WAYZATA — The City of Wayzata is weighing whether to impose additional new restrictions on short-term rentals (STRs), just months after launching a licensing program that brought the popular but often polarizing use under formal regulation for the first time.
In late 2024, the city began requiring STR operators—defined as those renting for fewer than 30 consecutive days—to obtain a rental license. Operators must designate a local contact, comply with health and safety rules, and meet parking and occupancy standards. According to a March 2025 analysis by staff, approximately 18 active short-term rentals are operating in Wayzata, most near downtown and along the lake.
At an upcoming meeting, the City Council will consider three options presented by staff: expand the city’s current regulations, prohibit STRs outright, or maintain the existing licensing system without further changes.
The staff report notes that while Wayzata does not currently impose a lodging tax, the City Council could consider establishing one in the future if short-term rentals remain permitted. This would align Wayzata with other cities that collect revenue from transient lodging to support tourism-related services. Introducing a lodging tax could also help create a more level playing field between traditional hotels and short-term rental properties operating within residential neighborhoods.
City Staff Seeking Direction
“The purpose of this item is to present policy options to the City Council for how to regulate short-term rentals in Wayzata moving forward,” wrote Community Development Director Alex Sharpe in the agenda report. Staff are seeking direction on whether to begin drafting formal zoning amendments or simply continue enforcement as-is.
The options under review include potential caps on licenses, limiting STRs to owner-occupied homes, or restricting them by zoning district. A full ban would revoke the ability to license STRs altogether.
Some residents have voiced concerns about noise, traffic, and the turnover of guests, particularly in quiet residential areas. Others say STRs offer property owners flexibility and provide needed lodging options during busy summer weekends, major events, and family visits.
A Potential Major Reversal by the City
The discussion marks a notable shift for a city that once actively created space for transient lodging in residential neighborhoods.
Before The Hotel Landing was built in downtown Wayzata, the city adopted zoning rules expressly allowing Bed and Breakfast Establishments in single-family residential zones and Inn Establishments in commercial and institutional districts—provided they received a conditional use permit. Chapter 925 of the zoning ordinance remains on the books today, stating its purpose is “to provide temporary accommodations on an ongoing basis within residential and commercial areas.”
Now, with licensed STRs operating and a luxury hotel anchoring the east edge of downtown, the city is considering whether to pull back. The Hotel Landing, a downtown boutique hotel with on-site restaurant Nine Twenty Five, abuts an R-3A neighborhood, where residents have reported issues with occasional loud parties, cut-through traffic, and cooking odors regularly drifting from the restaurant into nearby homes.
Some observers note a contrast between the city’s previous encouragement of small-scale lodging in residential zones and its current deliberations on restricting or eliminating such uses.
What About Existing Rentals?
If the city opts to ban or phase out STRs, property owners who already hold valid licenses may be protected under state law.
Minnesota’s legal non-conforming use doctrine allows property owners to continue a use that was lawful at the time it began—even if the rules change later. These protections can apply if the use was permitted, continuous, and compliant with all applicable standards.
For Wayzata, that means STRs operating legally under the 2024 licensing ordinance—especially in zones that previously allowed similar lodging uses—could potentially continue, even if new restrictions are adopted.
Next Steps
The City Council is not expected to vote immediately. Instead, staff will gather feedback and determine whether to begin drafting ordinance changes. Any proposed amendments would be subject to review by the Planning Commission and require formal public hearings.
The topic of short-term rental regulation is scheduled for discussion at the Wayzata City Council workshop on Tuesday, May 6, 2025. While no formal action will be taken at the workshop, city staff will present background information, enforcement data, and policy options for councilmembers to consider.
The session is intended to help the council determine whether to pursue a zoning code amendment, expand the city’s current licensing requirements, or prohibit short-term rentals in some or all residential areas. Public comment is not typically taken during workshops, but residents are encouraged to follow the discussion and submit written feedback in advance.
