Municipalities could lose a significant amount of their authority to regulate short-term rental properties under legislation that was approved Tuesday by a state House committee.
Housing advocates and local government leaders are pushing back on the legislation and its blanket approach to short-term rentals, which are facilitated through platforms like Airbnb. Bill critics generally acknowledged the value that short-term rentals provide to communities and local tourism, but they say it could have a negative effect on the already uphill battle to add affordable housing units across the state.
A last-minute substitute to House Bill 4722 — sponsored by state Rep. Sarah Lightner, R-Springport — was given to stakeholders minutes before Tuesday’s House Commerce and Tourism Committee meeting. The committee quickly advanced the bill without providing time to review the new version, critics said.
Bill supporters include Michigan Realtors, which argues that municipalities should not have a say in a property owner’s choice to periodically rent their residential property on a short-term basis.
“The rental of residential property is important to Michigan’s second home market and in urban areas around event destinations that see guests supporting local businesses,” reads part of a statement on the trade group’s website. “The ability to rent is a fundamental component of ownership.”
Short-term rentals are an important part of the tourism economy, but communities have varying needs, according to the Michigan Municipal League, which opposes the bill.
“We are extremely disappointed that a substitute bill given to us minutes before committee began was passed without allowing stakeholders time to review it and provide input,” Michigan Municipal League CEO and Executive Director Dan Gilmartin said in a statement. “The changes made to the bill do nothing to address the very serious concerns local leaders across the state have made clear: a top-down, one-size-fits-all policy for short-term rentals ignores the unique needs of our individual communities and is wrong for Michigan.”
Many local communities have adopted their own local zoning regulations around short-term rentals that might not be enforceable if the legislation passes. Boyne City is in the process of developing its own regulations for the more than 200 short-term rentals operating in its city limits.
“As a lakefront community, our economy thrives on visitors. Many of them prefer short-term rentals when staying here and we welcome and support that. At the same time, we need the ability to balance the needs of vacationers with those who live and work here year-round,” Boyne City Manager Michael Cain said in a statement. “Our concern is that when these ‘mini-hotels’ are allowed to operate uncapped and unregulated, the permanent housing stock of a community can become hollowed out and diminished, which drives up housing costs for everyone.”
The demand for affordable housing in Michigan far outweighs the supply, especially in tourist areas, said Yarrow Brown, executive director of Traverse City-based Housing North. Grand Traverse County needs 5,715 new affordable housing units alone to meet its housing demand, but the growing number of homes converted to short-term rental housing makes the market smaller for long-term renters, Brown said.
“The growth in short-term rentals has certainly added to the tourism economy but communities need to have solutions available to them to help ensure there is enough housing for those who wish to live and work here full-time,” Yarrow said in a statement.
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