Are short-term rentals here to stay?

October 10, 2018

When planning a trip to Mayo Clinic from Pittsburg, Kan., Craig and Brenda Stokes knew they’d need to find a place to stay.

Searching Airbnb wasn’t their first choice, but it was encouraged by their daughter — the same person who previously introduced them to Uber.

The first Uber experience was less than stellar, but their Airbnb trial run has worked out well.

“We didn’t know at first, but it ended up being a good deal,” Craig Stokes said last week shortly after returning from a day at the clinic to the Southwest Rochester home owned by Brett and Maisa Boese.

Maisa Boese said she understands the hesitancy. “It was not my first idea for something to be doing,” she said of hosting paid guests in their home within a mile of Saint Marys Hospital.

Brett Boese, a former Post Bulletin reporter, said the couple decided to test drive opening their basement living space to guests in 2015.

“We didn’t go down there and use it, so it was just wasted space,” he said, noting they also share the first floor with guests.

Since starting, the Boeses have hosted guests from 10 countries and throughout the U.S.

Another early adopter of the concept in Rochester, Vinta Phord, said she went into the short-term market with more intent.

She owns three homes that have offered short-term leases at some point.

While only one of the homes remains listed on Airbnb — the others are filled with longer leases — she said she maintains a presence on the site as a marketing tool, while also renting through Booking.com and {a href=”https://www.homeaway.com/?k_clickid=CNPhr-uG-N0CFQCHxQIdoqQMGg&ds_kids=p21589513764&ds_kid=43700021589513764&ksprof_id=700000001587598&ksdevice=c&ktarget=kwd-72636610389935:loc-190&kloct=&klocf=53656&utm_source=MICROSOFT&utm_medium=cpc&utm_campaign=B%3AUSA-en&utm_term=homeaway&utm_content=Brand%3ACore%3AExact&msclkid=e522ed55e16715586eeab6ee0ec33e7d&gclid=CNPhr-uG-N0CFQCHxQIdoqQMGg&gclsrc=ds&dclid=CL_puuuG-N0CFUrEwAodWWwCcQ” target=”_blank”}Home Away{/a} websites, which she said offer more rigorous evaluation of properties and participants.

“They actually legitimized me,” she said.

Phord, who maintains city-issued rental certificates on the houses she leases, said she’s seen a steady decline in some offerings found in Airbnb in Rochester. At the same time, she said she knows good opportunities exist for both hosts and guests.

She’s been keeping a cautious eye on Rochester City Council discussions about monitoring short-term leases. The Boeses and others have as well.

While several hosts declined to comment for this article, some contacted the Post Bulletin with concerns.

Ben Griffith, interim planning director with Rochester-Olmsted Planning Department, has been tasked with looking at options for regulating a market that fits between apartments and hotels.

While it was difficult to connect with some hosts due to the nature of online rentals, Griffith said he was able to put a group together to get feedback regarding the potential for city-mandated inspections and other regulations.

“I think uniformly everyone said they’d like to be inspected,” he said, but noted there were concerns about fees and whether they would get benefits if they contribute to the city’s lodging tax.

Griffith was planning to take his findings to this week’s Rochester City Council informational meeting, but the Monday afternoon meeting was canceled.

The short-term rental presentation has been tentatively rescheduled for Oct. 22.

The latest presentation was sparked by an Aug. 20 request from council members Ed Hruska and Michael Wojcik, who asked for policy recommendations to consider by the end of the month. The request was supported in a 6-1 vote, with only Council Member Nick Campion opposed to the request.

Among policy considerations to be examined are how to define short-term rentals, whether they should be licensed and inspected, whether limits should be in place, whether fees or taxes should be collected and how policies could be enforced.

Griffith said he doesn’t anticipate proposing any specific changes when he meets with the council, but will look for more specific guidance, since council members appear to share differing views on the subject.

If the council can hone in on policy considerations, Griffith said his staff could have changes ready for the council to review and adopt before the end of the year, when Hruska will retire from both the city council and his position as executive director of Rochester Sports, which is housed under Experience Rochester, formerly known as Rochester Convention and Visitors Bureau.

Experience Rochester has been part of the Airbnb discussion from the start, since it works with local hotels in marketing the city. It also operates on a budget that is primarily supported by the city’s 7 percent lodging tax on hotel rooms.

While Airbnb started collecting Minnesota and local sales taxes this month, it will not collect the lodging tax unless prompted by the city, which was the case in Duluth.

Mary Gaster, interim director for Experience Rochester, said she’s in the process of gathering information from hotel operators in the city, but doesn’t believe the push is to end the short-term rental option.

“Baseline, we want to make sure our visitors have an excellent experience here and we just want to make sure there are processes in place that make sure of that,” she said, noting that could include some regulation and related inspections.

Brett Boese said he’s open to some regulations to ensure short-term rentals are safe and could even see paying fees or taxes if they benefit hosts or their guests, but he doesn’t see how opening his door to visitors is a detriment to the city’s hotels.

He cites continued reports of increased hotel activity and limited space as evidence that the market is big enough to be shared.

Phord agrees to some extent. While she has concerns about operations, like the Boeses’, which aren’t subject to existing rental regulations due to the short-term nature, she said there needs to be middle ground for people who are providing a quality service.

“Taking away Airbnb won’t necessarily hurt me, but it will hurt a lot of people,” she said.

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