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New Bills Seek to Limit Local Governments’ Regulation of Short-Term Rentals

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Scott A. Dienes
Foster Swift Municipal Law News
July 27, 2017

With the proliferation of online home rental resources like Airbnb and HomeAway, the business of renting homes on a short-term basis has grown significantly in Michigan and other states across the country. Short-term rentals have raised concerns in many communities, and have led to new ordinances limiting or outright banning this practice.

The Michigan legislature recently waded into the issue with the introduction of Senate Bill 329 and House Bill 4503, which would have the effect of limiting the ability of municipalities to pass and enforce short-term rental restrictions.

The new legislation would require that short-term rentals be permitted "in all residential zones, not subject to a special use or conditional-use permit or procedure different from those required for other dwellings in the same zone."

Michigan is not alone in attempting to place restrictions on local control over this issue. According to the Short Term Rental Advocacy Center, a group formed by Airbnb, HomeAway, TripAdvisor, and FlipKey in 2013, Florida enacted a law in 2011 that prohibits local governments from passing laws banning short-term rentals. Arizona and New York also passed laws with similar limitations.

Other state legislatures are considering legislation as well. New Jersey, Tennessee, North Carolina, Virginia, and Massachusetts each are taking steps to prohibit, or limit to some extent, local regulation of short-term rentals.

Advocates for this type of legislation in Michigan and elsewhere argue that it is necessary to level the playing field and create consistency, rather than having disparate laws and regulations concerning short-term rentals throughout a state. Opponents argue that the laws strip communities of local control and of the ability to craft laws and regulations that are relevant to a particular community’s unique circumstances.

The Michigan Municipal League and the Michigan Association of Planning are also opposed to the new bills.

We will continue to monitor and keep you up to date on developments regarding Michigan Senate Bill 329 and House Bill 4503. Each bill has been referred to committee. What is clear at this point is that Michigan has joined a growing number of states, spurred by aggressive advocacy from the short-term home rental industry, that are placing limitations on local governments’ abilities to restrict short-term rental activity.

If you have any questions, please contact Scott Dienes at sdienes@fosterswift.com or 269.408.9004.