News Story

Property Owner: Mackinaw City’s Ban On Airbnb Rentals Violates Our Rights

Officials suddenly imposed ban in some residential areas but not others

Every summer, the population of Mackinaw City is estimated to jump more than 10 times from its offseason level to around 10,000. The lakeside village is just a short ferry ride from Michigan’s most popular tourist destination, Mackinac Island.

Many people come for a leisurely holiday and others for a weekend getaway, and they often stay in a rental cottage or a vacation home. And until late last year, visitors could find and arrange a stay using websites like Airbnb. According to statistics a local property owner drew from the home rental website, renters spent 136 nights last year in Mackinaw City after using a home-sharing website.

But in late September of last year, the Mackinaw City Village Council banned rentals of less than 30 days in part of the residential section of the village.

The same ordinance also requires owners whose property is not in the affected area to annually register any dwelling used for rentals.

Officials in Mackinaw City are not the only ones in Michigan looking to restrict short-term rentals. Officials in Holland, Suttons Bay, Spring Lake Township and St. Clair Shores have all either banned or restricted them in their jurisdictions.

Property owners who say that their property rights are being violated have gained the attention of legislators. Two bills introduced in the state Legislature (sponsored by Republicans Sen. Joe Hune and Rep. Jason Sheppard) would pre-empt local governments from banning short-term rentals. The legislation would accomplish this by designating the short-term rental of a dwelling as a residential rather than a commercial activity.

Donald Fullenwider owns vacation property in Mackinaw City and is one of those owners who objects to the new ban. Under the new ordinance, Fullenwider can no longer rent out his house in the resort community for short periods.

“It’s clearly a property rights issue,” he said.

A Michigan native who later moved out of state, Fullenwider purchased land in Mackinaw City in 2012, when he was looking for a place to build a cabin near the site of the vacation home his family owned when he was a child.

He said he didn’t purchase the property to rent it, but quickly figured that doing so would be a good idea because he only visited the property a few weeks a year. Over five years, Fullenwider said he rented out his property to 50 to 75 couples. He also invested what he considers to be quite a lot of money renovating the property.

“I’m just baffled by their willingness to use government to limit people’s opportunities,” he said.

Fullenwider reports that in fall 2016, he, as well as some other owners of short-term rental properties, received a letter from the village saying he was either violating or potentially violating the local zoning code. He had been renting out his property through for four years by then.

Around that time, the village had a lawyer craft a new ordinance specifically banning short-term rentals.

Fullenwider said that he could never get a detailed answer from village council members when he questioned their claims that the practice had detrimental effects on village neighborhoods.

Michigan Capitol Confidential made several phone calls and sent several emails to the Mackinaw City zoning administrator, but received no response.

The ordinance now bans rentals for a period of less than 30 days, and Fullenwider has never rented out his property for more than 10 consecutive day.

“Mackinaw City is the most-often referenced vacation area for visitors in the summer time to Michigan,” Fullenwider said. “If Mackinaw City really bans short-term rentals, it’s really a sad opportunity missed.”

Sheppard, a Lambertville Republican, has sponsored a bill in the state House that would pre-empt local officials from banning short-term rentals. He is a commercial real estate agent and says the Airbnb-type rentals are no different from longer-term rentals, which are currently considered to be a “residential” activity. Sheppard worked as a realtor before being elected to the House in 2014.

“There were some communities that decided that they didn’t want this practice,” Sheppard said, “I feel like that’s a huge infringement on personal property rights.”

Sheppard also said that while his legislation faces obstacles this year, he believes that prohibiting a ban on short-term rentals by local governments is a bipartisan issue.

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.