Overview: Are Short-Term Rentals Allowed in Watertown, MN?

Based on the available information provided, short-term rentals appear to be allowed in Watertown, MN. This is evidenced by real estate listings promoting "Airbnb Investment Properties" specifically in Watertown, indicating market activity and local acceptance of STR operations. However, I must note significant limitations in the regulatory information provided.

How to Start a Short-Term Rental Business in Watertown, MN

While specific city-level STR regulations were not found in the provided documents, investors should follow this general framework:

1. Property Acquisition: Focus on properties in residential zones that could accommodate STR use
2. Zoning Verification: Confirm your property is in an appropriate zone for rental operations
3. Business Registration: Register your business with Carver County and obtain necessary tax identification
4. Property Preparation: Ensure the property meets safety, fire, and building codes
5. Insurance Acquisition: Secure comprehensive property and liability coverage
6. Marketing Setup: Register with platforms like Airbnb, VRBO, or Booking.com

Required Documents, Permits, Licenses, and Guidelines

Based on the 2024 Watertown Fee Schedule, the following permits and licenses are available:

Business Licenses and Permits

• General Business License: Application fees vary by business type
• Mobile Food Unit License: $100.00 (Annual)
• Peddler Permit: $100.00 (Annual)
• Adult Use License: $20,000.00 application fee (if applicable)

Property-Related Permits

• Zoning Permit: $75.00 (for fences, swimming pools, sheds, etc.)
• Building Permits: Required for construction, renovation (fees based on valuation)
• Rental Housing Inspection: Per rental inspection ordinance

Fire Department Requirements

• Fire Alarm System: $300.00 fee for false alarms after three previous offenses
• Fire Suppression Systems: May be required based on property type

Important Note: A specific short-term rental permit was not identified in the 2024 fee schedule, which could indicate either:

• STRs are regulated under existing business/property codes
• No current licensing requirement exists
• STR-specific regulations may be covered under rental housing inspection requirements

City, County, and State Regulations

City of Watertown Regulations

Zoning Considerations: The 2021 City Council meeting minutes reference discussions about "prohibiting short-term living conditions" in the MU-BRLI (Mixed-use Business, Residential, Light Industrial) zoning district, specifically noting:

"Commissioners wanted to make sure the proposed language was adequate to prohibit short-term living conditions within the units."

This suggests the city has considered STR limitations in specific zoning areas, but no complete prohibition was established.

Community Center Use: The city has detailed policies for private event space rentals at the Community Center, but this doesn't directly relate to STRs.

Carver County Level

No specific STR regulations were found in the provided documents at the county level.

Minnesota State Regulations

General Requirements for STRs in Minnesota:

• Minnesota typically requires STR operators to collect and remit state sales tax (6.875% statewide rate plus local taxes)
• Lodging taxes may apply depending on local jurisdiction
• Properties must comply with Minnesota Residential Code requirements
• No specific state-level ban on STRs exists

Contact Information for Local Authorities

City of Watertown

• Address: 309 Lewis Avenue South, P.O. Box 279, Watertown, MN 55388
• Phone: 952-955-2681
• Key Personnel:
  • City Administrator: Shane Fineran
  • City Planner: Mark Kaltsas
  • Fire Department: Contact through City Hall

For STR-Specific Inquiries:

1. Contact the City Administrator's office first
2. Consult with the City Planner for zoning questions
3. Fire Department for safety requirements

Sources and Links

1. City Council Meeting Minutes - March 9, 2021: www.watertownmn.gov/AgendaCenter/ViewFile/Item/1425?fileID=1372

   • Contains discussion of STR considerations in zoning amendments

2. 2024 Fee Schedule Ordinance: www.watertownmn.gov/AgendaCenter/ViewFile/Item/3787?fileID=2593

   • Official permit and licensing fees (current through January 2024)

3. Facebook Statement on STR Enforcement: www.facebook.com/watertowngov/posts/city-of-watertowns-statement-on-short-term-rental-enforcementthe-city-of-waterto/1101161712114119/

   • (Note: Content was not provided/accessible)

4. Airbnb Investment Properties Market Data: www.minnesotacommercial.com/watertown-commercial/airbnb-investment-properties-for-sale/

   • Demonstrates market presence of STR properties in Watertown

Important Disclaimers

Critical Limitations: The provided documents contain significant gaps regarding specific STR regulations:

• No explicit STR licensing requirement was found in the 2024 fee schedule
• The Facebook statement content was inaccessible
• No comprehensive city-wide STR ordinance was identified
• Zoning regulations specifically mentioning STRs were limited to one discussion in 2021

Recommendation: Before investing, contact Watertown City Hall directly at 952-955-2681 to confirm:

1. Current STR zoning requirements
2. Licensing requirements
3. Any recent ordinance changes
4. Safety and inspection requirements
5. Tax obligations (sales tax, lodging tax, property tax implications)

Market Evidence: The existence of "Airbnb Investment Properties" listings in Watertown suggests the market considers STRs viable, but regulatory compliance should be verified directly with local authorities before purchase or operation.