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Lakefront property owner wants vacation rentals regulated

Dave Williams, who owns property along Pelican Lake, sits at the corner of the table as Crow Wing County Administrator Tim Houle (left) and Commissioners Paul Koering and Paul Thiede listen to Williams' complaints at the Tuesday, July 17, committee of the whole meeting about vacation rentals by owner. Frank Lee / Brainerd Dispatch

Dave Williams likes living by the lake. He just likes it a little less now.

Williams voiced his concerns about vacation rentals by nearby homeowners at the committee of the whole meeting of the Crow Wing County Board of Commissioners on Tuesday, July 17.

"The reason for my being here is the rentals that are nearby me—these are vacation rentals, rentals of homes that are owned by other individuals who use them seasonally as well," he said.

The Hennepin County resident from the Twin Cities bought the vacation property along the southeast shore of Pelican Lake in Pelican Lake Township in 2014.

Williams said the practice by some homeowners who rent their homes to large groups of vacationers is problematic because of the influx of strangers, noise and pollution and what those things bring to area.

"Over the past three-and-a-half years, there has been a constant, consistent interruption of my cabin experience by the people that come and rent those places," Williams said.

Williams wants the commissioners to take a harder look at regulating short-term vacation rentals, a topic he brought up during the open forum portion of the May 22 board meeting.

"All we are doing is looking to establish guidelines. ... This is not, you know, prohibiting anybody from renting a cabin. Rentals will still be there," Williams said at Tuesday's meeting.

Regulating rentals

Williams said he researched as to how other counties regulate vacation rentals by owner, or VRBO, and found several of those with tourism economies have ordinances on the books. This includes nearby Mille Lacs and Aitkin counties, he said.

"I found that there were several counties that had guidelines—several lake-centric counties that had guidelines—that addressed the primary issues of noise and pollution, kind of predicated on the number of people who are on these properties," Williams said.

Renters choose VRBOs "because they seek a more economical way to travel as a group or are seeking a different experience than your typical hotel or resort," according to Land Services Director Gary Griffin.

Concerns associated with VRBOs include public safety, traffic, parking, safe drinking water supplies, adequate sewage treatment systems and disturbances such as noise.

"It also brings forward additional challenges such as legal issues regarding property rights, regulation of rental properties and property tax classification of VRBOs," according to Griffin.

He looked at approaches by seven counties and two cities in the state to regulate VRBOs in a 44-page report distributed at the meeting.

"In the past year, we have received three complaints. Data collected from the seven counties in our report show that there has been approximately 26 complaints in the last year collectively," Griffin wrote in his report. "None of these complaints has turned into enforcement actions."

Commissioner Paul Koering mentioned his South Long Lake residence and a 95-year-old woman who also lives in the area who had her children and grandchildren staying with her for more than two weeks.

"There were 15 cars there, and they had an extra port-a-potty brought in because there were so many people," Koering said.

"They were having a great time. And then over the Fourth of July, I went to bed at 10 o'clock and at about 10:15, I heard 'Bang! Bang! Bang!' so I could say that was affecting my experience where I live, but that's their place ... and I just accepted that."

Williams said beyond guest behavior at VRBOs, his concerns extend to the health of Pelican Lake—a cisco-inhabiting lake he said could be compromised by increasing pressure on septic systems and additional people.

"The difference is the occasion where your neighbors brought up their extended family is probably a once-a-summer, maybe twice-a-summer event," Williams told Koering.

"The difference is that there is money changing hands that distinguishes between occasional family gatherings and consistent business usage."

Growing popularity

Land services researched a few of the more popular websites for VRBO rentals and found more than twice as many VRBOs in the county exist now than what was available in 2014, when a report about VRBOs was first presented. There are 1,186 compared to 504 four years ago.

"Because of the private nature of VRBOs, there is no way to determine the actual number of VRBOs operating in Crow Wing County at any given time," according to Griffin's presentation at the meeting.

Williams said, "The owners of the properties have no idea who is there because they are doing this through this third party, and there is no real way to vet who is there."

No state legislation has been passed specifically defining vacation home rentals, but the Minnesota Department of Revenue states lodging and related services, including vacation home rentals, are subject to Minnesota sales tax, and local sales and use taxes where they exist.

"Years ago, there were all kinds of small mom-and-pop resorts, and there's a lot of people that live in this state that don't have the resources to be lucky enough to have a lake home like you or me ... and so the only way they can experience the lakes is to rent a cabin," Koering said.

"I guess I get a little bit concerned that we're going to put the squeeze now—because I have my place, I don't want you to come and rent this place over here. We're taking away the ability for these people to have the experience of the lakes with their families."

The board of commissioners previously discussed VRBO in 2014, when a group of property owners on Lake Hubert in Nisswa brought nuisance concerns. The board did not move forward with regulations at the time.

"The guy next to me rents his place for $4,500. With fees, it goes to $5,200, so what that does is incentivizes you to put as many people on that property as possible, and at that kind of money, I don't know you would have the regular average person renting there," Williams told Koering.

William said his neighbors run their non-homesteaded property like a business, renting out to as many as 15 people at once for short-term stays.

Enforcing regulations

Only a small number of VRBOs in the county are licensed by the Minnesota Department of Health under the hotel/motel classification, but enforcing regulations on VRBOs would require time and county staff resources to enforce any regulation the county puts in place.

"It should be noted that four of the counties in this report (Aitkin, Lake, Douglas and Stearns) that have ordinances in place also conduct their own (food, beverage and lodging) licensing and inspections," according to Griffin's presentation.

County Administrator Tim Houle said, "We don't have the staff here on Saturday and Sunday, and I would venture to say that probably the greatest likelihood of violations are going to occur Friday or Saturday night ... and Monday, it will be very difficult to confirm or deny the allegation."

VRBOs are not specifically regulated in the county's land use ordinance, which defines "bed-and-breakfast" residences, "resorts" and "commercial" use.

"This has not been the first time this issue has been here," Commissioner Paul Thiede said.

A recent survey by a Cook County representative from the Minnesota Association of County Planning and Zoning Administrators showed out of 41 counties that responded, 22 do not regulate vacation rentals and 12 regulate VRBOs with interim use/conditional use permits.

"I have 29 grandkids. If I had a VRBO next to me, and they're restricted to 11 people or whatever number ... and my grandkids all come and visit me, you don't think I'm going to get nailed?" Thiede said.

"They are going to say, 'How can he have that (many) without following the same restrictions?' ... I've watched this as it has unfolded, and the fact of the matter is there are lawsuits brought on that basis, and that's the problem that we have: writing an ordinance that can be enforced."

An assessment by Mark Severson, a Brainerd attorney certified as a real property law specialist, of the county's land use ordinance indicates short-term vacation rentals are technically prohibited, since the property type is not listed as an allowed use in any of the zones. But Thiede said coming up with a VRBO-specific ordinance is tricky.

"It's very difficult to do that in such a manner that it satisfies all situations, and that's what's been the reluctance—not that this isn't an issue that has been around," Thiede said. "We've been around this, we've talked about it, we've looked at it."

Commissioner Doug Houge was not at the meeting. The rest of the commissioners said the complicated issue required more examination but did not express any immediate plans to make it an agenda item at a future board meeting.