The proposal is “still alive” after two legislative hearings, but needs additional negotiations to get enough votes in the state House, said organizer Rep. Joey Andrews, D-St. said. Joseph.
Related:
“Obviously there are some groups that would never support something like this, but I think there are some groups that we are close to negotiating with,” he said.
Efforts to restrict rental apps have been going on in Lansing for nearly a decade, and Michigan lawmakers and local governments are debating how best to address the issue.
Proposals to allow communities to completely ban short-term rentals have always floundered in Lansing, although some communities have established their own regulations or other regulatory caps.
Supporters of regulating short-term rentals say it’s unfair to leave municipalities with infrastructure that tourists benefit from but don’t pay for because of rentals. There’s also the argument that rental properties are taking housing stock away from people who want to put down roots in their communities.
Opponents say the regulations infringe on owners’ rights to rent their properties as they wish.
“Any state solution needs to specifically protect the right to rent and define its use,” said Brad Ward, vice president of public policy and legal affairs for the Michigan Association of Realtors.
latest law
The state’s latest attempt to tackle short-term rentals comes in the form of a 10-bill house package that imposes a 6% excise tax on properties rented for at least 15 days a year.
If enacted, the tax could generate between $35 million and $75 million in revenue for Michigan, according to a study by the state’s nonpartisan House Fiscal Office. Most of that money goes back to the municipalities where the short-term rentals take place.
The law also requires all short-term rental owners to carry $1 million in liability insurance and requires platforms like Airbnb to pay an annual registration fee of $100 per property (with a cap of $50,000). and require safety measures such as fire extinguishers to be provided on all floors of the property. Or install a carbon monoxide detector.
The proposed bill would allow cities to determine the number of short-term rental facilities that can exist within their jurisdictions, but the Michigan Department of Licensing and Regulation would require a statewide database of where these short-term rental facilities are located. It is mandatory to create one.
This database includes the owner’s identity, the address of the short-term rental, emergency contact information for anyone who lives within 30 minutes of the rental, and whether the owner has liability insurance and meets all local requirements. Contains a certificate indicating that. .
House Fiscal Agency analysts say the state doesn’t currently know how many of these rental apps are operating in Michigan, so “it’s unclear how much revenue these registration fees will generate.” It is said that
But there are also signs that the size of short-term rentals in Michigan continues to grow, according to data from AirDNA, a national short-term rental tracking service.
There are approximately 1,200 active short-term rental listings in Detroit, a 7% increase from last year. Traverse City has approximately 1,028 active short-term rental units, a 33% increase from 2023.
Democratic state Rep. Jen Hill, D-Marquette, said the proliferation of short-term rentals in her district is “swamping” local communities and preventing businesses from hiring due to a lack of available housing for workers. Ta.
“Local governments are completely starved for revenue,” Hill said. “It’s ridiculous that everyone in my community has to ask for a grant for a fire truck. That’s what taxes are for.”
patchwork approach
Regulation of short-term rentals has received increasing attention nationwide in recent years, but approaches have largely been taken on a city-by-city basis.
Although California has no actual state-level laws, the City of San Diego has extensive requirements regarding short-term rentals, divided into four different categories depending on the location of the unit and rental frequency. In the Mission Beach neighborhood, one of San Diego’s biggest tourist destinations, the maximum number of rental units is 30% of the total number of units.
In Florida, the state Legislature recently passed short-term rental regulations that allow local governments to register short-term rentals in their jurisdictions and establish fines and fees for failure to register.
Michigan is similarly participating in local rental regulation efforts.
Cities, including Ann Arbor, allow short-term rentals under certain circumstances, but not if they are managed by a third-party company. In the Netherlands, short-term rentals are capped at 25 units, but in neighboring Grand Rapids, 200 one-room rental licenses are issued annually.
Then there’s New Buffalo, a community on the south shore of Lake Michigan. Owners there lost a lawsuit last year over a moratorium on short-term rentals in the area.
Although short-term rentals still exist within the city limits, and its bylaws acknowledge that “a major part of the tourism industry is the short-term rental or vacation rental market,” new short-term rentals in residential areas are Business is no longer permitted.
Mark Florian, a Lincoln Charter Township trustee and member of its Planning Commission, said his Lake Michigan community has already adopted ordinances restricting occupancy, noise from units, parking and more. He said that
But he opposes the state’s latest attempt to regulate rental properties because he feels the House policy imposes an unfair tax burden on owners like himself.
In the community of Florian, taxes on hotels and motels are administered by the Southwest Michigan Tourism Association, and the revenue is used to promote tourism. He was concerned that an “as yet undefined portion” of state-collected excise taxes would be returned to local communities “for which, incidentally, the purpose for which they are to be used is also undefined.”
Tax and database proposals under consideration
Andrews, whose congressional district stretches along the shores of Lake Michigan, said discussions on tax allocation are ongoing. He added that the type of information that would be collected in the proposed state short-term rental database is also being considered.
But he is confident that some agreement can be reached. Even if it doesn’t involve all stakeholders.
“If we don’t have roads, water and security, tourists won’t come,” Andrews said. “So it’s really in everyone’s best interest to come together and find a solution.”
Saugatuck Mayor Pro Tem Helen Baldwin was one of the few mayors to voice support for House Democrats’ bill package in April.
