spent far too much time searching for
places to stay, only to find that the owner won't respond to emails, or that they aren't even renting the
property anymore and "forgot to take down the listing."
I also know of users who have booked — and paid for — apartments listed as completely private, only to
find them anything but. I've heard of hosts informing guests halfway through their stay that they're moving
the guest across town, with no compensation for the hassle. As is to be expected when you book into a
stranger's home (or, when you rent your home out to strangers), things can get plain weird.
Stories of such weirdness are everywhere — here are just ten cautionary tales. Photos are stock not
actual.
1. The orgy
27
New York comedian Ari Teman rented out his modest garden apartment in the Chelsea
neighborhood of Manhattan earlier this year for what turned out to be a full-blown orae, titled
"Turn Up Part 2: The Pantie Raid." Teman was reportedly evicted almost immediately by building
management.
40 2. The meth addicts
Troy Dayton rented out his home in Oakland, Calif. to a young woman who turned out to be a
meth addict and who trashed his home and stole his birth certificate. A request to Airbnb to have
his birth certificate replaced and the damages covered was ignored; he was eventually
begrudgingly given some site credit.
3. The crime scene
t t :'FIT 'i,,.
Publicist Jessica Penzari rented her Midtown Manhattan apartment this past month to a woman
who told her she was military, looking for a little R&R; Penzari was alarmed to receive a call from
the cops to alert her that a woman (who turned out to be a prostitute) had been slashed by a man
(who turned out to be a john) in a dispute over the cost of services. Airbnb put her up in a hotel
and sent a professional cleaning service.
4. The sudden eviction
28
Matt Lynley moved to New York ready to take over the world — but first, he'd come face to face
with some of Airbnb's greatest weaknesses. He reportedly wound up having his reservation
cancelled when an owner wouldn't verify a booking (that's part of Airbnb's system), and as a
result had most of his cash tied up in the pending room charge. Lynley ended up finding another
place, but was out the money until Airbnd refunded it.
• 5. The fraudulent rental
A California man was enjoying his rental in Berlin when a knock came at the door from a man
who professed to be the real owner of the unit, wondering what was going on in the apartment.
"This guy with a thick Russian accent knocks on my door, demanding what I'm doing in his
house. For a moment I thought I was in a bad 80s movie," he said at the time.
6. The watershed moment
Back in 2011, a San Francisco woman came home after a week away to find her apartment
ransacked and trashed; a very public battle with Airbnb ensued; executives eventually apologized
on the record — the incident lead to the creation of the site's current host protection policy -
7. The soiled penthouse
29
Recently, Rachel Bassini rented out her Manhattan penthouse to an unassuming guy named
"Jeffery," who had a profile picture of him looking perfectly normal, with a wife and young child.
Jeffery turned out to be the host of a party that left her gorgeous apartment in ruins, covered in
condom wrappers and bodily fluids and, er, excretions.
8. The pop-up brothel
Two Stockholm women handed over the keys to their apartment only to find eventually that their
flat was being used as a brothel. How'd they find out? The police alerted them that their home
had just been raided — two working girls had been caught in the act.
41 9. The competitive landlord
Chris Dannen quickly racked up nearly $20,000 in bookings on his Brooklyn apartment, so he
was curious when everything suddenly went quiet. One culprit: His landlord had decided to go for
Kc
a piece of the action, renting out rooms in a nearby building. Dannen was soon served with a
restraining order, requiring him to stop renting and to evict current tenants. He was later evicted
as well.
e 10. The bait and switch
t
A California woman was excited to find a reasonably -priced rental in Austin, Texas during an
event weekend, making the 50 percent down payment and counting her good luck. Out of
nowhere, the host emailed to say that they'd forgotten it was a busy weekend and that the rate
was actually three times what she'd agreed to pay, leaving her in the unpleasant situation of
negotiating her way out of the booking and struggling to find alternate accommodation on one of
the busiest weekends of the year.
Of course, hotels aren't always perfect either. They can overbook and "walk" you, although they
at least they pay for the night at the alternate hotel they provide. I did try booking on Airbnb a few
times, but each and every time I was either rejected by the landlord or canceled at the last
minute. I'd rather stay in a nice Hilton Garden Inn, any day.
31
Airbnb Is Said to Seek $1 Billion More in Financing
By: Mike Isaac
2 Hours Ago, The New York Times, June 18, 2015
Source: Airbnb
Silicon Valley's elite start-ups have been on a fund-raising tear, and Airbnb has become the latest to try to
add to its cash pile.
Airbnb, which lets users list their homes and apartments for short-term rentals, is in talks to raise $1
billion in venture capital, according to a person close to the discussions. The financing round would value
Airbnb at $24 billion, said the person, who spoke on condition of anonymity.
If the financing closes, Airbnb will more than double its valuation of $10 billion from just over a year
ago. The company has garnered nearly $800 million in funding to date from investors including Sequoia
Capital and Andreessen Horowitz.
The future of Airbnb Brian Chesky, Airbnb CEO, discusses the advantages and disadvantages to being a
public company and what makes Airbnb unique.
A spokeswoman for Airbnb declined to comment.
Airbnb's funding talks, which were earlier reported by The Wall Street Journal, are another example of
the fast growth and interest in so-called on -demand start-ups, many of which are seeking hundreds of
millions of dollars and ever -climbing valuations in their quests to upend existing industries.
Airbnb is using its riches to take on hospitality giants like Marriott and Hilton Worldwide. Companies
like Uber and Lyft, which have created ride -hailing smartphone applications, are fighting long -entrenched
incumbents in the taxi and limousine industry. Uber has raised several billion dollars in just the last year
and has been in talks to raise about $1.5 billion at a $50 billion valuation.
Airbnb is projecting approximately $900 million in revenue over 2015, according to the person close to
the company.
Read More Airbnb horror story leaves Calgary home a wreck i.INK to Website Below
Airbnb has faced regulatory and insurance hurdles on a state -by -state basis, while simultaneously battling
hotel companies that see the young company as a growing threat. Last year, the office of Eric T.
Schneiderman, New York's attorney general, released a report saying that nearly three-quarters of Airbnb
rentals in the state were illegal and violated zoning or other laws.
32
Airbnb, which was established in 2008, now has hosts offering their homes for rent in more than 34,000
cities and 190 countries around the world, according to the company. It says more than 25 million people
have signed up to use its service.
Airbnb nightmare renters leave Calgary home trashed
LINK: kitty://www.cbc.calnews/canadatcalgarylarbnb-niahtmare-renters leave cainary home -
trashed -1.3053555 —
Family finds condoms plugging toilets and chicken drumsticks in shoes
CBC News Posted: Apr 29, 2015 9:33 AM MT Last Updated: Apr 30, 2015 6:32 PM MT
Related Stories
Airbnb to be targeted in Quebec bill
Banff cracking down unlicensed vacation properties
A Calgary family says their home has been destroyed by guests who rented it on the popular
accommodation website Airbnb.
"Our hardwood floors are all popping because there are pools of liquor. There's glass shards,
there's dent in our walls, toilets flooded and plugged with condoms," said homeowner Star King.
King says she agreed to rent her house in northwest Calgary to four adults, who said they were
in town for a wedding.
She and her husband, Mark, turned their keys over to the renters on Saturday night and went to
stay with their in-laws in another part of the city.
King says shortly after, she started receiving texts from neighbours, telling her the police had
arrived.
She was told that a "huge luxury party bus pulled up" and 100 people piled into her home.
The King family had to plead with the renters to pack up and leave, who she said were "just
totally wasted."
33
"They just put their cigarettes out wherever they felt like it," said Star King. (Mark King)
"They threw paint all over my works that I was going to sell for probably a couple thousand. Just
totally disrespectful behaviour," said King, who is an artist.
'We came and wished the home was burnt down to ashes. It would have felt way better.'- Star
King, Airbnb host
She overheard Calgary police at the scene describe the situation as a "drug-induced orgy."
Airbnb spokesman Jakob Kerr says the company has banned this guest from renting again
through the website.
' � Y
34
Mike and Star King survey the damage in their home, which was vandalized over the weekend.
(CBC)
"We have zero tolerance for this kind of behaviour and our team is working quickly to make this
right," Kerr wrote in an email statement.
