WAYZATA — The City of Wayzata has been hit with its second lawsuit over its recent ban on short-term rentals, marking another significant legal chapter in a community long shaped by questions of land use, property rights, and the evolving character of lakeside living.
A group of five property owners — Jeffrey Lee Holmers; 306 Barry Ave N LLC; Scott Tripps; 1020 Lake Street E LLC; and Anna Ovsyannikova & Yevgeniy Ogranovich — filed a mandamus and declaratory judgment action in Hennepin County District Court on November 21, 2025, asserting that the City’s new short-term-rental prohibition violates state law, deprives them of vested property rights, and was adopted without the public-process safeguards required of zoning ordinances.
At the center of the dispute is Ordinance 852, approved by the Wayzata City Council this fall. The ordinance prohibits any lease, license, or occupancy of fewer than 30 days within city limits, effectively ending Airbnb-style rentals beginning April 1, 2026 — the day after all existing rental licenses expire.
A Second Lawsuit on the Same Issue
Wayzata’s neighborhoods, from Ferndale to Barry Avenue, have long evolved alongside broader debates about growth and preservation. As early as the 1850s, the first settlers — Oscar Garrison among them — encountered conflicts over land use and community identity. Today’s disputes over short-term rentals echo that history: a modern tension between welcoming visitors and protecting residential tranquility.
According to the newly filed complaint, each plaintiff purchased and renovated their Wayzata property specifically to operate it as a short-term rental, relying on City ordinances that expressly allowed rentals of any duration. All hold valid City rental dwelling licenses set to expire in March 2026.
The lawsuit argues that:
- The City treated Ordinance 852 as a rental-license change – but it is actually a zoning ordinance, triggering procedural requirements under the Minnesota Municipal Planning Act, including a mandatory public hearing before the Planning Commission. The complaint alleges no such hearing occurred.
- Plaintiffs made substantial financial investments in reliance on the City’s long-standing permission for short-term rentals — creating what they claim are vested rights that cannot be eliminated without compensation.
- The ordinance constitutes an unlawful taking because it removes a previously permitted use without due process or compensation.
- The April 1, 2026 effective date is intentionally tied to the expiration of existing rental licenses, creating a de facto phase-out without grandfathering.
The plaintiffs are asking the court to:
- Issue a writ of mandamus compelling the City to comply with required zoning-amendment procedures.
- Declare the ordinance void as adopted.
- Restore their ability to continue lawful short-term rental operations.
A Broader Community Conversation
Short-term rentals have become increasingly visible throughout Lake Minnetonka communities, from year-round visitors drawn to the lake to seasonal tourism tied to events such as James J. Hill Days.
Wayzata is not alone in facing this issue. Across the Twin Cities and greater Minnesota, cities are balancing hospitality, housing stability, and neighborhood character. But each community’s approach reflects its own history. In Wayzata — a town that grew from Dakota homelands, railroad hospitality, and generations of families drawn to the lake — the discussion is particularly resonant.
What Comes Next
The City will be required to formally respond to the complaint. Under Minnesota law, an answer is typically due within 21 days of service. As with any mandamus action, the court will consider whether the City had a clear legal duty to follow specific procedures when adopting the ordinance.
The case carries implications not only for the five plaintiffs but for all Wayzata property owners and future City policymaking. The ruling may clarify whether short-term-rental restrictions must be treated as zoning changes — requiring Planning Commission involvement — or whether they may be adopted directly through licensing provisions.
Wayzata.com will continue to follow the proceedings as the community works through yet another question at the intersection of tradition, property rights, and the evolving rhythms of lakeside life.
