ORDINANCE NO. 357, 2nd Series AN ORDINANCE OF THE CITY OF ELY, MINNESOTA, AMENDING CHAPTER 17, THE LICENSING OF SHORT TERM RENTALS

ORDINANCE NO. 357,
2nd Series
AN ORDINANCE OF THE CITY OF ELY, MINNESOTA,
AMENDING CHAPTER 17, THE LICENSING OF SHORT TERM RENTALS

THE COUNCIL OF THE CITY OF ELY DOES HEREBY ORDAIN:
SECTION 1 Chapter 17, Sections 17.01 through 17.10 of the City Code of the City of Ely, Minnesota is added to read as follows:
SECTION 17.01. PURPOSE. The purpose of this article is to regulate short-term vacation rentals within the City of Ely, Minnesota, for the purpose of allowing property owners to offer their property for rent while mitigating associated negative impacts upon surrounding properties and neighborhoods, as well as water and environmental quality and general public safety.
SECTION 17.02. DEFINITIONS. Words used in this Ordinance shall have the following meanings unless otherwise defined in this Ordinance.
(1) “Applicant” shall mean the property owner of record of the real estate within the City of Ely for which a short-term rental license is sought under this article.
(2) “Dwelling Unit” shall mean a structure or portion of a structure or other shelter designed as living quarters for one or more persons.
(3) “Rental Period” shall mean a period of time for which a dwelling unit is rented.
(4) “Short-Term Rental Period” shall mean a rental period of less than thirty (30) days.
SECTION 17.03. LICENSE REQUIRED. No property owner shall rent or cause to be rented a dwelling unit within Ely for a period less than thirty (30) days without first obtaining a license from the City. Short-term rental licenses may be applied for in the following zones: R-1, R-2, RT, C-1, C-2 and SMU.
Short-term rental license is not required as follows:
For those properties which meet the definition under Ely City Code Section 11.01 subd. 27 as “Rooming House” and who hold a valid Minnesota Department of Health license per Minnesota Statutes.
(1) Application. An application for a license to rent a dwelling unit for a short-term rental period shall be made on a form provided by the City. The application shall contain the full name of the applicant, the applicant’s residential address and telephone numbers, the address of the proposed rental property, and any additional information the City deems necessary. The following items shall be submitted with the application:
a. Sketch floor plan of structure, including the number of bedrooms numbered 1, 2, 3, etc. and all other sleeping accommodations not specific to a bedroom.
b. A valid Minnesota Department of Health license for Vacation Home/Hotel/Motel per Minnesota Statutes.
c. Acknowledgment and proof of lodging and sales tax collection.
d. Site plan which shows locations of property lines, the dwelling unit(s) to be rented and specific parking areas that will be utilized by renters for vehicles and trailer parking.
e. If necessary, valid Certificate of Compliance for the Subsurface Sewage Treatment System (SSTS) less than ten (10) years old showing that the system is compliant with then applicable Minnesota Rules and any applicable municipal ordinances, and then at least once every three (3) years thereafter shall provide an updated certificate of septic testing showing that the system is compliant for the number of bedrooms indicated in the application.
f. Name and telephone number of a contact person who shall be responsible for responding to questions or concerns regarding the operation of the short-term rental. This information must be kept current. The contact person must be available to accept telephone calls on a 24-hour basis at all times that the short-term rental is rented and occupied. The contact person must have a key to the rental unit and be able to respond to the short-term rental within sixty (60) minutes to address issues or must have arranged for another person to address issues within the same timeframe. The requirement for identifying a contact person applies to each person or entity making arrangements for renting a given short-term rental.
g. If the property was rented the prior calendar year, a written listing of rental periods the property was rented and number of persons in each rental period.
(2) Inspection.
Upon receipt of a completed application, the City Clerk- Treasurer or his or her designee shall review the same and upon determining that the application complies with this article, shall cause the property to be inspected. An Inspection Points Checklist shall be determined by resolution of the Ely City Council and shall be made part of this ordinance by reference. The property shall comply with the requirements of the Inspection Points Checklist.
