Stillwater Mn Cap Licenses: Clerks, Not Occupancy Ranking

Jacob Mishalanie
Aug 8
12 min read

Updated: 16 hours ago

An aerial view of downtown Stillwater, Minnesota along the St. Croix River, home to the city's Fodor's Top 10-rated antiquing district

Before 2017, Short-Term Rentals Weren't Legal in Stillwater at All

Stillwater, Minnesota's defining current fact isn't seasonal or competitive — it's regulatory. Before Ordinance 1093 passed in 2017, short-term rentals were not permitted in the city under any framework. The ordinance changed that, legalizing STRs in Stillwater for the first time under a license system, and in the same stroke it capped the total number of licenses available at 50 outside the city's Central Business District. That's not a soft guideline or a zoning suggestion a variance can work around — it's a hard numeric ceiling that has now had close to a decade to fill.

One source reports that as of its snapshot, only 1 license remained unclaimed outside downtown. If accurate, that means Stillwater's STR market outside the CBD is functionally closed to new entrants: a would-be host can't simply buy a house and apply for a license the way they could in most markets. This is exactly the kind of number that goes stale fast, though, and this post is not going to repeat it as settled fact. The currency of "1 remaining" is unclear from available research and needs to be re-verified directly with the City of Stillwater — most likely through its planning or community development department — before anyone makes a buying decision on the strength of it.

It's worth sitting with why a city would move from zero tolerance to a capped, licensed framework rather than an open one. A hard cap set at the moment of legalization suggests the city council was managing a real tension: acknowledging that STRs were already happening informally, or that demand was real enough to formalize, while trying to contain the downstream effects — traffic, parking pressure, and neighborhood character change — that an uncapped rollout might have caused in a town this size. That context matters for anyone hoping the cap might simply expire or sunset on its own; nothing in the available research suggests Ordinance 1093 was written as a temporary measure.

Why This Matters More Than a Typical STR Ordinance

Plenty of towns cap STR licenses, and plenty of hosts have learned to treat those caps as soft ceilings that get raised under pressure once a city sees the tax revenue. Stillwater's cap reads differently for a structural reason: the city sits directly on the St. Croix River, a federally designated National Scenic Riverway. That federal protection already limits shoreline commercial development independent of anything the city council decides about STRs — meaning Stillwater has less room to expand its buildable, licensable inventory even if it wanted to loosen the cap. The riverway designation isn't a local political mood that could shift with the next election; it's a durable, external constraint that makes the current 50-license ceiling more likely to hold than a typical municipal cap.

That combination — a fixed license count that's reportedly almost exhausted, sitting inside a geography that structurally resists expansion — is what separates Stillwater from a market where a cap is really just a speed bump. For an owner who already holds one of the 50 licenses, or a buyer weighing whether to chase the last one, the practical question isn't "will this cap get raised soon" so much as "how do I verify exactly where the count stands today."

There's also a second-order effect worth naming: a genuinely fixed supply cap changes the economics of every other lever a host might normally pull. In an open market, an underperforming listing can always be undercut in price by more supply flooding in behind it, which caps how much a scarcity narrative alone can support in rate. In Stillwater, if the cap really is this tight, that competitive pressure from new entrants simply doesn't exist in the same way — the ceiling on rate is set more by what the market will bear for a differentiated stay than by fear of a wave of new listings undercutting it next season.

One number is worth sitting with directly: AirDNA counts 54 active listings across Stillwater as of its most recent snapshot — four more than the 50-license cap that applies outside the Central Business District. That gap isn't necessarily an error. The most likely explanation, consistent with the FAQ point below, is that Stillwater's Central Business District operates under its own separate licensing framework rather than sharing the 50-unit ceiling, which would mean downtown listings sit outside the count this ordinance caps. A second, less likely possibility is that AirDNA's listing count includes properties operating without a current license, or blends in traditional bed-and-breakfasts and inns that predate Ordinance 1093 under a different legal category entirely.

Either way, the discrepancy points a serious buyer toward a specific diligence question: don't just ask the city how many of the 50 non-CBD licenses remain, ask separately what governs STR operation inside the Central Business District and how many licensed units already operate there. A downtown-adjacent property near the antiquing district may be working under an entirely different, and possibly less constrained, licensing path than a property just outside that boundary — which could meaningfully change the buying calculus for two houses a few blocks apart.

The Two Operating Rules That Come With a License

Getting licensed is only half the compliance picture. Two operating rules apply on top of the license itself, and both are specific enough to change how a host actually runs the property day to day. First, guest events and parties are banned outright — this isn't a noise-complaint-triggered enforcement action but a standing condition baked into the license itself, meaning a host who books out their Stillwater listing for a wedding block or a birthday party is violating the license regardless of whether a neighbor ever complains.