"Over 35 million guests have stayed on Airbnb, and property damage is extremely rare."
Quebec is already looking into beefing up rules surrounding rentals to tourists without a
permit. Next month, the province plans to table a bill to regulate online home -sharing services,
such as Airbnb.
• Airbnb to be targeted in Quebec bill
■ Unregistered B&Bs given pass in N.S. amid clampdown
The King family says they had no issues when they rented out their house two weeks before
through Airbnb and have also used the service, many times, themselves.
"We came and wished the home was burnt down to ashes. It would have felt way better," said
King.
The Kings found their couch cushions thrown on the floor in their kitchen, covered in
mayonnaise. (Mike Symington/CBC)
Airbnb has told CBC News that the King family will be reimbursed through its Host
Guarantee insurance, which provides up to $1 million "to eligible properties in the rare event of
guest damages which are not resolved directly with the guest."
The company also says its offering full assistance to law enforcement in the investigation of
the incident.
Calgary police are investigating and estimate the damage is more than $50,000.
"In the 27 years of policing that I've done, I've never seen a home so badly damaged from a
weekend party, and of course, with this kind of rental situation," said Staff Sgt. Jim Leung.
35
Leung says police are trying to locate the man who originally rented the property and intend to
charge him with mischief over $5,000 for causing damage to the property.
RR
A.Liabihty Risk for Airbnb Hosts - The New York Times
YOUR MONEY
https://nyti. ms/12JOyQQ
https:i/www.nytimes.com/2014/12/06/your-money.lairbnb-offers-hom eo...
A Liability Risk for Airbnb Hosts
Your Money
By RON LIEBER DEC. 5, 2014
Over the last few years, Uber and Airbnb have come to be known as leaders of
something called the sharing economy.
Give their founders credit for this feat of mostly misplaced nomenclature. The
companies help people sell rides in cars and rent stays in homes; they deserve no
more credit for promoting a skill learned in preschool than Marriott or taxi
companies.
But here's one thing they do love to share: risk. Uber grew by heaping it on
many drivers, asking them to push damage claims through their personal insurance
companies while knowing that those companies did not cover commercial activity.
And now comes Airbnb with its free $1 million liability coverage that will cover
the hosts for its tens of thousands of United States listings. How can it afford to
provide this for nothing, to everybody? Well, it is "secondary' coverage, which
means that it, too, wants hosts to push any claims for guests' injuries and deaths
through hosts' own insurance companies first.
So how might that work in practice, or would it at all? This week, I sent 17
37
of 5 7/21117, 2:52 PN4
A Liability Risk for Airbnb Hosts - The New York Times
https:/fwww.nytimes.corn/2014!12/06/your-money,airbnb-offers-hom eo...
questions about Airbnb's move and short-term rentals in general to the biggest home
insurance companies in the United States as ranked by SNL Financial. One thing
came through loud and clear from the handful of companies that did not dodge my
inquiries entirely: Most homeowner's and renter's insurance policies do not cover
regular commercial activity in the home.
"If you're conducting a business, on a full- or part-time basis, by renting out your
home or apartment (or a room in your home or apartment) as a way to earn money,
your homeowner's or renter's insurance policy probably would not provide liability
coverage," said Rebecca Hirsch, a USAA spokeswoman, in an email.
Here's what Oregon's insurance commissioner had to say to Airbnb hosts in a
September consumer advisory statement: "Homeowner policies generally do not
provide coverage for business use."
Insurance companies are not fond of liars either, nor of people who
conveniently neglect to tell them that they are running a small-scale hotel. "An
insured has the obligation to be forthcoming about all facts relating to his/her
insured property. Not doing so could impact coverage and jeopardize the
continuation of insurance," said Laura Strykowski, an Allstate spokeswoman.
So why would Airbnb offer secondary liability coverage at all if it knows that
most hosts' primary insurers frown on their getting into the hosteling business?
Three reasons. First, it had to do something, and fast; there's a new ordinance in San
Francisco requiring hosts to have at least $500,000 in liability coverage. Hosts
probably would not have gotten their acts together without the company's help.
Second, it knows that some insurance companies have exceptions of various
sorts. Allstate allows people to rent out their home for a week or two while still
maintaining liability coverage for people who stay there. Ms. Hirsch of USAA said
that for people who "very occasionally rent a room out (as opposed to doing this as a
business), liability coverage may be available." Chubb offers coverage as long as
you're not taking in more than $15,000 a year in rental income, which it believes is
.+n.�t.n r•.�r.n..n...• i�+n .+ w. r.ni..iti. r.... iwn•••+n..n� .•s..w. •�n.•.nn
The Times Sale. 50% off for orae year. ND . Subscriber login
38
2 of 5 7/21/17,2:52 PM
A Liability Risk for Airbnb Hosts - The New York Times https://www.nytimes.com/2014/12106i row-money/aifbnb-offers-hom eo...
involved and exploit loopholes. Hey, it could all work out well for Airbnb, at least
some of the time, right? Clearly, the company thinks it's worth trying.
The third reason is more basic: It would cost Airbnb enormous amounts of
money to offer primary coverage to every host. How much? Well, consider the efforts
of its competitor, HomeAway. That company encourages its own hosts to purchase
primary coverage for their rental properties, an offering that it refers to as
HomeAway Assure.
Scott Wolf, president of the program division for CBIZ Insurance Services,
which provides the Assure policy, broke the host's cost down: For a $Y million, four-
bedroom home with contents worth $ioo,000, the annual cost of coverage would be
about $3,000, which includes any damage, liability coverage and replacement of
rental income in case the home is temporarily uninhabitable. Most Airbnb properties
are worth less than this, its hosts may rent only part of their homes and do so less
often, and the company would get a bulk discount if it were to buy coverage for all of
them. Still, multiply that times 800,000 listings and it's easy to see why it's out of
the question for Airbnb to hand out primary coverage to everyone.
So why doesn't the company do what HomeAway does and. offer hosts the
option to buy a ready-made primary insurance solution for their renting activities?
"We wanted the experience for our hosts to be automatic and easy and offer real
peace of mind," said Jonathan Golden, the Airbnb product leader who has been
working on insurance issues for over three years, "versus going to another site and
potentially having to purchase another policy."
Free is indeed appealing to hosts who feel the pain every time Airbnb takes 6 to
12 percent of their revenue as a fee. "I'm pretty happy they're offering something,
given the percentage they're taking," said Crystal Bradshaw, who has two listings in
Paso Robles, Calif., on the site that she manages with her husband, Justin. (They
once hosted me at a different listing in Burbank, Calif.) "At least as a host; I'm
getting something back."
Krli.i`. —Arne +* rr --- nF}wnnii�rn +m 6^v+ -F-- + AinI.n"k " 14" V.nAn}.nt.r nAA^A
The Times Sale. 50% off for one year. V Subscriber login
39
3 of 5 7/21/17, 2;52 IYNI
A,Liability Risk for Airbnb Hosts The New York Times https:/iwww.nytimes.com/20]41'12/06/your-mmey,airbnb-offers-homeo...
insurance? One reason it has taken so long for Airbnb to offer liability coverage is
that insurance company actuaries aren't fond of underwriting anything until they
have years of data on death, dismemberment, drownings, compound fractures,
crushings and the like.
Airbnb shared that data with its underwriters (who are making the company pay
an unspecified deductible before any coverage kicks in), but the company would not
share it with me. "Over 26 million guests have had a safe and positive experience on
Airbnb, including over 16 million in 2014 alone," Jakob Kerr, an Airbnb spokesman,
said in an emailed statement "We respect our hosts' and guests' privacy and do not
comment on questions like these." When I responded that disclosing the raw
number of accidental deaths and injuries violates no one's privacy, he said he did not
have anything to add.
Mr. Wolf, the insurance executive, said that he budgeted for $2 million in
liability claims each year on the 7,000 rentals he insured through the Assure
product. If each of those is occupied 18o nights each year, that means $i million in
claims for every 630,00o nights of occupancy each year. Guests can feel good about
those odds. Busy hosts might be less comfortable. Airbnb, with its 800,000 listings
at any given time, has more to worry about.
