Since 2017, Michigan legislators have been debating whether or not to prohibit local governments from imposing more controls on short-term rentals. The push for restricting local control gained new momentum in the past year following the passage of bills banning short-term rentals in residential neighborhoods, such as the banning of Airbnb houses in Ann Arbor. House Bill 4722, introduced by state Rep. Sarah Lightner, R-Springport, would limit the local governments’ ability to enact zoning restrictions on short-term rentals. The bill, which passed in the house last year in a late-night session, was advanced by a Senate panel this September and referred to the Committee of the Whole.
State Sen. Jeff Irwin, D-Ann Arbor, said in an interview with The Michigan Daily that he opposed the intention of the bill.
“I think the communities should have some limited authority to make rules about these things,” Irwin said. “(They should have) limited authority to make sure that (short-term rentals) don’t present a persistent problem to their neighbors, that they are positioned in a way where it’s more fair to the hotels.”
For Ann Arbor, a college town and popular tourist destination, short-term rentals have long symbolized its tourism paradox. The thriving tourism industry, buoyed by weekend football games, has benefited property owners who convert their properties into short-term rentals to host visitors. However, city officials have said short-term rentals contribute to the city’s affordability challenges by taking housing stock away from prospective buyers and long-term renters.
In 2020, City Council passed an ordinance banning dedicated short-term rentals in residential neighborhoods. In 2021, amid possible legal challenges from affected short-term rental owners, City Council updated the previous ordinance to allow existing dedicated short-term rentals to continue operating. However, the continued to prohibit the creation of new dedicated short-term rentals in residential neighborhoods. The city also introduced a new licensing system requiring annual renewal by all short-term rental owners.
The House bill bans local governments from restricting short-term rentals to lower than 30% of total residential units. In 2020, 1400 out of 47,214 housing units in Ann Arbor were short-term rentals. While Michigan Realtors, a statewide organization, has advocated for the bill, in interviews with The Daily, the Ann Arbor Board of Realtors said they didn’t take a stance on this legislative initiative.
Prentice 4M is a local real estate company that operates dozens of short-term rental units. Founder Heidi Poscher said the current city regulations reflect a reasonable compromise.
“(The cost of operating short-term rentals) is more expensive (than in the past) because there are licensing fees to pay,” Poscher said. “But I understand that because the licensing fees are necessary to police the program … there hasn’t been any real change. We have continued to adhere to the regulations and try to be good neighbors to the people that surround us.”
Jennifer Rigterink, assistant director of state and federal affairs at Ann Arbor-based policy advocacy group Michigan Municipal League (MML), said the bill has gone further than in the past.
Ann Arbor Mayor Christopher Taylor told The Daily in an interview that the city would leverage communication channels with state officials to prevent the bill from passing.
“Certainly we are communicating to our delegation,” Taylor said. “Also, in the event that (the bill) passes in the Senate and gets onto Governor Whitmer’s desk, we would encourage her to veto it.”
Rigterink also said MML encourages representatives from college towns to look into adding exemption language to the bill grandfathering in their policies. The bill allows cities that have restrictions before 2019 that don’t explicitly discriminate against short-term rentals to continue to enforce them. Ritgerink said East Lansing might have already been exempted since the city has restrictions on rentals in general before 2019.
“The bill doesn’t name a specific municipality, ” Rigterink said. “But the only one that we have found that fits that kind of language is the city of East Lansing … In other communities that host universities or are college towns, I would be asking my legislator, ‘Why is that community carved out and not going to have to deal with this, but we’re preempted in our regulations?’”
Daily Staff Reporter Chen Lyu can be reached at firstname.lastname@example.org.