Short-Term Rentals are All the Rage – Until They Are Restricted or Prohibited

Not everyone is thrilled by the recent increase in short term vacation rentals in Michigan.  Here’s an update on efforts to limit or ban such rentals in select areas. 

Short-term vacation rentals are on the rise, particularly in Michigan, which features spectacular coastland on the Great Lakes, equally stunning sites on inland lakes, and properties abutting beautiful hills and forests.  Great little nearby towns abound and enhance the allure.  Popular websites such as VRBO and Airbnb have added to the volume of short-term rentals in Michigan every year.

This phenomenon is not limited to Northern Michigan.  There are many properties in southeastern Michigan which are also frequently rented on a short-term basis (see the item on Detroit, below).

Not everyone is pleased with this development.  Some communities fear the negative impact that may result from overcrowding, noise, and even crime that will follow these so-called transients now sharing their cherished vacation sites.  Many communities have enacted ordinances to regulate or prohibit short-term rentals, frequently labelling it commercial activity which is banned by many deed restrictions.

Michigan case law tends to support these restrictions.  As for the restrictive ordinances, even the City of Detroit has joined the trend, although reports indicate the City has not yet actively enforced its enacted ordinance.

The Michigan legislature stepped into the fray earlier this year with H.B. 4046, a Bill which proposes to amend the Michigan Zoning Enabling Act declaring that short-term rentals are a residential use of property, thereby negating any deed restriction or local ordinance to the contrary. As of this writing, that proposed Bill has been languishing and has seen scant activity since its introduction.

This political battle is ongoing.  If you are interested in the outcome, you should speak to your State representative.  We will also watch for further developments.

Caution: This article provides general information and is not intended to be legal advice. You should contact LAMBERT LAW, 407 6th St., Ste A, Rochester, MI 48307 (248) 642-7774 if you are seeking specific legal advice regarding the topics discussed above.