City Subscriptions

 

 

[DULUTH, MN] As the Duluth City Council’s moratorium on new short-term rental permits approaches its October 2026 expiration, City of Duluth staff have completed a yearlong study of short-term rental regulations and the city’s licensing and permitting processes (Resolution 25-0808R and Ordinance 25-028-O).

 

City staff recently presented recommendations to the City Council based on the study, which examined how short-term rentals are regulated and enforced in Duluth and identified opportunities to clarify and streamline existing requirements.

 

Staff from Planning and Economic Development, Life Safety, and City Administration worked together to review the City’s rules within the Duluth City Code and other applicable rules and regulations. The review identified inconsistencies and conflicting standards that created confusion for property owners, community members, and decision makers. Also, these inconsistencies placed unnecessary administrative burdens on City staff.

 

The study also addressed several broader policy objectives, including preventing the conversion and loss of single-family homes as long-term housing, addressing over-concentrations of short-term rentals in residential neighborhoods, streamlining the licensing process, and strengthening enforcement against illegal short-term rentals.

 

 

Recommended actions

 

City staff presented four primary recommendations to the City Council:

 

1. Refocus where and how short-term rentals are allowed.

Eliminate the existing cap on short-term rentals and instead focus regulations on the types of structures and circumstances in which new short-term rentals may operate. Specifically:

 

• Conversion of existing single-family homes to short-term rentals would be prohibited.
• Homeowners living in a primary dwelling unit may operate short-term rentals in existing or newly constructed accessory dwelling units, such as a detached tiny home or other backyard dwelling.
• Homesharing would be allowed in owner-occupied, homesteaded homes.
• Short-term rentals could be included in new residential development, including new construction and building conversions, but would be limited to 10% of the units in any development.

 

2. Streamline and better define lodging uses.

Clarify distinctions among short-term rentals and other lodging options, including hotels, motels, and bed and breakfasts, to reduce confusion and prevent misuse of different lodging classifications.

 

3. Strengthen enforcement of illegal short-term rentals.

 

Use technology and City staff resources to more actively identify and enforce against illegal short-term rentals.

 

4. Establish a pathway for previously licensed vacation dwelling units.

Previously licensed units (including those in single family homes) would be eligible to apply for the new short-term rental license and operate under the updated regulations.

 

The recommended actions are intended to:

 

• Stop the conversion of existing housing stock into short-term rentals.
• Allow only limited opportunities for new short-term rentals while requiring them to meet safer, clearly defined standards.
• Preserve short-term rental options for homeowners who live in and homestead their properties.
• Minimize the addition of short-term rentals in established residential neighborhoods.
• Improve the City’s ability to quickly identify and enforce against illegal rentals.
• Create a more equitable distribution of tourism-related tax obligations across the hospitality industry.

 

The Duluth City Council will consider and debate potential changes to short-term rental regulations in the coming months. Any regulatory changes would be considered before the current moratorium expires in October 2026.

 

 

###