Local governments would be able to enact a voter-approved tax on short-term rental lodging under bills introduced Wednesday in the Legislature. It is part of a long-running effort in Lansing to help communities manage the proliferation of short-term rentals, often sold through platforms like Airbnb or Vrbo.
But the initial response suggests there is a lot of work to do before a package is ready that will satisfy rental property owners and neighbors who complain they don’t want to live in a tourism district.
“If you’re renting that out to different short-term renters all summer long, that’s their week on the beach to howl,” said Representative Mark Tisdel (R-Rochester Hills). “Tourists don’t treat your city the same way residents do, right?”
Neighbors have voiced similar complaints in college towns where short-term rentals have been used for parties on game days and graduation weekends. Many short-term rentals are owned by landlords who own multiple properties where they don’t live.
“It creates a problem for the houses on either side, which creates a problem for the police,” said Tisdel. “Those expenses have to be covered.”
The proposed solution is to enable local governments to ask local voters to approve an excise tax on top of any existing taxes to shoulder additional costs to a community.
“It would have to go on the ballot,” said Tisdel. “It’s enabling legislation. That’s all there is to it.”
But advocates for short-term rental owners say there are a lot of flaws in the proposal as it is currently drafted.
“The biggest one for our members is property rights, the right to rent,” said Brad Ward, vice president of public policy for the Michigan Realtors Association.
“What we’ve seen over the last several years has been bans on short-term rentals, moratoriums on short-term rentals, severe restrictions on people’s right to rent,” Ward told Michigan Public Radio. “Even in areas where people have been doing this for generations, now suddenly (they) have lost the ability through local zoning to rent out their property.”
Ward also said if there is a new tax, some of the revenue should go to help fund the Pure Michigan tourism promotion program.
The three bills — HB 5138, HB 5139, and HB 5140 — have been assigned to the House Economic Competitiveness Committee, which will hold hearings on the legislation.
