Frank Witsil Detroit Free Press
Published 8:00 AM EDT May 29, 2019
New Buffalo, the first stop for many visitors to Michigan entering from Indiana on eastbound I-94, calls itself the “Gateway of Michigan” and has long been a summer getaway for Midwest vacationers.
But last month, after much discussion, the city joined other municipalities that have added rules for residents using online rental services like Airbnb and HomeAway to rent out their homes.
“We had a number of residents complain about some short-term rentals in town,” David Richards, New Buffalo’s city manager, said last week as he headed to his own Memorial Day vacation in Las Vegas. “They were having late-night parties, pool parties, and kind of like ‘Animal House’ situations going on.”
The new regulations, Richards said, “allow us to control them, to some extent.”
Not everyone in New Buffalo is happy about this.
Around the world, tensions have been developing in tourist communities between folks choosing to rent their homes to earn extra money and local officials who want to regulate how they do it.
From New York to San Francisco, cities in America are wrestling with regulations. Even in Vegas — where some people go to indulge vices — there are now rules. European cities like Paris, Amsterdam and Barcelona, Spain, are trying to figure it out. In Asia, Japanese cities have cracked down on rentals.
Detroit bans Airbnb rentals in some residential areas, angering hosts
Prime & Proper proprietor turning Will Leather Goods into pizza restaurant, market
Various issues surround the disputes. Some are connected to public safety and how rentals change the community. Others are tied to housing prices, how to tax the business and whether the marketplace should regulate itself.
In some cases, quarreling renters and municipalities have ended up in court.
A Michigan Court of Appeals ruling published last week upheld a limit on short-term rentals by Spring Lake Township, another Lake Michigan community about 100 miles north of New Buffalo.
The standoff has even spawned private companies like San Francisco-based Host Compliance — casually referred to as Airbnb police — that market themselves to local governments for short-term rental ordinance monitoring and enforcement.
Some communities are cracking down on rental scofflaws with huge fines.
And to keep Michigan cities from banning short-term rentals entirely through zoning ordinances, State Rep. Jason Sheppard, R-Temperance, has introduced House Bill 4046, which would amend the Michigan Zoning Enabling Act.
Sheppard said the proposal doesn’t allow municipalities to zone the use out, but it does allows local governments to create ordinances to regulate rentals in their own communities.
The bill, introduced in January, is pending in House committee.
How much is too much?
Anchored by one of the area’s biggest beaches on Lake Michigan, sleepy New Buffalo used to wake up in the spring and remain active throughout the summer as a vacation destination, some lifelong residents said.
But now, they said, the city seems to be vibrant most of the year with a casino resort, two waterfront hotels, restaurants and access to wineries, breweries and several antique shops.
Visitors come to stay from all over the Midwest, including folks from the Traverse City area and the east side of Michigan, and many Chicagoans, who live about 90 minutes away and have second homes there.
New Buffalo’s new rental ordinance, which was passed by the City Council last month, is less restrictive than what some other municipalities have put in place in the past few years.
But Jason Milovich, who, with his wife, owns Bluefish Vacation Rentals in nearby Union Pier, said he and other renters are concerned that the regulations were too much, too soon and could affect their livelihood.
“The good part — because I do try to find the silver lining in things — is it’s not prohibitive as far as how many homes can rent and how long you can rent for,” he said. “They did change the maximum number of occupants — which is 14, even if you have a house that comfortably sleeps 20 — and some parking things.”
The ordinance also requires rental units to be registered, permitted and inspected.
Milovich worries those requirements could get expensive.
Driving up housing prices
Unlike Spring Lake Township, which, for the most part, banned these rentals in certain areas in 2016, New Buffalo officials seemed intent on keeping short-term rentals.
They even wrote into the ordinance a recognition that “one of our largest industries is tourism,” and that the “vacation rental marketplace” is a “major part of the tourism industry.”
“This marketplace,” the ordinance said, “has grown exponentially with the increasing use of online booking websites, and it will most likely continue to grow as surrounding municipalities limit, restrict or eliminate the practice.”
But, New Buffalo also said it needed “to take action to ensure that the operation of short-term rentals is done in a safe and controllable manner for the well-being of all in the community.”
The regulation sought to put “safeguards in place to protect the consumer as well as the property owner, surrounding neighbors and emergency responders,” and to preserve “the character of residential zoning districts.”
In developing and passing the ordinance, Richards said, he did not perceive there was any “undue pushback,” arguing that “there’s hardly any regulation at all” in the new ordinance.
