Why Locals are Banning People from Renting — and How to Stop It

Brian Westrin, Elaine Page, Kelli Fickel and Christina Sandefur share their experiences with homesharing at a Mackinac Center Issues & Ideas Forum.

While cities like Detroit and Grand Rapids have largely embraced short-term rentals, that’s not the case everywhere. Homesharing, which allows people to rent out their residential property through companies like Airbnb and HomeAway — has become increasingly popular in Michigan. But some municipalities are fighting back by banning the practice.

That’s not right, said panelists at a recent event sponsored by the Mackinac Center for Public Policy. Renting out your property for short periods of time has been done for as long as people have owned a cottage “up north.” But modern technology makes the process easy. Vacationers can find a unique place to stay, often at a lower price than hotels, and homeowners can exercise their property rights while earning a little extra income.

Despite the benefits, this practice has some opponents. Hotels and members of the accommodations and tourism industry don’t like the competition. And some residents and homeowners associations don’t like the flow of new people coming through the neighborhood. These groups have encouraged local government officials to charge excess fees or even ban these rentals. That’s happened in Traverse City, Grand Haven, Holland and elsewhere.

Kelli Fickel and Elaine Page are homeowners on the west side of the state who rented out property to people through Airbnb. They welcomed guests from around the world, were accepted by their neighbors and never heard of any complaints. But Holland taxed them at a higher rate and eventually shut them down.

Christina Sandefur, executive vice president of the Goldwater Institute in Arizona, argued that the arbitrary enforcement of home sharing laws — to deem it a criminal activity to rent out a home for less than 30 days — severely infringes on property rights. Her organization has filed lawsuits across the nation on the issue.

Brian Westrin, vice president of public policy and legal affairs for the Michigan Realtors, said the problem is local officials mistreating short-term rentals as commercial activity and outlawing it.

“We’re not telling [local governments] not to regulate at all. … But you should not use zoning to treat property owners favorably in one sense or unfavorably in another or to ban it outright,” Westrin said.

The situation for homesharing individuals may be changing. Senate Bill 329, sponsored by Sen. Joe Hune, R-Fowlerville, and House Bill 4503, sponsored by Rep. Jason Sheppard, R-Monroe, would forbid local governments from using zoning regulations to prohibit short-term rentals.