Traverse City fears losing control of rentals

Carol Thompson
Traverse City Record-Eagle

Traverse City — The top floor of Allison Hurd’s 11th Street home often is a setting for out-of-towners’ celebrations.

Couples visit for honeymoons and anniversaries. Marathon runners rest up for the big race. International travelers plan their first excursions into northern Michigan.

“It’s kind of cool to be able to share your town you love with people who want to come visit, and it’s a little more personal than a hotel,” Hurd said.

Hurd controls her neighborhood short-term rental market, thanks to a Traverse City ordinance that limits the number of “tourist home” licenses allowed within 1,000 feet of one another.

It’s a restrictive policy that has yet to catch up with the times, Hurd said.

But a state Senate bill proposing to limit local governments’ ability to zone short-term rentals could circumvent Traverse City’s regulations.

Senate Bill 329, introduced last month by state Sen. Joe Hune, would define short-term rentals as a residential property use and would prevent local zoning boards from regulating short-term rentals.

The bill, if passed, would completely change Traverse City’s rental rules, said Zoning Administrator David Weston.

“We don’t allow (some short-term rentals),” Weston said. “If this bill got enacted, it seems to be that they would not be under regulations of zoning. They would be allowed.”

Traverse City bisects short-term rentals into two categories: tourist homes and vacation rentals.

Vacation rentals, in which a homeowner rents out an entire unit, are not allowed in residential areas. They are allowed in the city’s commercial districts, which sometimes include home and condominium developments.

Tourist homes are sometimes allowed. They are regulated like bed and breakfasts. Homeowners in residentially zoned areas are allowed to rent out rooms on a short-term basis, but they must be present while renters are there. Homeowners must be licensed and be farther than 1,000 feet from other license-holders.

Those rules don’t stop some Traverse City residents from renting their homes on websites such as Airbnb, Weston said. He routinely pens letters to those homeowners who violate city policy, and occasionally sends them $400 tickets for operating against the ordinance.

Previous city leaders contended short-term rentals were commercial uses of residential property and inappropriate for residentially zoned swaths of the city, Weston said.

“I think it’s really just the perception of the commercialization of the neighborhoods,” he said.

Hurd occasionally participates in discussions about local rental regulations. She said the city’s regulations are strict, but contended a bill aimed to squash local control of short-term rentals swings too far the other direction.

Property owners should have a right to use their homes as they see fit, but they shouldn’t do so at the expense of their neighbors and the community.

“There’s a happy medium where the community can still enjoy their neighborhoods and still allow people to make extra income off of their biggest assets,” Hurd said.

Hurd recommended city officials loosen their grip on the rental market so more families and homeowners can rent rooms and homes to vacationing guests. The practice is lucrative — it helps Hurd pay for renovations, landscaping and her own vacations — and it’s fun.

But neighborhoods packed even tighter with vacationers could drastically change Traverse City.

“I’m not sure what the solution is,” Hurd said. “It’s just seems like there’s a balance there between banning it completely and opening it up to the degree this new bill would have us do.”