News

A Hot Topic for Lake and Waterfront Home Owners: Short Term Rentals

By September 13, 2017 No Comments

 

By Lon Nordeen
Michigan Waterfront Alliance
Board of Directors

This issue has generated a considTrevor-WI-2-05beb5erable amount of interest and debate in Michigan recently and there are a number of good reasons for all of the controversy. First is the accelerating trend toward owners of residential homes, second homes, cabins, condominiums and other residential dwellings (many located on or near lakes or other water bodies) offering their property out for daily or short- term rental to secure additional cash flow through programs like Air BNB, VRBO, Home Away or other concepts which are often scheduled on the computer through third party agencies. This is a different concept than the older rental models we have long seen with weekly to monthly vacation rentals or other housing deals for longer term use by a single family or group that sign a lease.

There are pros and cons with this short-term lease concept:

Pro: property owners have the opportunity to expand their revenue sources and more use of their residence. Realtors and other groups also benefit. The consumers benefit as they have additional short-term housing options outside of traditional hotels, motels, bed and Breakfasts etc.

Con: Noise, increased traffic and activity, rentals may change character of neighborhood, lack of control, possible real or perceived impact on property values, lake/water impact.

Zoning Issues: The MI Zoning Enabling Act gives townships and counties primary responsibility for local zoning and control. Since the expanded short-term rental concept is a relatively new many of these local government bodies have not created new ordinances and rules covering this issue. However due to neighbor concerns and complaints, some townships have begun to address this issue. Actions taken by local townships and municipalities in Michigan have ranged from banning short-term rentals, placing limits on the duration of such activity, and local efforts to beef up zoning and building code rules to try and limit homeowner options.

Since in nature – every action causes a equal and opposite reaction – homeowners wanting to participate in short term rentals have sought solutions in Lansing. Legislative action on this issue has been proposed by Senator Joseph Hune R-22nd District introduced SB 329 and Representative Jason Sheppard R-Bedford R-56th district, HB 4503. Both bills are in their respective Tourism and Outdoor Recreation Committees for review since April 2017. These bills would allow residents to have short term rentals for up to 28 days and classify this effort as a residential not commercial property use so that all residential dwelling could classify. MI residents have voiced strong views to their elected representatives about this issue.

House Bill 4503 as proposed:  April 25, 2017, Introduced by Rep. Sheppard and referred to the Committee on Tourism and Outdoor Recreation. A bill to amend 2006 PA 110, entitled “Michigan zoning enabling act,” (MCL 125.3101 to 125.3702) by adding section 206b. THE PEOPLE OF THE STATE OF MICHIGAN ENACT:  SEC. 206B. (1) FOR THE PURPOSES OF ZONING, ALL OF THE FOLLOWING APPLY TO THE RENTAL OF A DWELLING, INCLUDING, BUT NOT LIMITED TO, SHORT-TERM RENTAL: (A) IT IS A RESIDENTIAL USE OF PROPERTY AND A PERMITTED USE IN ALL RESIDENTIAL ZONES. (B) IT IS NOT SUBJECT TO A SPECIAL USE OR CONDITIONAL USE PERMIT OR PROCEDURE DIFFERENT FROM THOSE REQUIRED FOR OTHER DWELLINGS IN THE SAME ZONE.  (C) IT IS NOT A COMMERCIAL USE OF PROPERTY. THIS SECTION DOES NOT PROHIBIT REGULATION APPLIED ON A CONSISTENT BASIS TO RENTAL AND OWNER-OCCUPIED RESIDENCES FOR NOISE, ADVERTISING, TRAFFIC, OR OTHER CONDITIONS. AS USED IN THIS SECTION, “SHORT-TERM RENTAL” MEANS THE RENTAL OF ANY SINGLE-FAMILY RESIDENCE OR 1-TO-4-FAMILY HOUSE OR DWELLING UNIT, OR ANY UNIT OR GROUP OF UNITS IN A CONDOMINIUM, FOR TERMS OF LESS THAN 28 DAYS AT A TIME.

“I introduced this biRep Jason Sheppardll to prevent the over-reach of local governments from banning homeowners renting out their home on a short-term basis. We promote to other states to come take a vacation in Michigan and we want to make sure visitors have a place that will accommodate them, to get the best experience of our beautiful State, whether that be a hotel or a short-term house rental.” said Representative Jason Sheppard (56th- Temperance) “To me, this is about you, a homeowner, and your right to rent out your home” added Sheppard. If successful, the legislation would serve to “take away” local control of vacation and short-term rentals.

In Michigan, the realtor association has taken up the cause to fight for short term rentals.

PRESERVE PRIVATE PROPERTY RIGHTS
ADVOCACY INITIATIVES / PRESERVE PRIVATE PROPERTY RIGHTS

Protect Property Rights and Help Michigan’s Tourism Industry
Tell Your Legislators to Support SB 329/HB 4503
Michigan has been a vacation and tourism destination for decades. The short-term rental of a fully furnished vacation home has long been a valued option for vacationers in Michigan.

 

CON Voices————————————————————————————————————————–

Also, there are many groups opposing these MI House and Senate Bills. The Michigan Municipal League has stated: “Short-term rentals are causing problems in many communities around the state by creating commercial activity in residential areas. Residential zoning exists to preserve the charter of neighborhoods and protect the property values for every home”.

The Michigan Township Authority has taken a strong position in opposition to these bills since they would reduce local control of zoning.
Providing analysis and insights for all things legislative impacting Michigan’s townships
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Short-term rentals, property tax exemptions for disabled veterans and pension reform all top the legislative agenda when lawmakers return to Lansing next month.
Both the House and Senate are on summer recess, putting all bills on hold while representatives and senators work in their districts. But when they return after Labor Day, they’re expected to dive into a large number of issues that will impact townships.

Short-term rentals—Of particular concern is legislation that would take townships out of the equation when it comes to regulating short-term vacation rentals. Two bills—House Bill 4503, sponsored by Rep. Jason Sheppard (R-Bedford Twp.), and Senate Bill 329, sponsored by Sen. Joe Hune (R-Hamburg Twp.)—would effectively strip townships and other municipalities of their authority to regulate where vacation and short-term rentals can be located. Instead, the bills would specify that short-term rentals of 28 days or less are a residential—not commercial—property use, allowing them in all residential zones.

Townships also could not require any special use permit of rentals that they don’t require for all other residential homes. Their ability to regulate would instead be limited to ordinances on noise, advertising, traffic and other conditions—completely dismantling ordinances enacted in townships throughout Michigan to help curb problems arising from short-term rentals.

The legislation also could impact communities that have rental ordinances as well as future zoning by local government.

The Legislature is expected to take up the HB 4503 and SB 329 this fall. MTA continues to urge township officials to contact their state representative and state senator to stop this harmful legislation.
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The Michigan Lake and Stream Associations has had many calls from its members and lake residents about this issue and has referred callers to the Michigan Waterfront Alliance. If you feel strongly about this issue please contact your local government body and state elected officials.
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