By Paul J Sniadecki, MLSA Board Director
(Significant portions of this article first appeared in media issued by the Michigan Townships Association, MTA)
Short-term and vacation rentals are nothing new along Michigan’s picturesque lakeshores and lush forests. But in recent years, rental homes/rooms are increasing in areas where year-round residents live, especially on larger inland lakes. The areas are zoned for “residential use”, but some property owners are not using their homes in a “residential” manner. A growing number of people are using Airbnb.com and other online services to rent houses, condos or even a single room in their lake home. The result is riparian homeowners are now living side by side with short-term renters on vacation. While not the case in all situations, this has negatively impacted the quality of life of some riparian residents due to noise, late-night parties, parking and other disturbances.
As local units of government have crafted ordinances that best suit their residents, both the real estate and rental industries have pushed for state level legislation to preempt local regulations and zoning. Current Bill HB 4046, sponsored by Rep. Jason Sheppard (R-Bedford Twp.), tackles this issue by effectively stripping local townships, cities and villages, of their authority to regulate the location (zoning) of vacation and short-term rentals of 28 days or less.
In recent weeks another Bill, under primary sponsor Rep. Jim Lilly (R-Park Twp.) proposed what’s called the “Michigan Short-Term Rental Promotion Act” as an alternative approach. Under HB 4554, the primary bill in the package, all short-term rentals of no more than 30 consecutive days would be required to register their property with the state. The bill clarifies that personal information, such as the street address and owner’s name, is exempt from the Freedom of Information Act. Additionally, the bill states that local units cannot have any zoning ordinance that effectively prohibits short term rentals in compliance with the Michigan Zoning Enabling Act. The bill would require anyone who owns a short-term rental to carry $1 million in liability insurance, either on their own or through their hosting platform, such as Airbnb. The owner must also pay all taxes and assessments required by law. Any owner who violated the act would be subject to a fine of as much as $15,000.
HB 4554 would also create a work-group of stakeholders, including local units, the tourism industry and real estate professionals. The group would be tasked with assisting the state Department of Licensing and Regulatory Affairs (LARA) with developing best practices and model short-term rental zoning.
The issue of state level regulation of short-term rentals has been around for a few years. To date, no action has been taken by the Michigan Legislature. However, 2019 could be different. Riparians are encouraged to exercise their right to contact their elected representatives to share their support, or opposition, to the current Bills pending in Lansing.