Some homeowners unable to sell have started listing their properties as vacation rentals; one is fighting the city, which likens her operation to a hotel
Carolyn Moore put her home up for sale several times before she decided to move in with her ailing father.
The market was worsening. The quaint, three-bedroom home at 48th & Bryant wouldn’t sell.
So, she decided to rent it to families vacationing in the area, a practice she grew fond of after renting a vacation home herself. She drafted a lease, listed her home online, and before long, started renting it to families visiting Minneapolis for a few days, weeks, or longer.
Then the citations came: exceeding the maximum occupancy of a home, operating as a hotel or bed-and-breakfast, condemnation authorized, others. Moore is now in the middle of a lengthy appeal process with the city, and homeowners like her — those renting their houses short-term to avoid becoming another foreclosure statistic — are paying close attention.
"In this economic crisis, to me, the city of Minneapolis is cutting off a lifeline for some people and micro-managing how they rent their home," Moore said.
A familiar path
Minneapolis Zoning Administrator Steve Poor said the issue of short-term home rentals isn’t entirely new. When times were tough a couple decades ago, some homeowners started renting their houses for short periods of time.
"We’ve kind of been down this path, and that’s how the city got the rules on bed and breakfasts," Poor said.
At the time, the city decided to require homeowners to live in the house if running a bed-and-breakfast, and properties had to have a specific license for the operation and be located in zoning districts that allowed the use. Moore’s house is in a district that doesn’t allow bed-and-breakfasts and she does not live in the house, making the use illegal, Poor said.
Her operation also resembles that of a hotel, he said. Generally, the city defines a hotel as "any dwelling wherein sleeping or rooming accommodations are offered or furnished to the general public for a shorter period of time than one week, with or without meals."
City staff investigated Moore’s property after a nearby resident made a complaint to City Council Member Betsy Hodges (13th Ward) in July.
Moore had been renting the house since April without a rental license, which she said was an honest mistake. She quickly applied and paid for the license when city staff brought it to her attention, but that didn’t stop other citations from coming.
She appealed the city’s findings and hired an attorney. A public hearing about the issue was supposed to take place at a Zoning Board of Adjustment meeting in October, but it was postponed so the city could take a closer look at the practice of vacation renting in Minneapolis.
"As we understand it, there may be more of these similar types of uses out there than we are currently aware," Poor said. "And we may not have sufficient regulation even describing how they’re being used. So in this case, the applicants agreed to pull back a cycle, let’s have a conversation about it and see if there’s some resolution to the issue other than going through an appeal to the zoning administrator."
The city reserves the right to revoke Moore’s rental license, Poor said, but no action will be taken until the appeal process is finished.
Making ends meet
The stagnant housing market was Moore’s motivation for renting her home. Several other homeowners — who didn’t want their names used to avoid confrontation with the city — started listing their homes around the same time for the same reason.
Only a handful of Minneapolis homes are listed on the Vacation Rentals By Owner (VRBO) website that Moore uses, but the trend is growing and the city is trying to figure out how common it really is.
"There are a lot of folks who may have bought more house than they currently can afford to live in and they’re not really sure what to do with it," Poor said.
One homeowner advertising her home on the VRBO website said she started renting so she could "stop bleeding to death" trying to pay her mortgage. Another, trying to keep up with a mortgage, said she advertised her property as a vacation rental when she couldn’t secure a long-term renter. It was a way to keep the income flowing and the house occupied, she said.
Moore, who lives with her father in Northeast Minneapolis, said she’d be in a tough spot if she had to stop renting.
"I just don’t know right now exactly what I would do," she said. "Hopefully things can work out."
Showing off the city
Though making ends meet was her main reason for vacation renting, Moore said the practice has grown on her for other reasons. She’s hosted families from throughout the U.S. and beyond, and said she enjoys showing off the city, her neighborhood and the local businesses.
There’s no shortage of praise from renters who have stayed at Moore’s home, at the cost of $225 per night.
"Our family much enjoyed our stay in a safe, residential Minneapolis neighborhood, and we would like to see the continued availability of this property now and in the future," wrote renter Cyndi Cossais, of Canada, in an email to city staff.
"As Canadians visiting your city, we much preferred the option of staying in a vacation home, frequenting the neighborhood grocer, hairdresser, drycleaner, restaurants, etc.," she wrote.
Vacation renter Carolyn Glasoe, a Minneapolis native who now lives in California, said she would rather stay in a house when visiting family.
"It is much more convenient to stay in a home with my family as it includes small children, and the ability to cook them breakfast early and give them room to move around is important," Glasoe wrote in an email to the city. "Renting a house allows us to really feel like we are a part of Minneapolis and, quite honestly, without the ability to do this, we would not visit as often."
Moore said she screens tenants carefully and her lease bans disruptions such as parties. Several of her neighbors, including Minneapolis License Inspector George Pridmore, support her practice, but not everyone does.
Destabilizing the neighborhood
Some who live near Moore’s home are concerned about all the comings and goings, the regular turnover of the people next door and the possibility of her home setting a precedent for vacation renting in the city.
Neighbors Greg and Diana Ingraham said in a letter to the city that vacation renting could "have a destabilizing influence upon a neighborhood."
Others have complained about parking and not being able to know who’s occupying the house.
"Nobody gets to choose their neighbor," Moore argued to that point. "If there was ever a renter here that my neighbors had a problem with, all they had to do was pick up the phone and call me.
"I understand what they’re saying, but on the other hand, I’m absolutely as careful as I can be, and if I had long-term rentals, there’s no guarantee that I would get a perfect person in here either."
A new date for the public hearing about Moore’s home had not been set as of press time and the situation could be resolved outside the appeal process.
Moore’s attorney, Bill Griffith, said he’s successfully represented homeowners involved in vacation renting in other parts of the state.
Stearns County claimed to be the first in Minnesota to implement vacation rental rules when it did so in August, but other communities also have provisions in place for the practice.
"The nature of them is a short-term rental just like you lease a house or apartment," Griffith said. "It’s really just a version of that that’s a short-term rental and that’s how that should be governed under law."
Moore said she hasn’t rented her home in a while, but she’s hoping she’ll soon be able to without hearing from the city.
"I think that just like Stearns (County), Minneapolis is going to have to do something, too," she said. "I’m hopeful that they’re just not going to close it down and say no way."