Minnetonka Bans Investor STRs: Homestead-Only Rule Takes Effect

If you own a Minnetonka short-term rental as an investment property rather than your primary home, the city just closed the door on you. On June 8, 2026, the Minnetonka City Council adopted a new STR ordinance requiring every registered short-term rental to be homesteaded, meaning the property must be the owner's primary residence. Non-owner-occupied investment STRs are no longer eligible for registration, effective immediately.

What the Ordinance Actually Does

The rule is straightforward and sweeping. Minnetonka is not adding a new fee tier or tightening a noise ordinance. It is eliminating an entire category of STR operator from the market. If your property is not classified as your primary residence for homestead purposes, you cannot register it as a short-term rental in Minnetonka. Full stop.

The homestead requirement was not a surprise to city residents. According to the city's 2026 Community Survey, 55% of Minnetonka residents supported the ordinance, giving the council a clear mandate to act.

The Date That Matters for Existing Hosts

The ordinance passed on June 8, 2026, which means investor-owned STRs are already operating out of compliance. The city has not announced an immediate shutdown sweep, but the mechanism for enforcement is built into the renewal process. The city requires existing registrations to be evaluated against the new homestead standard at next renewal. That means your current registration may carry you to its expiration date, but it will not survive renewal if your property lacks homestead classification.

Do not wait for a renewal notice to figure out where you stand. The time to check is now.

What Hosts Need to Do Right Now

The single most important step is to check your property tax records for homestead classification status before attempting renewal. Homestead status is assigned by the county, not the city, and it reflects whether the property is your primary residence. If your Minnetonka STR is listed as a non-homestead property on your tax records, that is the signal that you are no longer eligible to register under the new ordinance.

• Pull your current property tax statement and confirm the homestead classification.
• If the property is classified as non-homestead, you are no longer eligible for STR registration in Minnetonka under the new rule.
• If you believe your homestead status is incorrect, contact Hennepin County to resolve the classification before your next renewal attempt.
• Do not submit a renewal application while your classification is in question. A lapsed or denied registration creates a compliance record.

Why This Matters Beyond Minnetonka

Minnetonka's move is part of a broader pattern of cities using homestead and owner-occupancy requirements as a surgical tool to remove investor-owned STRs without banning short-term rentals outright. It targets the business model, not the activity. Owner-occupants who rent out their primary home are unaffected. The investor who bought a lakeside property specifically to run as a full-time rental is the target, and the ordinance is precise enough to hit that mark without touching the host who rents a spare room or lists their home while traveling.

For hosts operating in the Minneapolis metro, this is a signal worth watching. Minnetonka had community survey data backing the move, and other suburban cities in the region are watching the rollout closely.

The Bottom Line

The Minnetonka homestead-only ordinance is already in effect. If your STR is your primary residence and your tax records reflect that, you are likely in good shape at renewal. If your STR is an investment property, you are now operating outside the rules the city has set, and renewal will not be available to you under the current ordinance. Check your homestead status today, not the week your registration expires.

For the complete Minnetonka compliance guide including tax calculator, checklist, and daily monitoring, see Minnetonka, MN STR Regulations.