FILE - airbnb, rental property

Michigan policymakers are working to strike a balance between local government authority and property rights when regulating short-term rentals like Airbnb.

A group of local government advocates, hotel representatives and real estate agents disagree about certain details, but all believe that local governments should not be allowed to ban short-term rentals outright.

Jennifer Rigterink, a legislative associate for the Michigan Municipal League, which represents the interests of cities, told The Center Square that the groups found ground on which to compromise.

Several cities outright ban home-sharing through local ordinances, she said.

The hotel industry competes with home-sharing services such as Airbnb, a service that doesn’t pay similar fees as hotels, so hotel advocates argued for taxing Airbnbs' similarly.

The real estate industry representatives support allowing homeowners to rent out their properties and views local restrictions as choking Michigan’s home sales.

“All the properties have rights. Neighbors who live there as much as those investment owners who are basically running an unstaffed hotel out of it,” she said.

More than 7,000 Michigan residents listed their homes on Airbnb as of August 2018.

An estimated 640,000 guests booked stays through Airbnb in Michigan, with owners earning about $78 million, Allison Schraub, Airbnb’s deputy policy director, said in a House committee testimony this year.

Rep. Jason Sheppard, R-Temperance, sponsored legislation that would forbid outright zoning bans, defines a short-term rental as housing leased for fewer than 28 continued days, and classified it as a residential property use.

Sheppard’s bill would allow local governments to enforce ordinances and to set fees and taxes.

“Many local units of government have shut down this practice by zoning out the use of short-term rentals completely,” he testified. “We are looking to reverse those bans today with this bill, because I believe that’s a clear violation of a personal property right.”

Airbnb paid more than $4.2 million in state use taxes to the Michigan Department of Treasury from 2017-2018, according to Airbnb.

Bipartisan legislators led by Rep. Jim Lilly, Republican- Ottawa County’s Park Township, introduced a separate package of bills that would create a statewide short-term rental registry and require operators to pay state excise taxes that fund tourism promotion, similar to hotels, and allow exemptions for homes rented for 14 or fewer days per calendar year.

Lilly told The Center Square that he didn’t want to comment until they made final decisions.

Rigterink cited Grand Haven’s model in which short-term rental owners must register with the city, pay a $35 license fee, and pass a home inspection.

“We think the locals know best when deciding their laws,” she said.

The home inspection ensures consumer protection against homes that violate state law, such as offering a room with bunk beds in a closet, she said.

Staff Writer

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.