The City Clerk- Treasurer or his or her designee shall review the inspection report and if the property complies with this article shall issue the license. The City Clerk- Treasurer or his or her designee may delay action for a reasonable period as necessary to complete any investigation of the application or the applicant as he or she deems necessary. If the application does not comply with this article, the City Clerk- Treasurer or his or her designee shall deny the application. If the City Clerk- Treasurer or his or her designee shall determine that an application is incomplete, he or she shall return the application to the applicant with notice of the information necessary to make the application complete.
(3) Appeal. If the City Clerk- Treasurer or his or her designee shall deny the license application, he or she shall provide written notice of the denial to the applicant along with notice of the applicant’s right to appeal the denial to the City Council by submitting a written request for a public hearing on the denial to the official who provided the notice of denial within ten (10) days after service of the notice. If requested, a public hearing on the denial of a license application shall be held at a regular or special meeting of the City Council. The presiding officer shall make a statement as to the reason for the hearing and make every reasonable effort to ensure a fair and full presentation of the facts and arguments by the applicant and the City and representatives or counsel for each. When the public hearing is closed, the presiding officer shall advise the City Council that any decision to affirm the denial of the license application must be made for failure to comply with the requirements in this article. A decision shall be made by the City Council within a reasonable time after the public hearing is closed and promptly communicated to the applicant in writing.
(4) Term. All licenses issued under this article shall fall under the calendar licensing year of January 1 to December 31. License fees are not pro-rated if issued at any time other than January 1.
(5) Transfers. All licenses issued under this chapter shall be valid only on the premises for which the license was issued and may not be transferred to another location. Within 30 days of sale, the current owner of the premise shall apply for the required licensee, or such license shall be permanently revoked.
(6) Display. All permits shall be posted and displayed in the short-term rental on the permitted premises.
SECTION 17.04. FEES. No license shall be issued under this article until the appropriate license fee shall be paid in full. The fee for a license under this article shall be established in the City’s Resolution Establishing Fees and Charges, as it may be amended from time to time.
SECTION 17.05 LODGING AND SALES TAXES. In addition to state sales tax, short term home rentals are required to pay the Ely Area Lodging Tax directly to the Cook County Auditor’s Office on a quarterly basis. The property owner must provide information on a web-based booking service(s) used for the property. If no sales are made during a quarter, a report must be submitted stating that no sales were made or lodging tax collected during that quarter.
SECTION 17.06. ZONING DISTRICT. Short-term rental license shall be applied for in the following zones: R-1, R-2, RT, C-1, C-2, and SMU.
SECTION 17.07. CONDITIONS OF LICENSE. Short term rental licenses issued under this article shall be subject to the following conditions:
(1) The maximum rental period shall not be more than thirty (30) days.
(2) The maximum number of guests will be limited to two times the number of bedrooms, or sleeping areas, plus one.
(3) Additional occupancy by use of recreational vehicles, tents, accessory structures, garages, boathouses, pole barns, sheds, fish houses, or similar structure is not permitted.
(4) The dwelling unit must meet Minnesota Residential Building Code requirements regarding fire egress from all bedrooms/sleeping areas and detector/alarm systems.
(5) In residential zoning districts, all guest parking must be accommodated on improved driveways and improved parking surfaces on the premises. No on-street parking is allowed for guests. At a minimum, parking shall be provided as follows:
i. Units with one to two bedrooms or sleeping areas, one space.
ii. Units with three-bedrooms or sleeping areas, two spaces.
iii. Units with four or more bedrooms or sleeping areas, number of spaces equal to the number of bedrooms or sleeping areas, minus one
iv. Parking areas must meet the side yard setback for the zoning classification of the subject property.
(6) In C-1 and C-2 zoning districts, sufficient guest parking, as described above in Section 17.07 subd. 5, shall be provide onsite or an adjacent parking location dedicated to the short-term rental.
(7) In C-1 and C-2 zoning districts, the premises, if required by the City, shall maintain the appearance of a storefront.
