Lake Elmo council weighs allowing short-term rentals amid compliance gaps and enforcement concerns
November 13, 2025 | Lake Elmo City, Washington County, Minnesota
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"Currently, we have bed and breakfasts that are allowed, but they have to be owner occupied," Stolpa said, and she added the city issues bed-and-breakfast licenses with limits (lodging rooms cannot exceed five, parking and insurance requirements, and two-year license terms). She warned that state building-code classifications can push a property into an R-1 hotel classification when certain occupancy thresholds or services apply, raising ADA and other costs.
Stolpa reviewed approaches other cities take: Stillwater requires conversion from R-3 to R-1 and council approval for permits, Oak Park Heights uses a conditional-use approach, and Woodbury and Hugo keep bed-and-breakfast rules without a broader short-term-rental ordinance. She flagged enforcement challenges for smaller cities: platform cooperation can be difficult and licensing/enforcement requires staff time.
Council members expressed mixed views. Several said they preferred to preserve Lake Elmo's residential character and avoid wide adoption of STRs without guardrails; one council member proposed a cap and geographic limits, another urged staff to check county licensing and owner-occupancy via public records before making a recommendation.
Stolpa said the issue will go to the Planning Commission for more detailed policy work, including possible zoning districts, licensing approaches, caps, and performance standards such as a three-strike rule tied to substantiated complaints. The council did not change code at the meeting and asked staff for additional compliance data on the currently operating listings.
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