By Emma Nelson
Housing market showing shifts
Stillwater home values have changed significantly in recent months. The average house price is around $460,000, an increase of nearly 4% year-over-year according to Zillow, though other metrics show a median sale price closer to $426,000—a drop of over 10% compared to the same period last year. Homes also tend to sell quickly, often within 12 to 20 days. These fluctuations point to both demand and affordability tensions in our community.
One of the major drivers behind higher costs for new homes is lot size and zoning. A recent report found that most new homes in residential subdivisions are single-family detached types on large lots, while townhomes make up only about 12% of homes built in these areas—even though smaller-lot housing is typically more affordable.
Short-term rentals under scrutiny
Stillwater’s rules for short-term rentals (like those listed on Airbnb or Vrbo) limit licenses to 50 properties outside the Central Business District. Changes in occupancy, noise, or safety can lead to suspension, revocation, or provisional licensing under a “three-strikes” policy tied to substantiated complaints. Renters and neighbors are increasingly voicing concerns about disturbances, parking, and unclear enforcement procedures.
Infrastructure, roads, and community investment
The city is working on several major infrastructure projects. Among them: replacing galvanized water service lines, improving Myrtle Street, and a large 2026 street improvement project. County and state work includes phases of County Highway 5, and a study of the intersection at Highway 36 and Lake Elmo Avenue to improve vehicle flow and safety.
The Stillwater Lift Bridge has also reactivated its seasonal lift schedule, operating regularly now that warmer weather and boat traffic are increasing. The bridge opens on demand every 30 minutes when boats are present, from early morning through midnight. It plays a critical role for pedestrians, cyclists and drivers crossing between Minnesota and Wisconsin.
Zoning reform and affordable housing proposed
City officials are discussing proposed changes as state legislation moves forward. Some bills would require higher density housing in commercial districts and allow certain housing types in single-family zones. Many in Stillwater are weighing the balance between increasing affordable housing supply and maintaining neighborhood character, including in the historic district. A resolution to uphold local zoning authority has already been passed in part to push back on overly broad mandates.
Meanwhile, affordable and subsidized housing programs are being updated. Project-based Section 8 housing remains a vital resource. One such property in Stillwater is Birchwood Townhouse, among several that give low-income households stable housing options. Another program, Orleans Homes, provides privately owned units for income-eligible renters. Yet, waiting lists and limited availability highlight the gap between demand and supply.
What this means for residents
For homeowners and buyers: rising values and shrinking inventory mean assessing long-term investment carefully.
For renters: stable, affordable options are hard to come by, and navigating short-term rental impacts is becoming more essential.
For advocates and planners: flexible lot zoning, more diverse housing types, and community involvement in decisions about change are crucial to ensure Stillwater addresses growth but holds onto its sense of place.