Key takeaways
- Mound, Orono, and Minnetrista prohibit renting a home for less than 30 days, with limited exceptions.
- Excelsior and Minnetonka allow short-term rentals only in an owner's primary residence, with a license or registration.
- Wayzata's 2025 ban was voided by a district court in March 2026, and the city then adopted a 12-month moratorium on new short-term rentals.
Short-term rental rules by city
| City | Current approach |
|---|---|
| Mound | Short-term rentals prohibited since 2018 |
| Orono | Rentals under 30 days prohibited since 2018; residents may rent one room to up to two people |
| Minnetrista | Short-term rentals prohibited since 2018 |
| Excelsior | Licensed rentals allowed only in a primary residence in R1 and R2 districts, plus upper floors in some commercial districts |
| Minnetonka | Registration required, and rentals must be the owner's homesteaded primary residence (adopted June 2026) |
| Wayzata | 2025 ban voided in court in March 2026; 12-month moratorium on new rentals adopted April 2026 |
| Tonka Bay | Adopted a licensing ordinance in 2018 allowing short-term rentals with a license |
How the bans started
In 2018, Orono, Minnetrista, and Mound each passed short-term rental bans after neighbors reported noise, parking problems, extra traffic, and trash. In Mound, most people who spoke at the public hearing opposed the ban, but the council passed it 4-1. One resident who supported it described living next to two rentals, one bad and one he called horrific.
Not every city went that way. Tonka Bay adopted a licensing ordinance instead, and Excelsior later allowed rentals in a primary residence.
Why it's still in the news
Wayzata is where the issue is most active. The city adopted Ordinance 852 in fall 2025 to prohibit short-term rentals through its rental licensing rules. Licensed operators sued, and in March 2026 a Hennepin County judge ruled the ordinance was a zoning regulation adopted without following the required zoning procedures, which made it void.
The council responded in April 2026 with a 12-month moratorium on new short-term rentals while it works on a zoning-based approach. Minnetonka, meanwhile, adopted a rule in June 2026 limiting short-term rentals to homesteaded primary residences.
What it means for buyers
Some buyers look at a lake home and assume summer weekends could help cover the mortgage. In much of the area, that isn't allowed. The rules depend on the city, not the lake, so two homes a mile apart can have completely different options.
Before buying with rental income in mind, check the current ordinance with the city, review any HOA rules, and keep in mind that a rule in place today can change. It's also worth knowing that neighbors in these towns tend to notice and report unpermitted rentals.
Sources
- Laker Pioneer: Mound prohibits short-term rentals (2018)
- Laker Pioneer: Short-term rental bans spreading across communities (2018)
- City of Excelsior: Short-Term Rental License Information
- City of Minnetonka: Renters and Landlords
- City of Wayzata: Short-Term Rentals
- Wayzata.com: Council approves moratorium on new short-term rentals
