News Story

Residents Testify Local Airbnb Bans Take Away Freedom And Income

Bill to permit restrictions but not bans approved by a House committee

While public officials in Michigan have lifted many of the pandemic-related restrictions that have been in effect for months, one industry — tourism — is the subject of an ongoing debate on what local governments may do. Some municipalities, especially those in areas popular with tourists, have moved to ban short-term rental properties.

Bills in the state House and Senate would prevent local governments from banning services, such as Airbnb, which make it easy for owners to rent their house or cottage to visitors for a few days or weeks. If these bills are enacted, local governments could impose certain regulations on short-term rentals but not ban them.

The lakefront town of New Buffalo, in Michigan’s southwest corner has become a popular destination for Chicago-area residents who seek a getaway on Lake Michigan. Local regulators have, in recent years, clashed with homeowners who want to boost their income with vacation rentals. Julie Ritchie is one of those owners.

She told Michigan Capitol Confidential that short-term renting let her acquire a new residence without selling the home she and her children have long enjoyed and would like to keep. But now, she says, the city of New Buffalo has banned short-term rentals, claiming that some vacationers created noise problems.

Ritchie says she was blindsided by the city’s sudden ban. “Most important is that I need this income,” she said. “It is my retirement income. The city is taking it away from me.”

Linda Lawless, a 70-year-old resident of Silver Creek Township in Cass County, rents her place to supplement her Social Security payments, her only other source of income. She wrote in The Detroit News that Airbnb has allowed her to keep her cottage, which was built by her great-grandfather and has been in the family for nearly 100 years.

Lawless wants lawmakers to pass a bill to stop what she called unfair restrictions on her cottage. These include stringent capacity restrictions and a requirement that she carry $1 million worth of liability coverage. She says the requirements make renting not worth it.

But Jennifer Rigterink of the Michigan Municipal League opposes the bills: “You can support private property rights and still oppose this legislation. The bill as written only favors the rights of owners who want to use their property for short-term vacation rentals.”

Rigterink testified that her organization does not support bans on short-term rentals, but it does want the state to let local governments impose more regulations than the bills would allow.

The Michigan Municipal League has called the bills "potentially devastating." On its website, the MML wrote, "The bill goes on to say it 'does not prohibit regulation applied on a consistent basis to rental and owner-occupied residences' for inspections. Does your municipality inspect owner-occupied residences? If no, then you wouldn’t be able to inspect a short-term rental because that wouldn’t be a consistent application of your regulation for both rental and owner-occupied residences.'"

In South Haven, resident and homeowner Gerald Webb says the rentals have contributed to South Haven’s economy, a key factor, since the Lake Michigan town relies on tourism.

Walter Draeger is a retired Army major who would like to grow his own East Bay Township vacation rental business in Grand Traverse County, in the Traverse City area. He says a 2019 township ordinance imposes high costs and extreme regulations on property owners. In a letter to the House Committee on Commerce and Tourism, he wrote, “Good hosts don’t want to disrupt a neighborhood – they actually keep their properties in top shape and increase property values – bringing business to the communities.”

On May 26, the House Commerce and Tourism Committee advanced House Bill 4722 to the full House for consideration with a bipartisan 7-2 vote. On May 27, the Senate Regulatory Reform Committee advanced Senate Bill 446 to the full Senate for consideration with a 5-3 vote.

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.