Everyday consumers who neither host nor stay at Airbnb units may think this
has nothing to do with them. Chubb, however, sees it differently. If Airbnb succeeds
in sharing risk with personal insurance companies, then everyone's premiums have
to rise to cover it. "If you don't underwrite appropriately, it drives up prices for the
average homeowner," said. Christie Alderman, a vice president for Chubb Personal
Insurance.
Insurance companies could solve this by asking all policyholders about their
hosting habits, but none of the 10 I contacted said that they had made any changes to
their policies as home -renting has grown. They should ask.
As for Airbnb's hosts, they have a few choices. They can simply tell their
in �.+nnni.n n.�r..r�.�r+inn nsr+...F�.s:. ti. nF Fl.rs r�.....ani►..+ ..rtn �..�. +r <.rl+nt i��+n i«. n......-e.nn
9 The Times Sale. 50% off for one year., SAVE NOW Subscriber login
40
4 of 5 7/21117, 2:52 PM
k1i4bility Risk for Airbnb Hosts - The New York Times
Mips://www.nytimes. corn/2014/12/06/yow-moneyiairbnb-offers-horneo...
tiny fraction. Or they can buy a vacation home-rental/landlord policy from a
company like CBIZ, which offers it on its website.
Option 3 is to cross their fingers and hope that Airbnb's liability backstop will
work as advertised. Those who are tempted by this should keep something in mind:
The company that now wants hosts to trust it is also the one that built its business by
providing a platform for those same hosts to violate all sorts of local ordinances on
short-term lodging all over the world. Some of them got into trouble by doing so.
When a serious injury or death occurs at a host's home and the host's
homeowner's policy denies the claim because of the commercial activity the host was
engaged in, will Airbnb be there when the lawsuits start flying? We're about to find
out. And it will be a telling test of just how much the company has truly grown up.
Twitter:@ronlieber
Elisa Cho contributed research.
Make the most of your money. Every iWonday get articles about retirement, saving for
college, investing, new online financial services and much more. Sign up for the Your
Money newsletter here.
A version of this article appears in print on December 6, 2014, on Page 61 of the I Jew York edition with
the headline: A Liability Risk for Airbnb Hosts.
® 2017 The New York Times Company
9 The Times Sale. 50 off for one year.
Subscriber 14gin
41
5 of 5 7/21/17,2:52 PM
?� couNTp
President, Board of Supervisors ��r °� City and County of San Francisco
District 3
1i•350,J51
DAVID CHIU
bK
Short -Term Rental Regulation Summary
Supervisor David Chiu introduced legislation to regulate short-term rentals. The legislation reinforces the
prohibition against the conversion of residential housing into full-time de -facto hotels. It would only
allow primary residents that live in their apartment to rent short-term on a limited basis to help
supplement their housing costs. Secondary or vacation homes that do not have permanent residents
occupying them would not be granted permission, so that the residential housing stock is protected in the
midst of the current affordability crisis.
CORE COMPONENTS OF LEGISLATION
Primary Residency
Resident must live in the unit as their primary residence for no less than three-quarters of the year.
Registration
Resident must apply for permission every two years by providing documentation to demonstrate that they
meet primary residency, insurance, and tax requirements. Resident must maintain good standing by
complying with all city laws, including rent control laws, or their permission would be revoked and the
unit would be placed on a blacklist.
Taxes
Resident must pay transient occupancy taxes on short-term rental activity, and hosting platforms must
collect and remit those taxes, or be subject to enforcement by the Treasurer's Office.
Insurance
Resident must maintain liability insurance or be covered by hosting platform insurance policy.
Private Contracts
Resident must adhere to the terms of their private contracts. Application does not interfere with leases,
homeowner association agreements, and covenants, conditions or restrictions on the property.
Enforcement
Residents that fail to register, violate the terms of their permission, or don't maintain good standing are in
violation. Hosting platforms that fail to notify their users of short-term rental laws and collect and remit
taxes are in violation. Complaints alleging violations of the law would be investigated and deliberated
through an administrative hearing. Violations are subject to administrative and civil penalties.
42
AMENDMENTS TO THE LEGISLATION
Following hearings at the Planning Commission and Land Use Committee and deliberation by the Board
of Supervisors, Supervisor Chiu and his colleagues amended the legislation to strengthen enforcement,
protect affordable housing, maintain quality of life in neighborhoods, and ensure building safety.
Strengthening Enforcement short-term renting from short-term renting. (Planning
Enforcement Agency -Consolidate enforcement Commission recommendation; Chiu/Kim amendment)
function from two agencies into one with the Planning Single -Family Homes - Include single-family homes in
Department. Planning would administer registration, regulation by requiring registration for permission and
investigate violations, and report annually to the Board compliance with residency and all other good standing
of Supervisors. (Planning Commission requirements. (Planning Commission recommendation,
recommendation, Chiu amendment) Chiu amendment)
Registration Number - Require Planning Department
to issue registration number to accompany approvals,
and require resident to include registration number with
all short-term rental postings. (Planning Commission
recommendation, Chiu amendment)
Annual Self -Reporting - Require resident to report
number of days of short-term activity annually to
maintain good standing on registry. (Planning
Commission recommendation, Chiu amendment)
Multiple Violations - Raise administrative penalties for
repeat violations, so that fines are doubled for second
offenses and tripled for third and multiple offenses.
Violations that are not corrected would have permission
revoked. (Chiu amendment)
Online Advertisements - Deem posting online
advertisements without registering for permission as
violation subject to administrative and civil penalties.
(Planning Commission recommendation, Chiu
amendment)
Interested Party - Include homeowner association and
property owner in definition of interested party allowed
to file lawsuit after violation is rendered through an
administrative hearing. (Kim, Farrell amendments)
Funding - Require annual evaluation of application fee
to assess administration and enforcement costs, and
include Planning Commission hearing in evaluation.
Direct all administrative and civil penalties back to
Planning to fund enforcement. (Planning Commission
recommendation, Chiu amendment)
Protecting Affordable Housing
Affordable Housing Exclusion - Exclude single room
occupancy hotels, below market rate units, and any
subsidized housing with restrictions on subletting and
43
Principal Residence - Define principal residence as
one residential unit that is associated with one
permanent resident. Registration is allowed for only one
permanent resident per unit. (Chiu amendment)
Maintaining Ouality of Life
Code Compliance - Require compliance with Police,
Health and Public Works Codes for approval and good
standing. Permission is revoked if any outstanding
noise, dumping, and other quality of life violations.
(Planning Commission recommendation, Chiu
amendment)
Ensuring Building Safety
Liability Insurance — Increase coverage requirement to
$500,000 and require coverage to indemnify tenant and
owner for bodily harm and property damage. (Planning
Commission recommendation, Wiener/Farrell
amendment)
Property Owner Notification - Require Planning to
notify property owner and homeowner association if
tenant or homeowner has completed an application to
rent short-term. (Wiener/Farrell amendments)
Code Compliance - Resident must be in compliance
with Building and Fire Codes to be granted permission
and maintain good standing. Permission is revoked if
any outstanding building, electrical, plumbing,
mechanical, fire, health, housing, or planning code
violations, including notices of violation, notices to
cure, orders of abatement, cease and desist orders, or
other correction notice. (Planning Commission
recommendation, Chiu amendment)
Fire Safety Posting - Resident must post fire safety
information in their unit like location of fire
extinguisher, alarm and exits. (Cohen amendment)
E�OY
,..,.
MINNESOTA
a
Eagan Convention & Visitors Bureau
Research Prepared for the 7/11/17 Eagan City Council Workshop
Research Topic:
Impact of Airbnb Industry on Tourism and Eagan's Hospitality Community
Overview:
Since its inception back in 2008, the Airbnb phenomenon has grown exponentially from
a few hundred rentals in a handful of cities into its current inventory of over 3 million
lodging listings in approximately 65,000 cities worldwide. While the Airbnb industry has
richly rewarded countless homeowners and provides convenient and incredibly
affordable accommodations to millions of travelers, a host of issues ranging from health
and safety concerns to crime, privacy and tax avoidance fears have also surfaced. As
Eagan and municipalities across the nation look to regulate the Airbnb industry, we've
explored the topic from a tourism point of view and have gathered some information
which you'll hopefully find useful as you revisit our local regulations.
