Duluth to crack down on homeowner rentals

The law is having a hard time keeping up with technology-fueled entrepreneurs, but Duluth is giving it a go with a potential crackdown on homeowners who rent out their property to tourists via sites such as VRBO and AirBnB.

City Councilor Joel Sipress thinks the city should consider a San Francisco model where only approved properties and homeowners will be allowed to publish listings for property in the city. Next week, the Council will consider a temporary moratorium on vacation rentals.

Over the years, Duluth has issued only about 30 such licenses and the Duluth News Tribune says online sites regularly list dozens more.

What’s the big issue? The government wants a piece of the action.

“They’re supposed to be paying taxes if they are renting out their property, because it’s a business. You don’t pay a business tax when you have long-term rental but this is something different,” City Councilor Barb Russ said.

Apparently the do-it-yourself model is upsetting to people in the hospitality industry who object to homeowners competing with them unfairly.

“Before anybody says: We just don’t want the competition. That’s not our concern,” Tim Allen, president of Historic Bed & Breakfast Inns of Duluth, tells the paper. “We think they need to be regulated like we are. They need to be licensed and inspected. They need to collect sales and lodging tax. Let’s not forget that the city needs the revenue, and they’re not getting it, at least with these unlicensed VRBOs (vacation rentals by owner).”