LANSING, Mich.—Michigan may soon become the latest of a handful of vacation destination states to enact laws protecting the short-term residential rental industry.
Since the advent of online booking and collection services such as Airbnb and VRBO, short-term rentals have become big business in states like Arizona, Florida, Idaho, and Tennessee, all of which have used state law to keep municipalities from banning or over-regulating short-term rental properties.
The popularity of short-term rentals is evident in places like Miami, Florida, and Scottsdale, Arizona. According to realtor.com, Miami has 10,024 active short-term rentals, while Scottsdale has 5,178. In Michigan, there were more than 17,000 short-term rentals operating through big agencies in 2019, a number which has grown substantially every year since.
A short-term rental is defined as the renting of a single-family home for a period of 30 days or less. It can range from a spare bedroom to an apartment, condo, or lavish beach house. They are commonly used for vacation retreats, and as temporary living quarters for visiting professionals, or by new hires arriving in a new community.
The explosive growth of short-term rentals has provoked controversy, pitting the rights of the individual homeowner to do with his property as he pleases, against the rights of his neighbor to the quiet enjoyment of his property.
Recently, a homeowner in St. Clair Shores, Michigan, who rented out his house short-term, was criminally charged by the city with operating a business in an area not zoned for rentals. This incident is seen by many, including Michigan think tank the Mackinac Center, and Michigan Realtors, who both became involved in the case, as an impetus for the new legislation.
The proposed law, Michigan Senate Bill 446, states that a short-term residential rental counts as residential, not commercial, use of a property. It declares that short-term rentals are to be considered a permitted use in all residential zones and are not subject to special-use or conditional-use permits different from those required for other dwellings in the same zone.
While preserving the power of a municipality to regulate public safety and health through ordinances governing noise, signage, and traffic, “or any other condition that may create a nuisance,” the bill demands that the rules must be consistently applied to all dwellings in the community. This clause prohibits local governments from imposing special ordinances specific to short-term rentals, such as a limit on the number of bedrooms, a limit on the number of people who can sleep in a bedroom, and the requirement of indoor parking.
Holly Tatman, a village manager in a Michigan lakeside resort community told the Epoch Times, “It’s odd that state government is coming down on the side of deregulation. They are usually the big regulators. This bill is tying the community’s hands. It takes away local control.”
The Michigan Municipal League (MML), a major opponent of the legislation, said in a statement, “Long-term residents deserve to have their property rights protected too…[the bill] completely strips municipalities of reasonable zoning regulations.”
The MML cited the experience of Sedona, Arizona, which, it said, saw one-third of its housing convert to short-term rentals following deregulation similar to that proposed in Michigan. The organization says the trend contributed to a shortage of affordable housing.
On the other hand, the Michigan Realtors, strong supporters of the new legislation, contend that short-term rentals contribute to the rise in property values in a community, and that only the well-maintained operations succeed in the marketplace.
Michigan Realtors vice-president of public policy and legal affairs, Brad Ward, told the Epoch Times, “At the heart of this bill is the protection of private property rights.”
The principal sponsors of the bill are Senator Aric Nesbitt (R-Lawton) and Representative Sarah Lightner (R-Springport). The legislation has been forwarded out of committee with a recommendation of approval in the Senate. The bill has been referred for its second reading in the House. No date has been set for a vote by the full legislature.
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