Short-Term Rental (STR) Regulation Act Introduced

Posted on February 28, 2024 by Jennifer Rigterink

It has been almost seven years of playing defense on the short-term rental issue. The first bill was introduced in April 2017. It was a preemption amendment to the Michigan Zoning Enabling Act. Legislators were told by proponents it was needed because municipalities across the state were banning STRs.

We’ve had over six years of pushing back on attempts to remove local decision-making on the regulation of short-term vacation rentals in our communities. With every attempt to preempt local control, we’ve provided workable alternatives to no avail.

It has been over a year since we’ve seen any active STR legislation. Well, that hiatus is over with the introduction of House Bill 5438. This is a bill to provide for the registry and regulation of short-term rentals and hosting platforms. Key differences from what we’ve faced in the past:

  1. This is not a preemption amendment to the Michigan Zoning Enabling Act!
  2. Local units of government maintain authority to regulate short-term rentals.
  3. A statewide excise tax (6% of the STR occupancy rate) is created, and the proceeds will be distributed to the local unit of government in which the STR is located.

HB 5438 provides many of the things we’ve pushed for in previous bills on this topic. It protects neighborhoods from an oversaturation of STRs. It allows communities to balance their housing needs for residents and businesses as well as visitors, and it provides some revenue to deal with the costs associated with being a destination place with an influx of visitors throughout the year.

The bill has been referred to the House Committee on Local Government and Municipal Finance. We anticipate a hearing on the bill in the next few weeks. We will continue to provide updates on Live with the League, at CapCon, and additional blogs as things progress.


Jennifer Rigterink is the League’s assistant director of state and federal affairs handling economic development, land use, and municipal services issues. She can be reached at [email protected]

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