LANSING, Mich., Feb. 21, 2024 — A group of legislators led by state Rep. Joey Andrews (D-St. Joseph) recently introduced a comprehensive package of legislation aimed at addressing the short-term rental crisis.
“Local control was our guiding light,” Andrews said. “Through these bills, we aim to empower local communities to manage the impact of short-term rentals within their borders, ensuring a balance between economic benefits and neighborhood stability.”
Andrews introduced House Bills 5437-5446 alongside co-sponsors state Reps. Jason Morgan (D-Ann Arbor), Amos O’Neal (D-Saginaw), Jenn Hill (D-Marquette), Julie Brixie (D-Meridian Township), Erin Byrnes (D-Dearborn), Mike McFall (D-Hazel Park), Veronica Paiz (D-Harper Woods), Noah Arbit (D-West Bloomfield) and Kristian Grant (D-Grand Rapids). This effort is designed to tackle the pressing issue of short-term rentals destabilizing local communities.
“Lake communities like those I represent in greater West Bloomfield and Commerce are deeply impacted by the uncontrolled proliferation of short-term rental properties. Irresponsible usage by visitors harms our communities and exacerbates the housing crisis,” Arbit said. “I am proud to partner with Representative Andrews on these critical bills, which will empower municipal leaders to implement regulations that are right for their unique communities.”
The bills represent a comprehensive legislative initiative to confront the challenges posed by the short-term rental market. The legislation covers various aspects, including regulation, taxation and safety measures, aiming to establish a framework that protects both the interests of communities and the safety of short-term rental occupants.
“This legislation empowers localities to regulate short-term rentals in the best interest of their community. After years of hearing residents’ reservations about short-term rentals, I’m pleased to be a part of legislation that allows their city to meaningfully address interests for safe neighborhoods and affordable housing,” Paiz said.
In a groundbreaking move, the legislation proposes a statewide opt-in excise tax on short-term rentals, set at 6% of the occupancy charge. This tax is intended to alleviate the strain on local infrastructure and public services caused by STRs. Funds will be directed toward the Department of Licensing and Regulatory Affairs and the Department of Treasury for administering the act, with the remaining balance allocated to the local government where the STR is located for general funding purposes.
“This bill package will help municipalities increase their tax base and ensure short-term rentals are properly regulated like hotels,” McFall said. “This is a vital step to help ensure safety for short-term rental-goers as well as the neighborhoods they are located in. This will also allow communities to receive their fair share of taxes from these entities.”
The package also introduces a short-term rental registry and database, serving as a vital tool for compliance, fraud prevention and enhanced local enforcement. Furthermore, the legislation empowers localities to enact and enforce zoning regulations tailored to individual community needs. The legislation extends the bed tax to STRs, ensuring they contribute to local funding mechanisms supporting tourism and community development, with layered taxes preventing conflicts in communities with convention and visitors bureaus.
“This bill package will continue to put all people first by carving out new paths to address community needs. The lack of affordable housing and child care cannot be understated for my district and for the state. This bill will help create new opportunities to address this disparity,” O’Neal said.
“It’s long overdue that short-term rentals are treated as the lodging and businesses they are. This bill package protects local ordinances and allows local governments to control the impacts of short-term rentals in their local areas,” Byrnes said. “My bill, House Bill 5442, allows hotel tax dollars to be put toward affordable housing and childcare initiatives. Utilizing lodging taxes for child care and housing is a sustainable way to give back to local communities in sectors that often go underfunded.”