The city of Duluth is hitting pause on new permits for all vacation rentals in the city – including hotels and bed and breakfasts – so officials can figure out how to regulate short-term rental properties that are becoming increasingly popular.
The Duluth City Council unanimously voted to impose a moratorium on new permits at a time when more and more unregulated short-term rental properties are popping up on websites such as airbnb, VRBO and HomeAway.com.
On those sites, owners offer travelers a place to stay for a price that is typically cheaper than a hotel. It's a method that's becoming popular for travelers around the globe.
But in Duluth, the short-term rental property owners aren't licensed by the city, FOX 21 reported, unlike full-time vacation rental units which the city regulates and collects taxes on.
Few rules and regulations
City officials have expressed concerns about safety, and about neighborhoods being taken over by these rental properties. Those in the tourism business say these types of short-term rental properties should be required to follow the same rules and meet the same health and safety standards as others in the industry, the Duluth News Tribune reports.
"What we do want are some common sense rules and everybody to play by the same set of rules and get these places licensed, get them inspected, and make them start collecting the lodging and sales tax," Tim Allen, the president of Historic Bed and Breakfast Inns of Duluth, told Northland's NewsCenter.
The city plans to look into enforcement measures of short-term vacation rentals, the creation of a vacation rental registry, new regulatory requirements and regulations for the location of rentals, among other measures.
WDIO notes that part-time vacation rental units like those advertised on airbnb are required to pay sales and tourism taxes like full-time rental properties, but currently the city has no clear system on how to collect them, which is another reason for the study.
Duluth to study other cities
The city council plans to vote on re-authorization of vacation rentals once it looks at how other cities regulate these short-term rental properties, Northland's NewsCenter says.
Some cities have looked into regulations that only allow approved properties to be listed on such websites, reports note. Officials in San Francisco and New York say short-term vacation rentals are upsetting the housing market, and causing other issues, the New York Times notes.
The moratorium, which will go into effect in 30 days, can not exceed one year.