Second, all guest parking must be on-site. In a dense, historic downtown where street parking is limited and actively contested with the retail and restaurant traffic that the antiquing district and breweries generate, this is a real design constraint, not boilerplate. A host or buyer should walk the actual lot or driveway and confirm it can genuinely accommodate the guest count being marketed in the listing — not assume overflow guests can find street parking nearby, because the license doesn't allow for that assumption in the first place.

Both rules point toward the same underlying city priority: protecting the everyday livability of a small, dense, historic downtown that also happens to be a major tourism draw. A host who treats these two rules as a ceiling to work around rather than a genuine operating constraint risks the license itself, which given how scarce that license may now be, is a materially higher-stakes mistake in Stillwater than it would be in a market where a replacement license is one application away.

Neither rule comes with a published penalty schedule in available research, but the pattern in capped-license markets generally holds: a licensing authority that controls scarce inventory typically treats violations as grounds for suspension or non-renewal rather than a simple fine, because the deterrent has to be proportional to what's at stake. In a market where a replacement license may not exist to apply for, losing a license over a preventable parking or noise violation is a categorically worse outcome than in an open market, and that asymmetry is itself a reason to treat both rules as core to the business plan rather than fine print reviewed once at closing.

What to Actually Verify Before Relying on "1 License Left"

Given how much weight the "1 remaining" figure could carry in a buying decision, it's worth being explicit about what a serious buyer or current owner should confirm directly with the city rather than take from secondhand research: the current count of issued versus available licenses outside the Central Business District, whether the Central Business District itself runs under a separate or unlimited framework, whether the city maintains any kind of waitlist or lottery process for when a license is relinquished, and whether Ordinance 1093 has been amended since 2017 in ways that changed the cap number itself. None of those answers were confirmed with certainty in this research, and that's the honest position to take rather than presenting a single scraped number as current fact.

A practical diligence path for a buyer: request the city's current STR license registry or a written confirmation of remaining availability before signing a purchase agreement contingent on STR use, rather than relying on a listing agent's or seller's verbal assurance that "the license transfers" or that "there's still room under the cap." Given the apparent scarcity, a city planning department is likely to have fielded this exact question before and should be able to give a direct, current answer faster than most secondary research can.

What the Cap Means for a Buyer or Current Owner

If the license count really is down to 1, or close to it, the practical implication is straightforward: a licensed Stillwater short-term rental isn't just a compliant property, it's a scarce, largely non-reproducible asset. New competitors mostly can't get licensed to challenge an existing listing head-on, which is a fundamentally different competitive environment than an oversupplied market where anyone can list a spare bedroom next week. That scarcity is also exactly why professional positioning and marketing matter more here than in a market where differentiation barely moves the needle — a topic covered in more depth in this cluster's companion piece on whether a marketing agency is worth it for Stillwater owners.

For a current owner holding one of the 50 licenses, the honest takeaway is that the regulatory floor under the investment is unusually solid. For a prospective buyer, the honest takeaway is that acquiring a license-eligible property, or a property that already carries a transferable license, should be treated as the central diligence question — arguably more important than the usual ADR-and-occupancy math, because none of that math matters if a license genuinely isn't available.

None of this changes the performance picture underneath the license, either. AirDNA reports 54 active listings at a $413 average daily rate and named-town occupancy pins as of 2026-07-31, while AirROI's tier data shows top-10% listings command $618 or more a night against a $317 median — a real, sourced spread that says a scarce license paired with weak marketing is still leaving revenue on the table. The cap protects the opportunity to compete; it doesn't guarantee the outcome.

It's also worth placing Stillwater's investment case next to a nearby but structurally different Minnesota market: Brainerd Lakes, well north of the Twin Cities, is a larger, more sprawling lake-cabin region without anything resembling Stillwater's fixed license ceiling. Brainerd's thesis rests on lake-access scarcity and cabin inventory spread across a wide geography; Stillwater's rests on a hard numeric cap inside a compact, walkable historic downtown. An investor comparing the two shouldn't expect the same playbook to work in both — Brainerd rewards finding the right lake and dock access, while Stillwater rewards holding or acquiring one of a genuinely fixed number of licenses in a market that can't expand its way out of scarcity.

Frequently Asked Questions

What is Ordinance 1093 in Stillwater, Minnesota?

Ordinance 1093, passed in 2017, legalized short-term rentals in Stillwater for the first time under a license system. Before it passed, STRs were not permitted in the city at all. The ordinance also capped total licenses at 50 outside the Central Business District. The ordinance changed that, legalizing STRs in Stillwater for the first time under a license system, and in the same stroke it capped the total number of licenses available at 50 outside the city's Central Business District.

