It’s no secret that many cities have taken aim at short-term rental properties (STRs). They’ve instituted bans, they’ve required costly business licensing, and they’ve even levied criminal charges against property owners for zoning violations.
In Michigan, however, moves like those are about to get way harder.
That’s because two bills are moving through the state legislature that would stop municipalities from instituting special regulations against STRs. It would also allow for STRs in any residential zone statewide.
Do you have a short-term rental property in Michigan? Here’s what you need to know.
Banning short-term rental bans
The bills in question are Michigan Senate Bill 446 and House Bill 4722, both of which move to amend the Michigan Zoning and Enabling Act to include short-term rental verbiage.
Specifically, these bills aim to:
- Permit short-term rentals in all residential zones.
- Prohibit imposing special use or conditional use permits or procedures on short-term rentals that are different from other residential dwellings in the area.
- Declare that short-term rentals do not qualify as commercial property use.
The bills don’t prohibit municipalities from regulating rentals (short-term or otherwise) to prevent noise, traffic, and other nuisances, or limiting occupancy on these properties. They can also require inspections, inspection fees, and taxes.
In both cases, the bills define a "short-term rental" as a one- to four-unit property that can be rented for 30 days or less.
As you might imagine, not everyone is pleased with the proposals. The Michigan Municipal League, for example, is speaking out against the bills. They’re also encouraging others in the area to contact their senators and oppose the legislation. The group recently posted on its website:
We need members to contact the bill sponsors and committee members to voice opposition to this all-out attack on local decision-making. … Local government is best-positioned to know the unique needs of their community when discussing zoning issues. The elected decision-makers closest to the people are the most appropriate to determine if something needs to be acted upon to maintain the delicate balance between residential and commercial uses, between residents and investment property owners, and to protect the health, safety, and welfare of residents, renters, and vacation visitors.
Others to oppose the bills include city managers in Holland and Boyne City and the mayor of Warren, James Fouts. The Michigan Association of Realtors, however, supports the legislation.
“There is a growing trend in local government to enact zoning bans that preemptively tell property owners they are unable to rent,” the association’s advocacy arm wrote. “The rental of residential property is important to Michigan second-home markets and in urban areas around event destinations. Banning the right to rent harms property owners and local businesses in many communities all over Michigan.”
The bottom line
The bills are still in the early stages in both houses, so there’s nothing set in stone just yet -- and clearly, there’s a bit of opposition to deal with before this legislation becomes a law. If passed, though, these bills could signal a nationwide trend to treat short-term rentals as traditional residential properties, which could equal more investment opportunities across the country. We’ll keep you updated as these and other similar bills progress.