Greg Holcomb, MPA
Townships, cities and counties across Michigan are engaging in the nationwide debate over short-term rentals. These communities are finding difficulty in creating balanced, reasonable, and equitable regulation of the vacation rental industry.
The local debate, similar to other parts of the country, have led to regulatory schemes that are difficult to enforce and often place heavy burdens on private property owners and small businesses. In many cases, local officials have been unable to find a common ground between local residents, local businesses, and private property rights leading to bans on short-term rentals.
The debate over vacation rentals has also appeared in the Michigan court system. An Allegan County Court ruling in Bauckham, et al. v James and Linda Skarin, et al has caused further confusion regarding the status of vacation rentals throughout the state. The county judge ruled that the defendant violated the deed restrictions, prohibiting commercial activity, of a property used as a vacation rental. Communities across the state have utilized this judgement to limit the locations of vacation rentals.
The Michigan Legislature has taken notice and introduced SB 329 and HB 4503. These companion bills will prevent communities from outright banning vacation rentals. The bill further clarifies that a vacation rental is a residential use of property and not a commercial use. This bill does not take away localities rights to regulate vacation rentals for health and safety reasons.
The media continues to cloud the Michigan debate. The Traverse City Record-Eagle writes ‘Bill could open door for vacation housing’. The Michigan vacation rental industry is a long-standing industry. A 1990 report indicated that Michigan had the third highest number of vacation homes next to Florida and California. Additionally, recent reports indicate that Chicago millennials have led a strong growth in vacation home sales, as first time homebuyers, in southwestern Michigan.
Michigan’s established vacation rental market should be no surprise to local officials. The long established vacation rental market is in part to the rich culture, history and natural beauty of the state. Michigan has seen continued growth in visitors year after year, with the most recent statistics showing that the state hosted 113.4 million visitors. Vacation rentals are a primary accommodation and needed to keep up with the demand of visitors. The door has long been open to vacation housing in the state. The Michigan Legislature is not removing local control over short-term rentals, but reacting to protect private property rights in a regulatory climate that would rather ban an activity then create reasonable solutions.
To read this bill and follow it through the legislative process, you can use VRMA’s dynamic legislative tracker.
Michigan residents, property owners and property managers can also contact their legislators through email, Facebook and Twitter using the VRMA Advocacy Tool.
