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Short-Term Rental Legislation

As the fall legislative session kicks into full gear, discussions are ramping up on the subject of short-term rentals. As readers may be aware, there are several bills in the legislative hopper dealing with the subject of whether or not a community can ban short-term rentals or make them nearly impossible to operate. A package of short-term rental bills died in the last session due to opposition.

There is tremendous push back again from more than one front on legislation that outright removes a local community’s ability to control short-term rental development in some way or another. First, the communities themselves say it is a local control issue and they should be able to decide on their own where and if short-term rentals are allowed and if they are, how they are operated, etc. Second, the hotel and bed and breakfast advocates are opposed to short-term rentals due to what they call unfair competition.

The legislation that has been introduced approaches the subject from different angles and addresses different constituencies’ concerns or wants. Here’s a short summary of the bills introduced to date:

House Bill 4046 – The bill would require zoning laws to allow short-term rentals in residential zones, disallow the requirement for special use or conditional permits different from other dwellings in the same zone and establish that short-term rentals are not a commercial enterprise that could be regulated as such. The bill also enables locals to consistently regulate short-term rentals in the same manor as owner-occupied rentals, including noise, advertising, traffic, etc. The bill only applies to one to four-unit residential buildings or group of units in a condominium.

House Bill 4554-4563 – These bills, tie-barred together, would require the registry of short-term rentals with the State and require that the owner carry a one-million dollar liability policy and that use taxes, local excise taxes or assessments by law are paid. The bills further enable localities to collect an excise tax, commonly called a hotel tax or convention tax from short-term rentals. The bills also prohibit localities from restricting short-term rentals through zoning.

So far, no compromise has been reached and discussions seem to have reached a stalemate. However, Clay Powell, Director of the RPOA of Michigan (RPOA-M), says the RPOA-M has decided to weigh in on the topic proactively and will attempt to move the needle in the negotiation process.

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