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Lake Elmo council debates whether to legalize and regulate short-term rentals after staff find 11 listings
Summary
City staff said Lake Elmo’s zoning currently allows owner-occupied bed-and-breakfasts but not non-owner-occupied short-term rentals. Staff found about 11 listings on Airbnb/VRBO; council members asked for data on compliance, county licensing and enforcement costs before sending the issue to the Planning Commission.
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City staff presented Lake Elmo City Council members with a review of short-term rental options on Nov. 12 after discovering several listings on Airbnb and VRBO that may not conform to local code.
Paul Stoppa, the city’s planning director, said the city currently permits owner-occupied bed-and-breakfasts subject to limits (single-family homes, up to five lodging rooms, two-year licenses) but does not permit non-owner-occupied short-term rentals. Stoppa said Washington County treats short-term rentals as hotel/motel uses under state statute and issues licenses and inspections for lodging, and that neighboring municipalities take different approaches: Stillwater licenses and caps listings in certain districts; Oak Park Heights uses conditional-use permits; Woodbury and Hugo rely on bed-and-breakfast rules without a dedicated short-term rental ordinance.
Stoppa told council staff had found roughly 11 listings on Airbnb/VRBO advertised in Lake Elmo but that staff had not yet cross-checked whether those listings also held county licenses or bed-and-breakfast permits. He warned that active licensing and enforcement would be labor-intensive for a small city because platforms do not always provide host contact or address details, and smaller cities often lack leverage with short‑term rental platforms.
Council members asked staff for a short list of next steps: verify which of the discovered listings have county licenses or existing bed-and-breakfast permits, estimate probable enforcement and licensing costs, and bring zoning/district and cap options back to the Planning Commission for detailed recommendation. Several council members said they were open to narrow, limited allowances (for example, by district, with caps, or by retaining the owner-occupancy requirement) rather than broad citywide legalization.
No ordinance change was adopted at the workshop. Stoppa said the item will go to the Planning Commission for more analysis and that staff will return with information on enforcement options, possible caps, and which current listings appear to be operating without required licenses.

