Short Term Rental Legislation Quickly Reintroduced in New Term

Posted on January 25, 2019 by Dene Westbrook

Last week House Bill 4046 was introduced to amend the Michigan Zoning Enabling Act. This legislation is the same bill introduced last term (HB 4503). If passed, it would:

  • Eliminate a local unit of government’s ability to regulate short-term rentals (defined in the bill as a rental of 28 days or less).
  • Mandate all short-term rentals are a residential use of property, permitted in all residential zones.
  • Eliminate the ability for additional regulations (i.e. special use or conditional use permits, rental registration, inspections, etc.) for short-term rentals unless all dwellings (i.e. owner occupied) in the zone are also subject to the requirements.

This legislation puts in place a preemption upsetting the balance between a healthy local economy, property rights and an established, transparent process for zoning. The Michigan Zoning Enabling Act lays out the process for local government to draft regulations driven by public input through an open process. House Bill 4046 undermines local decision-making and removes the voice of local stakeholders rendering local government powerless to act. It would eliminate the ability for local governments to regulate short-term rentals in residential neighborhoods negatively impacting property values and quality of life.

The League believes local governments are best positioned to know the unique needs of a community when discussing the short-term rental issue. Those closest to the people are the most appropriate to determine if something needs to be acted upon to maintain the delicate balance between residential and commercial uses, and between residents and investment property owners.

The legislation would create a loophole allowing any landlord to simply adjust the terms of a lease agreement to be 28-days or less to qualify as a short-term rental and not adhere to a municipality’s existing non-owner occupied requirements. Non-owner occupied regulations exist to protect the health, safety and welfare of tenants in those rental dwellings.

Even if short-term vacation rentals are not an issue in your community, you should be very concerned about the impact of preempting local zoning efforts. If enacted, this legislation would set a dangerous precedent undermining decision-making at the local level! It will also set the stage for further attacks on local zoning (occupancy limits, further use exemptions, etc.).

The bill has been referred to the House Local Government and Municipal Finance committee. The League will continue to oppose this legislation as introduced, but recognizes it is an issue that will need resolve. We are committed to being at the table and preserving local zoning.

Jennifer Rigterink is a legislative associate for the League handling economic development, land use and municipal services issues.  She can be reached at [email protected] or 517-908-0305.

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