Airbnb Impact on Eagan's Hospitality Community:
Given that only a handful of Airbnb options have surfaced in and around the Eagan
area during the past 9 years, the effect from an economic impact standpoint has been
virtually nonexistent. From a tourism perspective, as you can imagine, we currently see
it doing very little in terms of bringing additional tourists
to our destination.
Concerns Raised by Eagan Hotel Owners and General Managers:
While our destination currently has little to offer on the Airbnb front, we feel it would be
naive to ignore the fact that Airbnb options are fairly popular along the East and West
Coasts of the country. Given this, we've spoken to a number of our Eagan hospitality
community leaders about how they would feel if an abundance of Airbnb options would
begin surfacing in our region. Here's a summary of the main concerns that were shared
with us:
Owners and general managers of our 16 Eagan hotels pride themselves on
guest safety. The fact that the average Airbnb is currently not held to the same
strict safety standards to which all of our Eagan hotels are held is a concern. In
addition to state and local regulations, all of the brands representing our Eagan
hotels also perform their own rigid inspections aimed at making certain guests
enjoy a safe and comfortable experience while staying in Eagan. Should the
Airbnb inventory begin growing exponentially in Eagan, this could potentially
become a huge issue of fairness.
44
Another concern shared by our hospitality leaders centers around our overall
Eagan brand. Our hoteliers are very proud of the high standards they're all held
to as exemplified by the myriad renovations and other exciting improvements
that are always taking place in an effort to keep our destination vibrant. Heaven
forbid, if a serious injury or death would ever occur resulting from an Airbnb stay,
our stakeholders would be very concerned about the negative PR Eagan's entire
hospitality community would receive from a safety concern standpoint.
• Hospitality leaders also feel Airbnb's go far beyond the boundaries of simply
"renting a room." Should the concept truly catch on in our region, the feeling is
that they should be considered more on par with bed and breakfasts and that
lodging tax would need to be collected.
National Trends:
As cited above, Airbnb options in more populous regions such as the East and West
Coasts continue to be prevalent. However, the Midwest continues to maintain far fewer
options while also posing more regulatory hurdles for Airbnb hopefuls. Areas such as
Chicago are making it more difficult for Airbnb owners to do business citing pushback
from neighborhoods and hospitality leaders. While the majority of tourism experts
seem to think that the Airbnb inventory will continue to grow, they also feel more
regulations, inspections and tools used to combat privacy concerns will also be
introduced.
How Other Area Communities are Handling Airbnb Growth:
St. Paul: The Capital City recently proposed rules which would limit the number
of people allowed to stay in a home and how many apartments or condominiums
people could rent out in a building. Property owners would have to follow zoning
and licensing rules, pay sales and lodging taxes, have appropriate insurance
and, in some cases, a fire certificate of occupancy.
Burnsville: Burnsville's ordinance effectively bans Airbnb: According to their
ordinance, "rental of private homes for temporary occupancy threatens the
essential character and stability of residential neighborhoods because short-term
tenants have little interest in the welfare of the local community." It also states
that this type of rental "is often undertaken without adequate on-site
management, compliance with state and local codes for commercial lodging
establishments, and other safeguards for those renting the home."
• Lakeville: While Airbnb business is allowed in Lakeville, homeowners who rent
single-family homes for short periods of time must abide by a set of regulations
that include prohibiting more than two separate rentals within a 30 -day period.
• Savage: The Savage City Council passed an ordinance barring anyone from
renting their homes out for fewer than 15 days taking the possibility of an Airbnb
off the table.
45
• Apple Valley, Blaine, Stillwater and Woodbury all consider homes "single-
family dwellings," effectively forbidding an Airbnb from existing in these
communities.
Future Trends:
According to airbnbcitizen.com, "a regulatory pattern is emerging from our
conversations with policymakers—that they frequently divide home sharing into three
categories: 1) shared spaces, 2) primary residences, and 3) vacation rentals and
commercial accommodations. Generally speaking, governments are creating light -touch
home sharing rules for shared spaces and primary residences, and more significant
frameworks for vacation rentals and commercial accommodations. This pattern of light -
touch regulation of shared spaces and primary residences reflects elected officials'
growing appreciation of how Airbnb creates economic opportunity for working families."
This statement certainly coincides with our research – the emerging patterns seem to
be municipalities either taking a hardline stance against potential Airbnb operators or
they're exploring creative ways in which Airbnb's can potentially and legally coexist with
existing hotels and neighborhoods – there does not seem to be any middle ground
whatsoever.
Contact Information:
Needless to say, the Airbnb industry is ever -evolving and poses a unique set of
challenges to Eagan and countless other communities. We stand ready to assist in any
way we can and would be happy to answer any additional questions you may have
about this topic. Best of luck with your policymaking.
Brent Cory, President/CEO
Eagan Convention and Visitors Bureau
Phone: 651-675-5544 (direct)
Email brent@eagammn.com
46
Dougherty
Molendall
Solfest, Hills & Bauer P.A.
MEMORANDUM
To: Mike Ridley, City Planner
From: Sharon Hills, City Attorney
Date: 4/2/2015
Re: B&Bs and Vacation Rental Home Regulations
14985 Glazier Avenue
Suite 525
Apple Valley, MN 55124
(952) 432-3136 Phone
(952)432-3780 Fax
www.dmshb.com
On March 4, 2015, Jon Hohenstein sent an email with several questions relating to the regulation
of bed & breakfast or similar lodging operations within residential homes/condos. The following
are Jon's questions with my responses immediately following.
• Do any of the conclusions change if the transient lodging is an Airbnb unit v. a more
substantial, traditional Bed and Breakfast? That is, if it is essentially one room, bedroom
or suite in a residence that is rented for less than 30 days at a time? If yes, how do they
change? If no, then ...
ANSWER: The focus is the operation, not the amenities offered to the traveler, for purposes
of the city's regulations for zoning or lodging tax: Lodging offered in a single family home,
whether it is a single room or the entire home, to a transient occupant (i.e. traveler) in
exchange for money/consideration. Any property or any portion therein offered for short-
term rental to transient occupants (travelers) falls within the same type of activity and needs
to be treated similarly. Whether food is offered does not change the commercial lodging
operation on the property for zoning purposes, albeit the offer of food to the guest, whether
it is breakfast or dinner, will trigger state health code requirements.
• A traditional hotel is subject to periodic fire inspections, health inspections and possibly
other requirements; would those also be required of a B&B?
ANSWER: Yes, a "bed and breakfast" establishment is subject to a state restaurant license
and state "hotel/motel" license, subject to various health and safety requirements and
inspections by the state. A vacation rental home or home with rooms for rent to travelers
that provide food to the guest, even if the operation is not referred to or name as a "bed and
breakfast" would fall within the Minnesota Dept. of Health's statutory definition of "bed
and breakfast" establishment for purposes of licensing. A licensed B&B is allowed to only
serve breakfast.
However, please be advised the state statute and Minnesota Rules are not clear if or when a
state license is required for a vacation home rental or overnight accommodations of rooms
47
April 2, 2015
Page 2 of 3
or "suites" offered to the public within a home when no food is provided. Our review of the
state statute and Rules leads us to conclude that a license may be required depending on the
length of the rental. For example, rental of a room or rooms for sleeping accommodations
offered to the public for period less than a week would fall within the definition of
hotel/motel lodging which requires a license, or if the owner provides rent for periods of one
week or more, and having five or more beds to let to the public, then it is a "lodging
establishment for which a state license is required. But the statute and Rules do not cover a
scenario when the owner rents out the entire home as a "vacation home rental" for less than
a one-weekperiod or rents out a room to a traveler for 8 days so the period is not less than a
week. Further the Rules refer to a "lodging house " in its safety regulations and license fee
provisions, but neither the statute nor the Rule defines the term, "lodging house. " It appears
that these are unintended gaps in the legislation.
Regardless, the city may include any type of operation providing lodging accommodations to
the public in residential uses in its licensing or zoning regulations under the Ciiy Code. It
may also adopt the state health Rules to apply to any and all of the lodging types regulated
by City Code.
Would any property providing transient lodging need to conform to ADA
requirements? Are there other similar building standards that .would apply to transient
lodging properties?
