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July 12 2017

Proposed Bill Would Eliminate Local Government's Ability to Regulate Short-Term Rentals

By: Bradley A. Fowler

Previous editions of this Newsletter have discussed the proliferation of short-term rentals through social media companies like Airbnb, and the myriad of challenges the home-sharing phenomenon is causing for communities across Michigan.  Many municipalities have taken steps to limit short-term rental activity through zoning regulations and general police power short-term rental ordinances.  A recent Bill introduced in the Michigan House, however, seeks to strip local governments from being able to limit short-term rentals in their communities.

House Bill 4503 was introduced to the Committee on Tourism and Outdoor Recreation on April 25, 2017.  The Bill, if enacted as drafted, would amend Michigan’s Zoning Enabling Act by decreeing that all short-term rentals are a residential (as opposed to commercial) use of property and are a permitted use in all residential zones.

The Bill defines “short-term rental” to mean, “the rental of any single family residence or 1-4 family house or dwelling unit, or any unit or group of units in a condominium, for terms of less than 28 days at a time.”  Thus, if the Bill is passed, there would be no zoning restrictions on a home in a residential-zoned area being used as a short-term rental.  Theoretically, under the Bill, an owner of a house in a single-family residential neighborhood anywhere in the State, could rent the home out on a nightly basis 365 times a year.  The Bill does allow zoning regulations for noise, advertising, traffic, or other conditions, but the restrictions cannot prohibit the rentals.  

While this Bill has not yet been signed into law, if enacted it will effectively usurp the authority municipalities currently enjoy to limit short-term rental activity in residential zones and would render any current regulations limiting short-term rentals unenforceable.  

Mika Meyers will continue to monitor this Bill and provide updates as it moves through the Legislature.  If you have any questions regarding short-term rental regulations in your municipality, please contact your Mika Meyers’ attorney.