(8) The owner shall keep a report detailing use of the home by recording the full name, address, phone number and vehicle license number of adult guests using the property. A copy of the report shall be provided to the City upon request.
(9) The licensee must provide proof of sufficient and suitable property insurance with the license application and must be able to confirm that the coverage remains in place within 24 hours of a request by the city.
SECTION 17.08. ENFORCEMENT
(1) Order to Correct Violation; License Suspension and Revocation.
a. If the City determines that a dwelling unit is a public nuisance, operating without a license or other approval required by this article, or operating in violation of this article or any other applicable provisions of city code, the City shall provide written notice of the violation to the property owner and order the correction of the violation in accordance with this section. Evidence for violation may be gathered at any time and is considered admissible evidence for suspension/revocation of a license when collected from rental website information, neighborhood complaints, photographic evidence, or other means of collection.
b. Any short term rental license issued pursuant to this article may be suspended for up to six (6) months or revoked by the city for good cause. If the City intends to suspend or revoke a short term rental license, the City Clerk Treasurer or his or her designee shall issue written notice of such intent to the licensee at least five(5) days before such suspension or revocation is set to begin. The notice shall be posted property and served on the licensee in person or by certified mail, return receipt requested, and shall include notice of the licensee’s right to appeal the suspension or revocation to the City Council by submitting a written request for a public hearing on the suspension or revocation to the official who provided the notice of suspension or revocation within ten (10) days after service of the notice.
c. If requested, a public hearing on the suspension or revocation of a license application shall be held at a regular or special meeting of the City Council. The presiding officer shall make a statement as to the reason for the hearing and make every reasonable effort to ensure a fair and full presentation of the facts and arguments by the licensee and the City and representatives or counsel for each. When the public hearing is closed, the presiding officer shall advise the City Council that any decision to affirm the suspension or revocation of the license application must be made for cause as defined in this Article. A decision shall be made by the City Council within a reasonable time after the public hearing is closed and promptly communicated to the applicant in writing.
d. For purposes of this section, good cause shall include, but not be limited to:
i. Failure to comply with an order to correct a violation issued pursuant to this Section;
ii. Issuance of three or more violation notices under this Section;
iii. The occurrence of one or more nuisance conditions;
iv. Use or operation of a licensed dwelling unit in a manner that imperils public health, safety or welfare, including but not limited to, violation of this article or any other provision of local, state, or federal law intended to protect occupants of the dwelling or the surrounding neighborhood and community;
v. Material inaccuracies in any application materials, reports or other information submitted to the City regarding the activity for which the license or license was issued; or
vi. Conviction of a crime related to the activity for which the license was issued.
(2) Withholding Licenses or Approvals. The City may refuse to process applications for licenses and approvals under this article if the application concerns a property determined to be in violation of this article and where the city has issued an order requiring the violation that the property owner has not complied with.
(3) Administrative Citations. The City may issue an administrative citation pursuant to Chapter 7, Article 1 for violations of this article and may take all actions therein authorized.
SECTION 17.09. LIMIT ON NUMBER OF LICENSES
The number of licenses available for issuance shall be determined by resolution of the Ely City Council.
SECTION 17.10. PENALTY
(1) Any property owner and/or their agent who rents a dwelling unit for a short-term rental period without a valid short­ term rental license issued by the City under this article is guilty of a misdemeanor and shall be fined with a civil penalty of $700.00 and such property shall be posted as an unpermitted rental
(2) Any person who knowingly removes a City issued posting for an unpermitted rental shall be guilty of a misdemeanor be fined with a civil penalty of $700.00.
(3) Any person who knowingly makes a false report to the City of a violation of this article by another is guilty of a misdemeanor.
SECTION 2. Effective Date: Pursuant to Section 3.08 of the Charter of the City of Ely, Minnesota, the adoption of this Ordinance is effective after final adoption and publication.

First Reading: June 7, 2022
Publication Date: June 11, 2022
Newspaper: Ely Echo