COUNTY NEWS: SHORT TERM RENTALS

By DEBRA HAIGHT

BCR Correspondent

NILES – In county board news, Berrien County Commissioners received a legislative update on what’s going on in Lansing at their meeting last week. Consultant Mike Krombeen reported that action could come this year regulating short term rentals in Michigan communities.

The short term rental issue has been a controversial one in recent years with most efforts to find a legislative solution falling short. Both the county and local municipalities have taken exception to past efforts that, in their opinion, removed local control.

Krombeen said new short term rental legislation is coming up later this month with hearings scheduled next week on a proposal from State Rep. Joey Andrews and others. Andrews represents the newly created shoreline district that runs from New Buffalo to Saugatuck.

Krombeen said this proposal is much different than one floated last year that was supported by realtor groups and would have eroded local zoning controls. He said the new proposal doesn’t allow local governments to ban short term rentals but does protects local zoning in regulating where short term rental properties can be.

The proposal will also create a statewide database where hosts who use platforms such as AirBnB will be licensed by the state and in turn provide data to the state, he said. In addition, local municipalities can impose an additional six percent tax on short term rentals with those funds either staying with the local government or being shared with tourist-related organizations.

Krombeen’s comments about short term rental legislation echoed what Andrews told County Commissioners earlier this year. He said he and other legislators have been working on the proposal since last April, meeting with local officials as well as organizations such as the Michigan Municipal League and the Michigan Association of Counties.

“The focus will be on local control,” he said. “We’ve used what other have states have done as our model. We want to create a state registry that local municipalities can check. The local governments can then enforce their own zoning and noise ordinances and revoke licenses as needed.”

“We’ve heard a lot of specific concerns from local governments,” he added. “They believe they have the power to enforce local ordinances but property owners don’t think so and lawsuits ensue. We’re trying to make it explicit and clear that this is a power that local authorities have.”

The legislation would also extend the current hotel tax to short term rentals and allow local municipalities have access to the proceeds from state excise tax levied on short term rentals to pay for enforcement costs. The tax would be on short term rentals of less than 30 days at a time and would start after 14 days of being rented out each year.

Andrews said having the tax start after 14 days of being rented out each year mirrors Internal Revenue Service rules. It also eliminates regulating instances where a property owner might let relatives and friends stay for short periods of time.

He noted that small towns, villages and townships have had to deal with a lot of changes over the years as neighborhoods with single family homes have been slowly transformed.

“A lot of these short term rentals are in former single family homes,” he said. “When they were built, people weren’t contemplating having a lot of cars parked on the street, a party every other weekend and the impact on the roads as well as the public safety calls,” he said.

Andrews said the goal is to create a new public act that regulates short term rentals and also takes case law into consideration. Michigan Supreme Court rulings in recent years have upheld the rights of local governments to govern short term rentals.

Krombeen also gave updates on a number of other items such as state finances, the recent awarding of low interest loans to restart the Palisades nuclear plant in Van Buren County, and the expansion of the state’s Medicaid waiver. The last item would allow jail inmates to enroll in Medicaid before their release and could save the county money.

Local governments will soon have more power to lower speed limits in their municipalities after a new law was passed by the legislature and signed by the governor. Local governments would still be required to conduct speed studies and give justification for lowering speed limits.