ANSWER: Depends. Under the ADA, "hotels, motels, inns and other places of lodging
designed or constructed after January 26, 1993, " must comply with ADA standards. The
ADA rules do not apply if the house was occupied prior to January 26, 1993 and no
construction or building permit has been issued since that date. Also, the ADA standards
apply only to those portions of the home that are used by the guest, including front entry
ways. In short, the application of the ADA rules will be case specific to each operation.
However, if a state license is required, the state regulations will dictate ADA, building code,
fire code, etc. compliance.
• Are there other lodging requirements in statute that would apply to B&Bs? Are those
different from what would apply to hotels or other lodging facilities?
ANSWER: The lodging standards or requirements under the state statute and Rules are
applicable to licensed lodging operation. Hence, those applicable hotels are applicable bed
and breakfast operations. Additionally, all licensed lodging establishments are subject to the
same fire and health inspections.
• If food is served, would a B&B need to have a restaurant license? Does it matter how
many rooms it has or how many meals are served?
ANSWER: Yes, a license is required—see first bullet above. Any lodging establishment that
serves food or beverage or both to its guests must obtain a "restaurant/food license" from
the Minnesota Department of Health. The number of guests or number of meals served has
www.dmshb.com Dougherty
Molenda
48 Soffest, Hills & Bauer P.A.
April 2, 2015
Page 3 of 3
no relevance to a license requirement. It's merely whether food or beverage is served to
guests. However, the number of guests that may be accommodated, not number of rooms,
dictates the extent of health department requirements (e.g, small, medium or large
establishment dictates type of kitchen facilities).
In closing, we note the following considerations for the City in addressing bed & breakfast
operations or any other lodging accommodations offered to the public in residential dwellings:
• Lodging accommodations in residential dwelling to travelers (the public) for
consideration ($$) for short term, whether it be for overnight or a week or two weeks, is
a commercial operation in a residential district. It is not a permitted or conditional use in
Eagan's residential districts.
• Any home or rooms therein offered to the public for sleeping accommodations falls
within this commercial lodging operation. It is irrelevant whether the operation is a
"traditional B&B," a single room or several rooms without any breakfast offered, or a
"vacation home rental"—all three provide overnight lodging accommodations to the
public for money and thus, all are commercial lodging operations.
• These lodging accommodations are subject to the Eagan lodging tax and the tax must be
imposed and collected.
• A bed and breakfast operation is subject to a state restaurant license and a lodging license
which have state performance standards and inspections. The other types of home rental
operations may be subject to state lodging license. The city may regulate all home
lodging accommodations to ensure all are subject to the same rules. The city may
regulate by license, conditional use permit or both.
• If the city regulates, then it must decide conditions/regulations of the operation.
www.dmshb.com DoughertyMalenda I
49 Solfest, Hills & Bauer PA.
Sterling Codifiers, Inc.
Disclaimer:
Page 1 of 7
This is provided for informational purposes only. The formatting of this ordinance may
vary from the official hard copy. In the case of any discrepancy between this ordinance
and the official hard copy, the official hard copy will prevail.
ORDINANCE NO. 1445
CITY OF BURNSVILLE, MINNESOTA
AN ORDINANCE AMENDING CITY CODES REGARDING AUTHORIZING
AND REGULATING SHORT TERM HOME RENTALS AS HOME OCCUPATIONS
THE CITY COUNCIL OF THE CITY OF BURNSVILLE, MINNESOTA ORDAINS AS
FOLLOWS:
SECTION 1. Title 3, Business Regulation, Chapter 31, Short Term Rentals, is hereby
amended by adding the underlined language and deleting the s#ike#weug-h- language as follows:
Chapter 31
SHORT TERM RENTALS
3-31-1: FINDINGS AND PURPOSE:
3-31-22: DEFINITIONS:
3-31-3: SHORT TERMVAC— T-1�- Wa HOMERENTAL P# IX-E-DAUTHOItIZE
AND REGULATED:
1-31-4: VIOLATIONS:
50
http://www.sterlingeodifiers.com/codebook/printnow.php 1/4/2018
Sterling Codifiers, Inc.
3-31-1: FINDINGS AND PURPOSE:
Page 2 of 7
(A) The city of Burnsville is committed to maintaining the quality of life and has a compelling
interest in protecting the character of its residential neighborhoods.
(B) Rental of private homes for temporary occupancy his a cormnercial activity that if
unreszulated can change the essential character and stability of residential neighborhoods because
short term tenants have little interest in the welfare of the local community, do not engage in
activities that strengthen residential neighborhoods, and do not integrate into residential
neighborhoods.
(C) The unregulated rental of private homes for temporary occupancy scan disturb
residential neighborhoods by creating excessive noise, accumulation of refuse, trespassing,
disorderly conduct, vandalism, high occupant turnover, excessive traffic, and excessive numbers
of parked motor vehicles.
(D) Regulating rental of private homes for temporary occupancy is necessary to protect the essential
character of residential neighborhoods and the health, safety, and welfare of the community.
(E) Rental of residential homes for temporary occupancy is e wires
adequate on site management, compliance with state and local codes for commercial lodging
establishments, and other safeguards for those renting the home. (Ord. 1368, 2-16-2016)
3-31-2: DEFINITIONS:
For the purpose of this chapter, the following words and terms are defined as follows:
ENTERPRISE: Any corporation, association, firm, partnership, limited liability partnership, or other
legal entity.
MANAGING AGENCY OR RENTAL AGENT: A person, enterprise, or agency representing the
owner of the short term vaea4iea uait—or- a persen, eaterpr-ise, e than ene she --F
tefm • ,,.,tie • +i -k home rental unit.
PERSON: An individual or group of individuals.
51
http://www.sterlingcodifiers.com/codebook/printnow.php 1/4/2018
Sterling Codifiers, Inc.
Page 3 of 7
REMUNERATION: Compensation, money, or other consideration given in return for occupancy,
possession, or use of real property.
RENT: The consideration or remuneration charged whether or not received, for the occupancy of
space in a short term vacation unit, valued in money, whether to be received in money, goods, labor,
or otherwise, including all receipts, cash, credits, property, or services of any bind. Rent may include
consideration or remuneration received pursuant to an option to purchase whereby a person is given
the right to possess the property for a term of less than thirty (30) days.
RENTAL: An arrangement between a transient and ,aa-ep a home owner whereby rent is
received in exchange for the right to possess a residential structure.
SHORT TERM ;' "�O;HOME RENTAL UNIT: Any structure, or any portion of any structure,
that is rented to a transient for less than thirty (30) consecutive days in
residefltial development dist.et
.
TRANSIENT: Any person who, at their own expense or at the expense of another, exercises
occupancy or possession, or is entitled to occupancy or possession, by reason of any rental agreement,
concession, permit, right of access, option to purchase, license, time sharing arrangement, or any other
type of agreement for a period of less than thirty (30) consecutive calendar days. (Ord. 1368, 2-16-
2016)
3-31-3: SHORT TERM;' N-U4jPTffQME RENTAL 1� .IJ1 OF1 .E
AND REGULATED:
Rental of all or a portion of a home as a short term vaeatien un4 eF uaits by ., epernl.^r
rental aby a home owner to any transient is pie allowed as provided
by this section following issuance of a city permit. State licensed hotels, motels and lodging
establishments located outside residential or planned residential development districts are allowed: as
provided in Chapter 10 of this Code Rental of any other properties for residential dwelling unit
purposes for longer than thirty days requires a rental license under Chapter 28 of this title. (Ord. 1368,
2-16-2016)
(A) Only the principal structure or a portion of a principal structure located on property that is
classified and maintained as homestead under state law is eligible for short term home rental.
(B) Property which is rented in whole or in part by the owner requires a pennit issued by the City.
for which the City may establish a fee.
(C) Property owners must notify any neighbors abutting to the side rear or across the street from
their property at the time of permit application and prior to making their property available for
short term rental.
52
http://www.sterlingeodifiers.com/codebook/printnow.php 1/4/2018
Sterling Codifiers, Inc.
Page 4 of 7
(D) Property must have working smoke and carbon monoxide detectors in each bedroom or sleeping
area and the owner must provide any transient renting the property with information regarding
emergency egress.
