Several members of the Duluth City Council said that under existing rules, they really had no choice but to approve five applications for vacation rental permits Monday night.

But at large Councilor Zack Filipovich announced plans to revisit those rules. He aims to lead a committee-of-the-whole meeting come Feb. 22, when he hopes the council will discuss how best to create a policy "that will help, so we don't have a heart-wrenching discussion, pitting neighbors against neighbors every time we get a controversial one of these." Filipovich acknowledged the development of a new policy will likely require more than one meeting, however, suggesting the council could reasonably complete its work by March.

Lisa Kappenman lives on Observation Hill next door to an eight-bedroom house at 621 W. Fifth St. that is to be converted to a vacation rental property by its out-of-town owner, Ben Klismith. She urged the council to deny the permit request for the neighboring property, but said if they nevertheless did approve it the city should hold Klismith to account.

She suggested that if guests staying at the property disturb the neighborhood or behave in ways that imperil public safety, "we would ask that this permit be suspended or revoked."

Klismith said he would not condone guests loudly partying in the house and sees it as more of a family setting. "Luckily, Duluth has all the power to take away permits if there is disturbance of the peace. That's in the permit. It's not a right when it's issued. It's a privilege to run something, and it has to be a high bar that I'd be continuously held to by the neighbors and by the city, knowing it could be taken away at any point."

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Under the terms of Duluth's policy, the vacation rental home could have hosted as many as 17 guests at a time, but 3rd District Councilor Roz Randorf worked with Klismith and neighbors to voluntarily reduce the maximum capacity to 13 people. He also agreed to install a 7-foot-tall wooden privacy fence.

The original maximum capacity of the home struck 2nd District Councilor Joel Sipress as being something on a par with putting up "a small hotel" in a residential neighborhood. He called for the council to lower the maximum number of guests vacation rental properties may accommodate.

"I'm hoping we, as a council, with staff and the Planning Commission, can move quickly to get this loophole filled," Sipress said.

The Duluth City Council approved the necessary permits for this unoccupied four-unit apartment building on 19th Avenue West in Duluth to be converted entirely into a vacation rental property. (Clint Austin / caustin@duluthnews.com)
The Duluth City Council approved the necessary permits for this unoccupied four-unit apartment building on 19th Avenue West in Duluth to be converted entirely into a vacation rental property. (Clint Austin / caustin@duluthnews.com)

The council also unanimously approved vacation rental permits for each of the four units in a previously unoccupied apartment building at 7 N. 19th Ave. W. Because the building is located in a commercial "form district," limits that govern the number of vacation rental permits that can be issued throughout the rest of the city do not apply there.

A former member of the Duluth Planning Commission, 5th District Councilor Janet Kennedy said: "I remember when vacation rentals first came to Duluth. I really had an issue with the loss of housing.

"It seems like it's blown way out of proportion for me," she said.

If not redeveloped into a vacation rental property, the building would likely have provided affordable housing, 1st District Councilor Gary Anderson said. "We absolutely cannot afford to allow an apartment building like this to be turned into vacation dwelling units," he said.

But Anderson conceded that the permit application conforms with current standards, meaning that the council lacked adequate grounds for denial.