Short-Term Rentals and Vacation Rental Homes in Lake County, Minnesota

A 2022 moratorium, then permanent rules in 2023

Lake County adopted Interim Ordinance No. 19-2 on May 10, 2022, imposing a one-year moratorium on new vacation rental homes across all unincorporated areas of the county while the county studied permanent regulations. That moratorium expired on schedule, and on May 9, 2023, the Lake County Board of Commissioners approved amendments to Section 27.06A, Vacation Rental Home Requirements, within the county's Comprehensive Plan and Land Use Ordinance #12 -- the same ordinance that sets the county's general zoning and shoreland standards. The amended regulations took effect May 28, 2023, and the county began accepting new vacation rental home permit applications starting May 30, 2023. For a buyer, this history matters: a property's ability to operate as a vacation rental today depends on rules that are only a few years old and were adopted specifically in response to rapid growth in short-term rental activity along the North Shore -- not a long-settled, decades-old framework.

A density cap applies in specific named townships and unorganized territories

The amended ordinance imposes a cap on the number of vacation rental homes allowed in residential zoning districts within a specific list of areas: Unorganized Territory #1, Unorganized Territory #2, Beaver Bay Township, Crystal Bay Township, Silver Creek Township, Stony River Township, and Knife River. This is a meaningful, actionable detail for a buyer: in these named areas, a property's ability to obtain a new vacation rental home permit can depend on whether the area has already reached its cap, not simply on whether the property itself meets the ordinance's other standards. Before assuming a specific Lake County parcel can be permitted as a vacation rental, confirm with Planning & Zoning both (1) which township or unorganized territory the parcel sits in, and (2) whether that area currently has capacity available under the cap, since a seller's past ability to rent a property doesn't guarantee a new owner can obtain a permit if the area has since filled up.

Permit fees, and what to verify before counting on rental income

As of the 2023 amendments, an initial Vacation Rental Home permit in Lake County carries a $1,000 fee, with a $500 fee for renewal. This is a real, recurring cost to factor into any purchase decision that assumes rental income, not a one-time formality. Because Lake County's own ordinance was substantially rewritten in 2023 after a moratorium specifically driven by rapid market growth, a buyer should treat both the fee amount and the density-cap rules as subject to further change, and confirm the current version of Section 27.06A directly with the county rather than relying on the 2023 figures indefinitely.

1. Confirm which township or unorganized territory the property sits in, and whether that area is currently at or under its vacation-rental-home cap.
2. Ask whether an existing vacation rental permit on the property (if any) is currently valid and whether it transfers to a new owner, or whether a new owner must reapply and potentially face the area's cap even if the prior owner held a valid permit.
3. Budget for the current initial and renewal permit fees as an ongoing cost of operating the rental, and confirm the current fee schedule directly with Lake County Planning & Zoning rather than assuming the 2023 figures still apply.
4. If the property sits within the City of Two Harbors rather than unincorporated Lake County, confirm the city's own separate short-term rental rules, since Two Harbors administers its own ordinance independent of the county's Section 27.06A.