How many STR licenses are left in Stillwater, Minnesota?

One source reports as few as 1 license remaining outside the Central Business District at the time of its snapshot, but that figure's currency is unclear from available research. Anyone relying on it for a buying decision should reverify the current count directly with the City of Stillwater. Given how much weight the "1 remaining" figure could carry in a buying decision, it's worth being explicit about what a serious buyer or current owner should confirm directly with the city rather than take from secondhand research: the current count of issued versus available licenses outside the Central Business District, whether the Central Business District itself runs under a separate or.

Can I still get a short-term rental license in Stillwater, MN?

It depends on the current, verified license count, which this research could not confirm with certainty. If the reported figure of 1 remaining license is accurate and current, new licensing outside the Central Business District is close to fully closed. Confirm directly with the city before assuming either way. The most likely explanation, consistent with the FAQ point below, is that Stillwater's Central Business District operates under its own separate licensing framework rather than sharing the 50-unit ceiling, which would mean downtown listings sit outside the count this ordinance caps.

Does the Central Business District have a separate STR license rule in Stillwater?

The 50-license cap applies specifically outside the Central Business District, which implies the CBD may run under a different framework, but this research did not confirm the specific CBD rules. A buyer focused on a downtown property should verify the applicable rules directly with the city. One number is worth sitting with directly: AirDNA counts 54 active listings across Stillwater as of its most recent snapshot — four more than the 50-license cap that applies outside the Central Business District.

What operating rules apply to a licensed Stillwater short-term rental?

Guest events and parties are banned outright as a standing license condition, and all guest parking must be on-site. Both apply regardless of whether a neighbor ever files a complaint, and a host should confirm their property's parking can genuinely accommodate the guest count they're marketing. First, guest events and parties are banned outright — this isn't a noise-complaint-triggered enforcement action but a standing condition baked into the license itself, meaning a host who books out their Stillwater listing for a wedding block or a birthday party is violating the license regardless of whether a neighbor ever complains.

Why is Stillwater's STR license cap unlikely to be raised?

Croix River, a federally designated National Scenic Riverway. That federal protection already limits shoreline commercial development independent of city policy, giving Stillwater a structural, durable reason to have little room or appetite to expand the license cap even under demand pressure. That federal protection already limits shoreline commercial development independent of anything the city council decides about STRs — meaning Stillwater has less room to expand its buildable, licensable inventory even if it wanted to loosen the cap.

Is a Stillwater STR license transferable to a new owner?

This research did not confirm Stillwater's specific license transfer rules. Given how tight the cap reportedly is, whether a license transfers with a property sale versus reverting to the city is a critical diligence question a buyer should confirm directly with the city before making an offer. A practical diligence path for a buyer: request the city's current STR license registry or a written confirmation of remaining availability before signing a purchase agreement contingent on STR use, rather than relying on a listing agent's or seller's verbal assurance that "the license transfers" or that "there's still room under the cap." Given the apparent scarcity, a city planning department is likely..

Why This Matters More Than a Typical STR Ordinance?

Before Ordinance 1093 passed in 2017, short-term rentals were not permitted in the city under any framework. Given how much weight the "1 remaining" figure could carry in a buying decision, it's worth being explicit about what a serious buyer or current owner should confirm directly with the city rather than take from secondhand research: the current count of issued versus available licenses outside the Central Business District, whether the Central Business District itself runs under a separate or unlimited framework, whether the city maintains any kind of waitlist or lottery process for when a license is relinquished, and whether Ordinance 1093 has been amended since 2017 in ways that.

What to Actually Verify Before Relying on "1 License Left"?

Before Ordinance 1093 passed in 2017, short-term rentals were not permitted in the city under any framework. A practical diligence path for a buyer: request the city's current STR license registry or a written confirmation of remaining availability before signing a purchase agreement contingent on STR use, rather than relying on a listing agent's or seller's verbal assurance that "the license transfers" or that "there's still room under the cap." Given the apparent scarcity, a city planning department is likely to have fielded this exact question before and should be able to give a direct, current answer faster than most secondary research can.

What the Cap Means for a Buyer or Current Owner?

Stillwater, Minnesota's defining current fact isn't seasonal or competitive — it's regulatory. For a current owner holding one of the 50 licenses, the honest takeaway is that the regulatory floor under the investment is unusually solid. For a prospective buyer, the honest takeaway is that acquiring a license-eligible property, or a property that already carries a transferable license, should be treated as the central diligence question — arguably more important than the usual ADR-and-occupancy math, because none of that math matters if a license genuinely isn't available.