Homeowner: Are All Uses Not ‘Permitted’ By Zoning Forbidden?

That’s what one Michigan city appears to claim

It is well-established under Michigan law that certain restrictions apply to the uses of residential property. One cannot, for instance, open a strip club in the basement of a home in a residential neighborhood. Or operate a liquor store out of one’s garage.

But are there also limits on the government’s authority to dictate to a property owner what constitutes a residential use of residential property?

That question lies at the heart of a criminal complaint brought against a St. Clair Shores homeowner for letting visitors stay overnight using the popular residential renting service Airbnb.

Michael Dorr owns a home on East 10 Mile Road on a canal adjoining Lake St. Clair. He has listed the home on Airbnb and has twice been cited by city officials for violating zoning restrictions the city claims prohibit such rentals.

Dorr is represented by Derk Wilcox, senior attorney at the Mackinac Center for Public Policy.

Wilcox and St. Clair Shores City Attorney Robert Ihrie had an interesting exchange on the question at a court hearing in December before 40th District Judge Joseph Oster. Here are a few highlights:

Wilcox: “Can a resident host a wedding reception for their son or daughter? If it’s not (permitted) under the ordinance I guess you can’t do that. What about a friend’s son or daughter? The use we’re talking about here, short-termed rentals, do not alter the residential character. It’s just a home where one family at a time lives and occasionally other people come by and stay overnight.”

Ihrie: “No zoning ordinance lists everything that isn’t permitted. We argue ... that permanency is one of the cornerstones of residential. It is a place where someone lives and has a permanent presence. Their belongings are there.” Airbnb visitors “don’t have any rights, any occupancy right, other than one week. They don’t have the right to ... leave belongings there. There is no permanence to the presence either psychologically or physically. To argue that people that come and stay for a couple of days or a week become residents ... of the city ... would make a three-day stay in the hospital residential.”

Wilcox: “To discuss whether the guests are [residents is] completely avoiding the question because nobody is arguing that they are. [Mr. Ihrie] is essentially saying that a homeowner in a residential district cannot have guests. As long as you don’t have excessive people coming and going, you don’t need extra parking. You don’t need signage. You live there; it’s your house. You do other things with it besides sleep and eat there. You have guests. I still don’t see anything in the residential ordinance ... that says you can’t have short-termed guests. So the question ... is simply, is this a residential usage that changes the characteristics so much that it’s no longer a residential usage? People should be free to use their homes as they want as long as they’re not harming anyone else.”

Oster disagreed, finding that Airbnb rentals in a residential neighborhood “changes substantially the characteristic of the neighborhood,” and imposed a $225 fine on Dorr for the misdemeanor conviction at his sentencing last month.

Wilcox said the ruling will be appealed. If St. Clair Shores wants to outright forbid the use of popular services like Airbnb and VRBO within residential districts, which would be a mistake, it needs to enact a specific prohibition, he said.

Some jurisdictions, like Mackinaw City, have done so. Others, like Traverse City, one of the state’s most popular short-term rental destinations, have wrestled with the issue over several years without reaching a final resolution.

But it appears questions about what are and are not residential uses of residential property — and who gets to decide — will continue for some time.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.