Ordinance changes would allow Detroiters to offer some Airbnb listings

Candice Williams
The Detroit News

Detroit — The city would allow homeowners to offer short-term listings, including Airbnb, for guests as part of changes made to a proposed ordinance that would regulate rentals.

The biggest revision to the proposed ordinance submitted Monday is the city would allow homeowners who remain in the home to rent out their property to guests without registering.

"The City of Detroit has been working with Airbnb, and other stakeholders in the home-sharing industry, to create new regulation that maximizes benefits while minimizing burdens to all parties impacted by the activity,"  Detroit Corporation Counsel Lawrence Garcia said in a statement Monday.

Miranda Steinhauser, poses for a photo with her partner, Brandon Suman, in her home at 17405 Wildemere Street in the University District in Detroit.

"One of the biggest concerns for neighbors of hosted properties has been the 'party house' — where a host allows their property to be used for a wild, disruptive event, like a frat party. If the host is present on the property during the rental, a lack of accountability should not be a problem. Therefore, this version of the ordinance proposal only applies to rentals in which the owner does not remain present."

The latest revised ordinance will be introduced to the Detroit City Council on Tuesday before heading to the public health and safety subcommittee next week. The ordinance was put forth by Councilwoman Janeé Ayers.

“I don’t want to see people not being able to make any money,” Ayers said Monday during a public health and safety subcommittee meeting. “That’s not it. But what you don’t also want to see is neighborhoods turned into just being hotels.”

Discussion of an ordinance for short-term rentals picked up steam in recent months after the city decided not to enforce in early 2018 an ordinance the Detroit City Council approved several months prior that apparently prohibited an owner-occupied-unit to be used for paid overnight guests. The ordinance caught some city officials by surprise resulting in a legal review.

Ayers said there have been numerous ordinance versions drafted since the issue was first addressed. The effort has included the mayor's office; the Buildings, Safety Engineering and Environmental Department; and the law department. Airbnb also provided input, she said.

"From my perspective, we're in a good place with this version," she said. 

There are about 1,000 listings in the Metro Detroit including the city of Detroit, said Sam Randall, a spokesman for Airbnb.

"We look forward to continuing to work with the city on regulations that protect home-sharing, support a growing tourism industry in Detroit and do not stifle the earning power of its residents,” he said. 

The current proposed ordinance includes: 

  • Short-term rental properties must be an owner's primary residence.
  • Properties that are primary residences without the owners present must be registered with the Buildings, Safety Engineering and Environmental Department.
  • A certificate of registration must be posted.
  • Neighbors within 300 feet should be notified within 30 days of registration.
  • Rental units must be at least 1,000 feet apart.
  • Host may not rent to more than one group at a time.
  • No more than 10 people can be hosted at a time.
  • A property may not be rented out more than 90 days in a year.

A previous version drafted earlier this year included all of those provisions for all short-term rentals, including those where the homeowners is present while hosting guests.

That change provides some relief for such homeowners as Miranda Steinhauser who lives in the 1927 University District home. She rents out guest rooms 10 to 20 days each month. Steinhauser said she typically stays home while hosting guests. One exception was when she and her partner, Brandon Suman, rented their home to a golfer for the Rocket Mortgage Classic in June.

“Based on the new changes to the ordinance announced (Monday), I think the council is working toward a better direction but still has a couple major issues they need to address,” she said.

Steinhauser said non-owner occupied property owners should receive some consideration as well as those who want to leave their homes in order to rent them out for special events.

"It is quite customary for professional golfers and crews for such events to rent nearby residences for the week of the event, and for large sums," she said. "Because homeowners are obviously expected to vacate the property the week the athletes are onsite, they will suddenly be required to go through many hoops and pay fees, if they are able to rent at all."

Alex Pereira, a Woodbridge resident and developer, said being able to offer an Airbnb unit can make projects viable, including an 1880s mansion he restored. It's now a five-apartment unit building with one of the units listed on Airbnb.

“This space that we’ve created — and we have spent a lot of money on — would not be viable as a long-term rental because of the awkward ceilings in the attic space, but it allowed the project to become financially viable,” Pereira said during the meeting Monday.

"Because the short-term renter doesn’t care if the angles in the ceiling are slightly different than the rest. That’s actually what makes it charming to stay in those particular locations. I would urge you to consider how you deal with the non-owner-occupied requirement of these particular units because projects like this would not become viable, and we would end up losing a lot more buildings.”

Ayers said that in Pereira’s case, there may be a long-term renter for his unit. Eliminating non-owner occupied, short-term rentals would free up more affordable housing options for long-term renters, she said. 

“There’s somebody out there looking for a long-term rental that may have taken that space,” she said. “We don’t know if we don’t try.”


Twitter: @CWilliams_DN