(E) The property owner must pay all federal state and local taxes including local lodging tax under
Title 3, Chapter 22 of this Code.
3-31-4: VIOLATIONS:
(A) Unlawful Acts: It shall be unlawful for a person, firm or corporation to be in conflict with or in
violation of any of the provisions of this chapter- or other provisions of this code.
(B) Notice Of Violation: The code official shall serve a notice of violation or order in accordance with
title ^ gb@p+o. Q title 4. chapter 8of this code or as required by state statute.
(C) Prosecution Of Violation: If the notice of violation is not complied with, the code official shall
institute the appropriate proceeding at law or in equality to restrain, correct or abate such
violation, or to require the termination of the unlawful occupancy of the structure in violation of
the provisions of this chapter or of the order or direction made pursuant thereto.
(D) Violation Penalties: Any person who shall violate a provision of this chapter, or fail to comply
therewith, or with any of the requirements thereof is guilty of a misdemeanor. Each day that a
violation continues after due notice has been served shall be deemed a separate offense.
Perinittees are subiect to the provisions of 3-28-10 through 3-28-13 of this code and permits may
be revoked or suspended for violations of those sections
(E) Abatement Of Violation: The imposition of the penalties herein prescribed shall not preclude the
city attorney from instituting appropriate action to restrain, correct or abate a violation, or to
prevent legal occupancy of a building, structure or premises, or to stop an illegal act, conduct,
business or utilization of the building, structure or premises.
(F) Fees And Charges: The property owner of record shall be responsible for any city costs in
enforcing the provisions of this chapter including reinspection fees, civil fines, or other fees,
charges or penalties that are imposed as permitted by law.
(G) Civil Fines: The city council may impose civil fines pursuant to subsection 3-28-10 (C)3 of this
title. (Ord. 1368, 2-16-2016)
53
http://www.sterlingcodifiers.com/codebook/printnow.php 1/4/2018
Sterling Codifiers, Inc.
Page 5 of 7
SECTION 2. Title 10, Zoning, Chapter 12A, Residential Business Requirements,Section
1-12A-2 is hereby amended by adding the underlined language and deleting the str4kethfeugh
language as follows:
Chapter 12A
RESIDENTIAL. BUSINESS REQUIREMENTS
10-12A-1: PURPOSE:
10-12A-2: HOME OCCUPATION:
10-12A-1: PURPOSE:
The purpose of this Chapter is to maintain the character and integrity of residential areas and to
provide a means through the establishment of specific standards and procedures by which home
occupations can be conducted in residential neighborhoods without jeopardizing the health, safety,
and general welfare of the surrounding neighborhood. This Chapter also distinguishes between special
sales events and continuous business. (Ord. 752, 5-17-1999)
10-12A-2: HOME OCCUPATION:
A home occupation including short term home rentals 12ermitted under 3-31-3 of this Code, may be
conducted in a residential dwelling in any residential zoning district subject to the following
requirements:
(A) Exterior Parking:
1. Exterior parking of vehicles in excess of twenty two feet (22') in length is prohibited.
2. No more than four (4) vehicles related to the home occupation, including customer vehicles,
may be parked on the property outside a garage. Vehicles parked outside a garage may only be
parked on driveways surfaced with concrete, bituminous, or brick pavers.
3. Exterior parking of trailers, bobcats, landscaping equipment, cement mixers, and other similar
types of equipment used in the home occupation is prohibited.
(B) Employees: Only residents of the dwelling may engage in or conduct the home occupation in the
home except:
54
http://www.sterlingcodifiers.com/codebook/printnow-php 1/4/2018
Sterling Codifiers, Inc.
Page 6 of 7
1. One nonresident if, by reason of physical or medical condition, the owner would not, in the
absence of such assistance, be able to conduct the home occupation, or
2. One nonresident individual.
(C) Accessory Use Of The Property: The home occupation shall be conducted entirely within the
principal dwelling. Occasional use may be made of a backyard for activities not involving
manufacturing, assembly, or fabricating if such use does not create a nuisance or violate the City's
noise standard. The home occupation may not be conducted in accessory buildings or in attached
or detached garages. Exterior storage is prohibited. Garages may be used for storage if sufficient
room is maintained for the number of vehicles for which the garage is designed.
(D) Appearance:
1. Except for customer and delivery vehicles, and one nonilluminated nameplate sign not larger
than two (2) square feet affixed to the dwelling immediately adjacent to the entrance used for
business access and except as otherwise expressly authorized by this Chapter, there shall be no
evidence of the occupation, activity, or business use visible, audible, or with an odor detectable
from the exterior of the dwelling.
2. No structural changes to the dwelling or residential driveway shall be permitted which are
inconsistent with the residential use and appearance of the property.
(E) Public Health: The use of dumpsters in conjunction with the home occupation is prohibited.
(F) General Restrictions:
1. Ge&WFaffExcept for short term home rental to transients, customer visits related to the home
occupation shall be allowed only during the hours of seven o'clock (7:00) A.M. to ten o'clock
(10:00) P.M. Monday through Saturday. Deliveries and pickups related to the home occupation
shall only be allowed during the hours of eight o'clock (8:00) A.M. to six o'clock (6:00) P.M.
Monday through Saturday.
2. Sales of goods shall be allowed only if incidental to, and made at the time of, the primary
provision of a business service.
3. Deliveries may not be made by semitrailer truck.
4. No business activity may be conducted which is illegal or prohibited under any other City
ordinance or applicable law. (Ord. 752, 5-17-1999)
SECTION 3. This ordinance shall be effective immediately upon its passage and publication
according to law. All short term home rental permits issued under this ordinance shall expire on
December 30, 2018 and this ordinance shall expire and be repealed effective December 30, 2018,
unless extended by subsequent ordinance.
55
http://www.sterlingcodifiers.com/codebook/pdntnow.php 1/4/2018
Sterling Codifiers, Inc.
Page 7 of 7
PASSED AND DULY ADOPTEDby the City Council of the City of Burnsville this 50' day
of December, 2017.
Elizabeth B. Kautz, Mayor
ATTEST:
Macheal Collins, City Clerk
56
http://www.sterlingeodifiers.com/codebook/printnow.php 1/4/2018
�A Citi O
., SHORT TERM RENTAL
ur i HOUSING PERMIT Phone: 952-895-44x0
FAX- 952-895-4512
100 Civic Center Parkway * Burnsville, Minnesota $5337-3817 www.burnsville.org/prope�rty
Rental of all or a portion of a home as a short term rental by a home owner to any transient is allowed as provided by Title 3, Chapter
31 of the Burnsville City Code and following issuance of a city permit. PERMITS EXPIRE ON DECEMBER 30, 2018.
APPLICATIONS WILL NOT BE, ACCEPTED WITHOUT REQUIRED PERMIT FEE! All applications must be accompanied by the appropriate
fee. Make checks payable to: City of Burnsville
• Only the principal structure or a portion of a principal structure located on property that is classified and maintained as homestead under
state law is eligible for short term home rental.
• Property owners must notify any neighbors abutting to the side, rear, or across the street from their property at the time of permit
application and prior to making their property available for short term rental.
• Property must have working smoke and carbon monoxide detectors in each bedroom or sleeping area and the owner must provide any
transient renting the property with information regarding emergency egress.
• The property owner must pay all federal, state, and local taxes, including local lodging tax under Title 3, Chapter 22 of this Code.
Property Information
Address of Short Term Rental Property:
Owner Contact Information
Property Owner Name:
Property Owner Address:
Property Owner Phone:
Property Owner Email:.
Parcel ID#:
Secondary Property Contact
Secondary Contact Name:
Secondary Contact Address:
Secondary Contact Phone:
Secondary Contact Email:
Has the owner notified all neighbors abutting to the side, rear, or across the street from the short term rental property? Yes / No
Please list by address those properties that were notified (use back of form if necessary).
Has the short term rental unit working smoke and carbon monoxide detectors in each bedroom or sleeping area and that information is
available within the unit to transient guests regarding emergency egress? Yes / No
Has the owner read the City of Burnsville Short Term Home Rental Best Practices handout? Yes / No
I hereby agree to abide by all regulations and other applicable codes, ordinances and policies of the City of Burnsville. I acknowledge that I
am the owner -of -record and understand that I am responsible for what occurs on my property.
