St. Paul to loosen rules for short-term rental platforms

St. Paul leaders are looking to loosen rules for short-term rental platforms, after Airbnb threatened to sue the city over its crackdown last year.

Airbnb, VRBO and other rental websites would no longer be required to remove listings for unlicensed properties, under the City Council's proposed change. Instead, hosts will have to include their licensing information in any short-term rental advertisement.

"This allows us to find out who has [a license] and who doesn't," said Council Member Chris Tolbert, who authored the ordinance.

Tolbert said when the ordinance passed in October that he expected the city's rules for the previously unregulated short-term rental industry would need to evolve over time. On Wednesday, he described the changes the council is considering as "technical."

Airbnb applauded the proposed changes Wednesday. The company threatened legal action in both St. Paul and Minneapolis when the cities passed similar ordinances last year, saying the regulations violated a federal law that protects online platforms from being held liable for content posted by third-party users.

"We are proud to support this amendment and look forward to a partnership with the city to help hosts get registered," Airbnb spokesman Ben Breit said in a statement.

In St. Paul, short-term rental hosts have to pay the city a $40 annual licensing fee for each unit they're renting and comply with limits on how many visitors they can host at one time. Rental platforms must pay a $10,000 annual licensing fee.

Under the updated ordinance, licensing requirements would stay the same but hosts and platforms would face misdemeanor charges — instead of the original petty misdemeanor charges — if they don't have a license. The city will be responsible for making sure that only licensed properties are listed online, Tolbert said.

After speaking at a public hearing at City Hall on Wednesday, Cory Biladeau, who co-owns the Corban Manor Inn with his wife, said he supported tougher standards for Airbnb hosts.

Biladeau said he appreciates that the punishment for noncompliant hosts would be more severe under the updated ordinance, but the regulations still don't come close to those his bed-and-breakfast has to meet. He also questioned how the city will identify noncompliant properties.

Trudy Ohnsorg, who rents her house on St. Paul's East Side through Airbnb, didn't attend the public hearing but said she likes that the updated ordinance would allow for investigation into unlicensed properties before listings are removed.

"As a host, I have a concern that listings are safe and appropriate and all of that, and so I'm in total agreement that there needs to be a process to remove listings that are not to the benefit of the community."

Ohnsorg has been lobbying for St. Paul to change how it collects taxes from short-term rentals — a change that isn't included in the updated ordinance.

Under the current ordinance, hosts must collect and pay local, state and federal taxes unless the rental platform does it for them. Ohnsorg said she wants the city to do what the Minnesota Department of Revenue does, and require platforms that handle payments to collect and pay taxes.

Council Member Jane Prince said she's "still not satisfied" with how the ordinance regulates tax collection, and that the Department of Safety and Inspections and the City Attorney's Office are going to work with the council to make changes later.

The council is expected to vote on the ordinance update April 11.

Emma Nelson • 612-673-4509