Minneapolis threatens $500 fines to unlicensed Airbnbs

The city of Minneapolis is threatening to impose $500 fines on property owners who list their homes on sites such as Airbnb without paying for a municipal license.

The City Council passed an ordinance in October regulating Airbnb and other short-term rentals. The rules require people who rent out their homes and the online platforms that advertise the properties to apply for municipal short-term rental licenses and renew them each year.

For those who rent out a room in their home but continue to live in it, no registration is required. Those who rent out their whole home when they're away must pay $46 per year for a license, and may be subject to inspections. Those who rent out a home they don't live in must get the same type of rental license required for a conventional landlord, and those licenses start at $70 per year.

Rental platforms must also be licensed by the city. Those that post 150 dwellings or less must pay a $630 annual fee. Larger platforms, such as Airbnb, must pay $5,000.

The rules went into effect in December, just in time for the Super Bowl, and the city has been searching sites like Airbnb for homes in the city that are listed but not yet registered. In a letter dated Feb. 15, the city said that if a property is not either registered with the city or removed from all online platforms by March 21, the city will take action, including possibly a $500 fine.

City spokesman Casper Hill said he could not find out on Wednesday how many letters have been sent or how many short-term rentals have been registered with the city so far. The city estimated in the fall that there are 1,600 short-term rental properties in Minneapolis, but the Super Bowl has increased that number dramatically.

According to Airbnb, there were 1,000 Airbnb hosts in the Twin Cities in early 2017. By this month, there were 5,500 Airbnb hosts in Minneapolis and St. Paul alone.

San Francisco; Portland; Austin, Texas, and Duluth already regulate short-term rentals, as do a number of Twin Cities-area suburbs, including Stillwater, Lakeville and Eagan. St. Paul passed a similar ordinance in October.

Mayor Jacob Frey authored the Minneapolis ordinance when he was a council member. The only vote against the rules came from Council Member Andrew Johnson.

An Airbnb spokesman said Wednesday that the company views the Minneapolis ordinance as one of the best in the country for hosts because those renting out only a room don't have to register or pay a fee, and the other fees are reasonable.

"We encourage full-home hosts to get licensed, and we look forward to cultivating a lasting partnership with the city," Airbnb said in a statement.

The company has expressed concerns that the ordinance requires it to prohibit unlicensed hosts from listing their units online. Airbnb has said it's a violation of a federal law that protects online platforms from liability for content posted by users.