ELY – City Council members received a near-final draft of an ordinance providing for the licensing of short-term rentals. A public hearing is scheduled for next month to allow the public to weigh in before final approval.
City Attorney Kelly Klun said the ordinance has been in the works for more than two years. Klun added that consultations with St. Louis County and the Minnesota Department of Health to incorporate their rules and regulations were also part of the ordinance. The city’s building official was also consulted in drafting the ordinance.
The purpose of the ordinance is to regulate vacation or short-term rentals within the city, and to allow property owners to offer their property for rent for a period of less than 30 days.
The draft ordinance stipulates:
Property owners are required to obtain a permit from the city for all short-term rentals.
A license from the Minnesota Department of Health is required for each short-term rental unit.
Short-term rentals are required to pay city lodging taxes.
Short-term rental licenses are required in Zones R-1, R-2, RT and SMU (Shoreland Multiple Use). Short-term licenses are not required in C-1 and C-2 and for previously licensed lodging establishments.
Occupancy by use of recreational vehicles, tents, garages, sheds, and other structures is not allowed.
Limits on occupancy are required.
Council members approved the first reading of the short-term rental ordinance on a 5-2 vote. Council members Paul Kess and Angela Campbell voted against the measure.
Kess objected to allowing short-term rentals in R-1 Zoning areas.
“If we allow rentals in these (residential) areas, it changes the character of the neighborhood,” he said. “There is the potential for constant changeover for people who live right next door. Suddenly there is a short-term hotel right next to you that you have no control over.” He also mentioned public safety, traffic, noise, and other disturbance factors in his objections.
Kess also asserted that as more and more houses are switched over to short-term rentals, fewer dwellings become available for long-term rental.
“It is difficult now in Ely to find an apartment,” he said. “If we allow this to happen everywhere in the city’s R-1 districts, it will be more and more difficult to live in Ely.”
He also noted that the short-term rental ordinance is unfair to the commercial lodging establishments in the city.
A public hearing on the proposed ordinance will be held on Tuesday, Dec. 1 at 4:30 p.m. in City Hall.

Other business
In other business, the city council:
• Approved a recommendation from the Heritage Preservation Commission to accept a retaining wall design for the Pioneer Mine Site.
• Accepted the Planning and Zoning Commission’s recommendation to review the COVID-19 plan for the Ely Winter Festival before allowing the event to be held next February.
• Accepted the resignation of Adam Borchert from the Ely Police Department. He accepted a similar law enforcement position with the Lake County Sheriff’s Department.
• Approved paying $15,000 to Premier Pyrotechnics for the Fourth of July fireworks in 2021.
• Approved a temporary liquor license to the Ely Folk School for an event on Dec. 12 at Semer’s Park.
• Approved a resolution authorizing the Ely Blue Line Club to apply for a raffle permit.