He said it mostly focuses on requiring fire extinguishers and adequate parking spaces, measures that he didn’t consider to be at all unreasonable. And, he said, in addition to bringing wild parties, short-term rentals tend to lead to gentrification.
“Slowly, but surely,” Richards said, “housing is becoming more and more unaffordable in small communities like New Buffalo that have attractions like Lake Michigan to offer for short-term renters.”
Fueling a sharing economy
In the past decade, digital technology, particularly mobile apps, has created what has been called the sharing economy, which by many estimates is now worth billions in global revenue and it is far from having reached its full potential.
Uber drivers, TaskRabit handymen and Airbnb renters are a part of it.
One study by the Pew Research Center calculated about a quarter of all Americans earned money — a primary income for some and a supplemental income for others — from the sharing economy.
In another study, Pew found more than one in 10 Americans have used home-sharing sites, and middle-age people, folks 35 to 44, were nearly twice as likely as those 18-24 to use them, 16% compared with 9%.
So it’s not just small cities on edge of Lake Michigan that are trying to find solutions.
Paris, the romantic travel destination with 40 million tourists a year, has been wrestling with regulating paid home stays for at least two years.
In February, the mayor of Paris took legal action against Airbnb, adding the city should say no to “those who make money preying, destroying residential housing and risking making Paris a museum city.”
In Detroit, city officials are trying to clarify the rules on short-term rentals.
Last year, the city banned them in some areas, a measure that some renters, at the time, said caught them off guard and criticized as obtuse. But, so far, the city said Friday, the regulations have not been enforced. Officials are working on new rules that could be enacted later this year.
New York regulates home rentals, which the city has suggested is making the housing crisis worse by cutting into places available to live and causing rents to rise. The city began cracking down on violators by raiding apartments.
More: Why Livonia wants to regulate short-term rentals like Airbnb
In San Francisco, home-stay sites are required to register their vacation rentals and certain properties — below-market units and public housing — are barred from becoming rentals.
And Miami Beach, Florida — which has banned short-term rentals of six months or less — fines are now $20,000 for the first violation, $40,000 for the second, and even that has not been able to deter some renters.
Local problems, local rules
Spring Lake Township manager Gordon Gallagher has said the township — after much discussion and debate at several community meetings — decided to limit short-term rentals in certain areas of the municipality.
At one meeting, the city packed the local middle school auditorium.
The township, which is near Grand Haven, is mostly an industrial community, but it also has several waterfront homes.
“The waterfront is attractive,” Gallagher said. “The challenge we heard from our residents is: Do you want to know the person who lives next door to you, or is it OK if that person transitions every week all summer long?”
Ultimately, he added, the community decided “we wanted to be the kind of community you know who your neighbors are.”
In certain areas, the township limited rentals to two times a year for a total of 14 days and even went to court to successfully defend against a resident’s lawsuit who argued that she should have been permitted to rent her home.
But, Gallagher said the sharing economy is forcing municipalities to confront new questions, not just about how to regulate rentals, but also popular car services, such as Uber and Lyft.
“How do you regulate that?” he asked. “Do you let it self-regulate?”
“This is all so new,” he added. “What we are seeing now, may look totally different 10 years from now. The key, from my standpoint, is I think that there isn’t a one-size fits all answer.”
Contact Frank Witsil: 313-222-5022 or [email protected] Shelby Tankersley of Hometown Life contributed to this report.
Beginner tips for Airbnb hosting
Here are some considerations to make before becoming a short-term renter, according to LearnAirbnb.com, an advice site.
Know your goals. Consider why you are renting and how much you expect to earn.
Be aware of local rules. Make sure you are aware regulations and are following them.
Be prepared for the commitment. Listing and running a business could take time.
Inform you landlord. If you rent, make sure your landlord knows what you are doing.
Keep good neighbor relations. It helps to have supportive neighbors and good tenets.
- Chicago poised to adopt regulation of Airbnb and similar home-rental listing sites
- Online Vacation Rental Marketplace Sends Claims Packing with Carefully Drafted Terms
- Michigan Officials Approve Gerrymandering Reform Measure For 2018 Ballot
- Michigan officials to appeal straight-party voting ban
- Michigan Official Faces Manslaughter Trial Over Flint Water
- Michigan scrambles to find home for parolee; US won’t deport
- Five Michigan officials charged with involuntary manslaughter in Flint water debacle
- Top Mexican Police Official Murdered at Home in Latest Drug-Related Killing
- Lutz Home Deemed Unsafe After Depression Forms, Family Evacuated
- Cities Battle Vacation Rentals Through Fines That Often Go Unpaid