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Compromise sought in short-term rental debate

BY Monday, June 14, 2021 01:23pm

State lawmakers have introduced a bill seeking compromise in the ongoing dispute between local governments and real estate advocates over short-term rental property regulations.

Introduced last week by state Rep. John Damoose, R-Harbor Springs, House Bill 4985 would clarify the Michigan Zoning Enabling Act to say that no local township or municipality can outright ban short-term rentals. The bill allows for some local short-term rental regulations through special use or conditional use permits. Additional compromise legislation is expected in the coming days or weeks.

Local government officials and advocates have been outspoken in recent weeks about bills that would allow short-term rentals as a permitted use in all residential zones. Critics say the two bills — Senate Bill 446, sponsored by Sen. Aric Nesbitt, R-Lawton; and House Bill 4722, sponsored by Sarah Lightner, R-Springport — would strip local control over rentals made popular by sites like Airbnb and Vrbo.

“Our preference is to find a compromise,” Jennifer Rigterink, legislative associate at the Michigan Municipal League, said during a press conference today. “We’re trying to deal with this issue, and have been fighting about it and trying to find a compromise for four years now. Nobody thinks we should be banning short-term rentals. We believe the Zoning Enabling Act already covers this, but let’s clarify it.”

Meanwhile, many local governments have carefully crafted their own short-term rental policies that balance the needs of long-term residents and operators of short-term rentals, said Michigan Municipal League CEO Dan Gilmartin.

Should SB 446 or HB 4722 pass, “All of this work and reasonable regulation would be tossed out and the floodgates to short-term rentals would open,” Gilmartin said. “It would be like adding lighter fluid to an already blazing hot housing market, making the demand for attainable housing even more dire in the state of Michigan.” 

The Senate Committee on Regulatory Reform passed SB 446 late last month. Bill supporters, including the Michigan Realtors trade group, have said the legislation is meant to ensure private property rights while also promoting housing investments, as MiBiz previously reported.

While short-term rentals provide another vacation option for visitors, local officials have reported some negative consequences, including a reduction in available housing, increased noise and nuisance complaints, and unequal competition with traditional hotels, Gilmartin said.

He added that only one township in Michigan has outright banned short-term rentals as most municipalities seek to tailor their own regulations.

Grand Rapids City Manager Mark Washington said he saw the negative consequences of short-term rentals while serving as assistant city manager in Austin, Texas. Short-term rentals operate as commercial enterprises that can take over the character of neighborhoods, Washington said. 

He also fears the legislation stripping away local control could allow short-term rentals to cut into supply that could have otherwise been used for much-needed long-term housing.

“Our greatest need in this community is not for short-term rentals,” Washington said. “Our greatest need is for housing. We need over 9,000 housing units over the next four years. We have plenty of hotels and places where people can experience short-term rentals if they don’t want to stay in hotels, but in order for us to experience a high quality of life in Grand Rapids, we need additional housing supply.”

Frankenmuth officials amended the city’s zoning ordinance to regulate short-term rentals, and gathered short-term rental owners, hotel operators and bed and breakfast owners for feedback throughout the process, said Frankenmuth City Manager Bridget Smith. 

“I think this is really how an ordinance is supposed to work,” Smith said. “What’s most disheartening is the short-term rental bills on the floor ignore all of this careful, collaborative work we’ve done.”

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