Signature of Owner: Date:
Dote Remlved, I roved B o Permlt iia
57
,"
z tl
rr
w� Ad
�1 r ✓
oL `0 r0 0 w
Q a °- E
7 O C 0
+- C
0
>1
t NCD
Q .
G m Q 5 .'a v
w c +S y
0
u 0 m ° to
H O> G q= O C O
CL
a
y G. y
L a
>
0J.
+�
41 or-
"a
L
i
d m
CL d
o :7 a
NC = ni.
yy
0 d1
L
u O c
4l
v .5 T8 ,
L v .c
.0
a N
Gf O
0. r t�
,
ILol -• G7 T
u
O d b
C = CA f1 w
d
E
e E
a a 'a
3
dy
C 0 0 m
a
a� ro J2
a a L 0 00
-tti
T �s
N O u N D
oL `0 r0 0 w
Q a °- E
7 O C 0
+- C
0
>1
t NCD
Q .
G m Q 5 .'a v
w c +S y
0
u 0 m ° to
H O> G q= O C O
CL
E > :.
0 °
C e
to LU " 't[5 0WOW
Tc.s
y y C'o
C3 V o C
�+ � i CSs Gi _
z- im U �.
.� L N 0
QiE
V'wom
r V
0 58
a
y G. y
0
a w
41 or-
"a
i
E L
E O
o :7 a
NC = ni.
y0 V 0£
,C rL y
4l
v .5 T8 ,
o ,'' .�
a N
Gf O
0. r t�
CL
O = .
E 1
cr E o+a
Du
a
a
a� ro J2
a a L 0 00
-tti
T �s
N O u N D
,
mac
}
`w a aai oro
r
E s r 0
CL m y a s
97 a m a`
a O
c, o
0V "- -y
c �r > 3 'av
0. m>
d,a o m1�
o
m
am a0 :9aGs
y0
E
a,
C
sc
L
-. • `�lrµ.
.a
v0i 0..
a F
0 y
T
C! Ei a
S
0. 41
y u
.00 a
3 �0.
a•-
Ys
aai.d)
�
0`
d N
0L
41
0
�s
90
(D
°
od
a CL
I
E�
C O 4 D�
6 C)CD
g .r 6
o y
�
3 ro
E a a
O
a O
O
:J CL
E > :.
0 °
C e
to LU " 't[5 0WOW
Tc.s
y y C'o
C3 V o C
�+ � i CSs Gi _
z- im U �.
.� L N 0
QiE
V'wom
r V
0 58
17.1 'o a �
N d`
-:X
X X
� o o u t° c .° o
rte. a o►� � cs m � �
L a) —
a^
E 'a E'
— 7
of `� p V cL d CL - r ,
ix
1 H c L
�• a
107
a L m ; o
° CL #
V E a o 0
�N 6 D O m
w a > :=
iQ Q L 01'E o
>
'rr O m E y p Ig
ge H ti F _ r✓
ar
y
a
a
10 .
a
0
94O
o w
•- a
z
a s
F •F m o
ar
N
0 t
O T 0
a
O m
u a '
Q -a Of+ y`
+" +- O
'u O
}
j E
-»
a-
3
z o o s
p �
E
.F..
a
y
a
10 .
a
0
c
0 0
o w
•- a
z
a s
F •F m o
o
N
0 t
Q
-
C
02
a E
a
a
,..a
c •- a O`
� o �
E
� a V �
a-
3
z o o s
aw
41
.
33 59
a
10 .
a
d
o
m•gQ �.. '"
m
Q
02
t
t
a
m
a
Ti -
E V
a-
CL
�� _:
p �
E
m
!.'`
t
� •c
ri
{ate
Vfl'
y� y
a �.
0 L
a m
0
�
•tow
ati"d",
m=s
a
L
0W
a
w
aw
41
.
33 59
C c
Ity Of
Burn
sville
Lodging 'Tax
Reporting
Information and Instructions
This was prepared to assist individuals responsible for the completion of the City of Burnsville Lodging Tax
Return form in accordance with the Burnsville City Code, Chapter 22.
Lodainu Tax Information
City of Burnsville Lodging Tax (3%)
The City of Burnsville lodging tax applies to sales of transient lodging accommodations and lodging -
related services for a period of fewer than 30 days (or sales for thirty days or more that do not meet
certain criteria) at a lodging facility located within the city limits. Lodging facility includes, but is not
limited to: bed and breakfasts, hotels, campgrounds, motels, resorts, residential short-term rentals,
rooming houses, and trailer camps. The tax is separate and in addition to the current state sales tax.
Amounts paid for the use of real property for purposes other than lodging are not subject to the lodging
tax. For example, the lease of a meeting room in a hotel for a business meeting is not subject to the
lodging tax.
Lodging -Related Services
Charges for services provided within a guest room are treated as taxable lodging related services. The
following are examples of taxable charges:
• Pay per view movies and video games.
• Cots, cribs, refrigerators, roll -away beds, and exercise equipment.
• Pet fee, smoking fee, damage fee and cleaning charges.
• In -room safes.
• Laundry and dry cleaning services.
• Food or Liquor from in -room mini -bars and refrigerators.
• Room service or room delivery fee, including mandatory tips and gratuities.
• Telephone access charges in guest rooms.
Amounts paid for transient lodging accommodations provided within the city limits are subject to the tax
regardless of where payments or reservations are made. Tax on internet transactions is subject to the price
paid by the guest or occupant, not the discounted rate paid by the internet broker.
Realty lease for less than 30 days - A lease of or license to use real property for lodging purposes for
periods of less than 30 days duration is a taxable sale.
Realty lease for 30 days or more — A lease of or license to use specific real property for lodging purposes
are not considered taxable sales if both of the following conditions are met:
1) There must be an enforceable lease agreement involving a tenancy of 30 days or more.
2) The lease must require at least 30 days notice of termination.
If the above conditions are met, the lease is nontaxable even if rent is paid weekly or semimonthly.
Lodging establishments should retain written lease agreements with terms satisfying the above
requirements for six years to avoid being taxed on these revenues.
Cancellation and "No Show" Charges
Cancellation charges are not taxable — since the room was cancelled, no sale occurred and no sales tax is
due. "No Show" charges are taxable — since the room was held for the customer, a sale was made even
though the customer didn't show up.
Please refer to the Minnesota Department of Revenue Hotels and Lodging Facilities Fact Sheet 141 for a
complete explanation of all lodging tax topics.
http://www.revenue.state.mn.us/businesses/sut/factsheets/FS141 pdf
61
General Filing Information
Filing Periods
The City assumes a calendar month end. Your return and payment are due 25 days after the end of the
month in which the taxes are collected. You must file a return each month regardless of rental income.
Penalties and interest may be assessed for late or missing returns and/or payments.
No Sales
If you have made no sales during the rental period, you must still file a return. Write "None" on the sales
line of the return, sign it, and return it by the due date.
Bad debts
Reductions for write-offs can only be taken if the amounts are directly written off the financial records.
Monthly or periodic accrual amounts recorded of bad debt expense cannot be subtracted from taxable
revenues. If the establishment determines that amounts recorded as revenues are not collectible and
writes these amounts off its financial records, it may reduce taxable revenue reported to the City by that
amount. The amount must be related to the type of revenue subject to tax.
Examination of Return
After a return is filed, the City shall examine it and make any investigation or examination of the records
and accounts of the person making the return deemed necessary for determining correctness.
The complete Burnsville Lodging Tax code — Chapter 22 can be found on the City website.
Lodging Tax Return Instructions
Line 1 Gross Lodging Sales
List gross lodging sales, including exclusions for tax-exempt revenues.
Line 2 Less: Exclusions
Exclusions are limited to lodging rental revenues for 30 days or more (that meet additional
critieria), federal employees with proper documentation, foreign officials, and tribal councils.
Line 3 Less: Bad Debt
Reductions for write-offs can only be taken if the amounts are directly written off the financial
records. The amount must be related to the type of revenue subject to tax.
Line 4 Plus: Collected Bad Debt
Amounts recovered that had previously been deducted as bad debt.
Line 5 Total Taxable Lodging Sales
From the Gross Lodging Sales (linel), subtract any Exclusions and Bad Debt (lines 2 and 3) and
add any Collected Bad Debt (line 4).
Line 6 Lodging Tax Due
Multiply Total Taxable Lodging Sales (line 5) by 3% or .03 City Lodging Tax.
Line 7 Penalty
This line is only applicable if the tax return/payment is not received by the 25`'' day fallowing the
end of the reporting month.
Multiply Lodging Tax Due (line 6) by 10% or .10 Penalty Rate.
62
Line 8 Interest
This line is only applicable if the tax return/payment is not received by the 25" day following the
end of the reporting month.
Add Lodging Tax Due (line 6) and Penalty (line 7). Multiply this total by 8% or .08 Interest
Rate. Multiply this total by the number of days past the due date. Divide this total by 360 days.
Line 9 Total Penalty and Interest Due
Add Penalty (line 7) and Interest (line 8).
Line 10Total Amount Due
Add Lodging Tax Due (line 6) and Total Penalty and Interest Due (line 9).
Check payments should be made out to the City of Burnsville. The payment and the return should be
mailed to:
City of Burnsville
Attn: Lodging Tax
100 Civic Center Parkway
Burnsville, MN 55337
63
City of Lodging Tax Return
BURNSVILLE
Bur' �sv e -
Hotel Operating Name
Hotel Address Minnesota Tax ID Number (7 digits)
City State Zip
Owner Name
owner Mailing Address Has there been a change of ownership
since last reporting period?
City State Zip Yes / No Effective Date:
Reporting Period: Due Date:
Reporting period is calendar month Due date is 25 days fallawina calendar month end
1 Gross Lodging Sales
Less: Exclusions
2 Rentaisfor30days ormore&other tax exempt lodgings per State
3 Less: Lodging Bad Debts
4 Plus: Collected Bad Debts
5 Total Taxable Lodging Sales Linea—Llne2—Line3+Line4
Lodging Tax Due Llnesx3%
7 Penalty if poyment rs not made by the due date, Line 6x 10%
8 Interest Line 6x8%annual interest rate xdays past due
...�
9 Total Penalty and Interest Due Une 7+Lines
AMOUNT DUE Line 6 + Line 9 --- ^- Check Payable to
10 TOTAL �- ^— ---�-� City of Burnsville
I declare and certify under penalty of law that I have examined this statement and that
to the best of my knowledge and belief, it is true and complete.
Preparer Name Title
Signature Date
Phone E-mail
Lodging tax rules and regulations are stated in Chapter 22 of the Burnsville City Code.
Lodging Tax Mailing Address and Finance Department Contact Information:
City of Burnsville Ericka Babione
Attn: Lodging Tax Phone: 952-895-4478
100 Civic Center Parkway E -Mail: ericka.babione@bumsvillemn.gov
Burnsville, MN 55337
Form revision dated 12/2017
64
https://www. hometown source.com/sun_thisweek/com m unity/burnsville/short-term-rental-era-opens-
in-burnsville/article_f6dffb4e-e68c-11 e7-b5a6-035b81 f43a65.html
Short-term rental era opens in Burnsville
by John Gessner Dec 21, 2017 Updated Dec 21, 2017
City sets rules, offers tips
So, you want to open your Burnsville home to out-of-towners seeking a room or a house to
rent for the weekend?
Go for it. The City Council voted Dec. 5 to reverse its January 2016 ban on short-term
housing rentals popularized in the "sharing" economy by businesses such as Airbnb and
VRBO.
With two new members prodding this year's change of heart, the council reworked its
previous ordinance on short-term rentals (fewer than 30 consecutive days). Where it once
declared that rental of private homes "disturbs" residential neighborhoods, the ordinance
now states that "unregulated" rental "can" disturb neighborhoods.
To prevent that from happening, the city has assembled a pamphlet of rules and tips for
would-be hosts. It explains the basics of the new ordinance:
- Hosts must obtain a city permit each year they're in business. The cost is $50.
- Only the principal structure or part of the principal structure of a homesteaded property is
eligible for short-term rental. The idea is to keep profiteers from buying up properties and
going into business.
- Property owners must notify any abutting neighbors to the side, rear or across the street
when they apply for a permit and before opening for business. The city won't deny a permit
if a neighbor objects.
• Property owners must have working smoke and carbon monoxide detectors in each
65
bedroom or sleeping area and must provide renters information on emergency exit.
• Property owners must pay all applicable taxes, including the state sales tax and the 3
percent city lodging tax that funds Burnsville's convention and visitors bureau.
When they apply for a permit, property owners needn't provide proof they notified their
neighbors or have working detectors, said Chris Forslund, Burnsville's licensing and code
enforcement coordinator.
"Basically, they bear all responsibility for compliance with the local code," he said. Short-
term renters will not be exempt from Burnsville's year-round on -street parking ban from 2
a.m. to 6 a.m., he noted.
Forslund said Monday there have been no permit applications since the council action. But
at least one resident is eager to look into it:
Mary Knox, 67, of Knob Hill Lane, said she and her husband, a pastor in Bloomington, like
their home and want to remain after he retires. The revenue from short-term rentals would
help, said Knox, who caught the Airbnb bug after one of her three sons opened one in his
family's home.
"Their excitement and their success with it just really got our interest piqued," Knox said.
"And then at the same time my husband had several relatives die. We had to stay in a hotel
one of those times, and it was a horrible experience. And the second time, we decided to
do Airbnb, and it was a fabulous experience, much like what our home would be if
someone came to our home."
Knox, who describes her basement as a "beater youth group basement," also sees a social
aspect to opening her home.
"We thought, being church people, there's always people that are coming into town and
need a place to stay, and we thought we could just fix up our basement and be able to be
more hospitable that way," she said. "And when we don't have those guys, we could do
Airbnb."
By obtaining a permit, hosts are certifying that renters won't commit acts of "disorderly
conduct" that could result in revocation, according to the city.
Loud parties, illicit drug use, unlawful behavior, violation of the overnight parking ban and
violation of local health and safety codes are examples, the city says.
"I think most people here will operate a safe environment," Forslund said. "We certainly
want them to be thinking about things they may not be thinking about."
Insurance, for example: Most homeowner policies won't cover liabilities associated with
running a short-term rental business,
Forslund said.
Hosts should be aware of the risk of stolen -or damaged items, the city advises. Many
short-term rental websites allow hosts to rate their guests. "Always do your due diligence
and check guest reviews/recommendations before approving a reservation," the city
advises.
Officials know some short-term rentals have been operating in Burnsville unlawfully
because they're listed on websites, Forslund said.
"People are realizing this can- be very lucrative, particularly if you have a very big event"
such as the Super Bowl in February in Minneapolis, he said.
Cities have struggled to decide whether to allow short-term rentals partly because the
state has also struggled with their regulation, Forslund said.
"Five or less units, they don't license them," he said. "But it is lodging. l think the bigger
question is that hole in the (state) lodging code."
He said the biggest impacts-af`short-ter-m-rentals are most likely to be felt in "some of
these destination communities like Duluth and Stillwater, all these places where people
want to stay in these Victorian houses!
67
Short Term Rental Policy Considerations
1.) Determine where the short term rentals will be allowed: R-1; Estate; R-2; Other
2.) Shall the ordinance requirement include owner occupied/homesteaded property?
3.) ADA Accessible requirements?
4.) Confirmation that no on street parking will be allowed
5.) License must be approved by the City.... determine for how long the license is valid
and fee
6.) Fire Safety inspection by the City.....how frequently?; require smoke detection,
carbon monoxide detection and emergency exit(s)
7.) To what extent will the City require and monitor private homeowner insurance
requirements.
8.) Limit the number of individuals who can stay in the unit
9.) Limiting the hosts of short term rental to only one (1) listing in the City
10.) Must submit on an annual basis, with license application, verification of tax
Payments: sales, lodging and property tax.
11.) Limit the number of short term rental allowed in condo or apartment building;
...would not be allowed, if owner occupied/homesteaded is required.
12.) "Strike Three" policy to cancel short term rental license, if violations
13.) Identify certain public safety requirements, such as no commercial or social
Events.
14.) No exterior signage allowed.
15.) Must notify the abutting neighbors (Burnsville requires this)
.: