Garrett Neese/Daily Mining Gazette Councilor John Haeussler of Hancock.

HANCOCK – In the early hours of the morning on Oct. 27, the Michigan House of Representatives passed House Bill 4722, a piece of legislation that would alter the regulation of rental properties in residential areas within the state of Michigan.

Introduced by Rep. Sarah Lightner, R-Springport, the bill would prevent a county, township, city, or village from adopting or enforcing zoning ordinance provisions that have the effect of prohibiting short-term rentals.

The term “short-term rental” is defined as “the rental of a single-family residence, a dwelling unit in a 1-to-4-family house, or any unit or group of units in a condominium, for terms of not more than 30 consecutive days.” This would apply to many rental properties offered by companies like Airbnb and VRBO.

Although the bill’s main focus is short term rentals, its language is not limited to short-term rentals alone. If it becomes law, it will likely impact other residential rental properties as well.

HB 4722 would still allow local governments to enforce some regulation on rental properties. A municipality could still limit the quantity of short-term rental units owned by an individual or restrict the total number of short-term rentals as a percentage of all residences. It could also regulate noise, traffic, advertising, or “any other conditions that may create a nuisance.”

However, if the bill becomes law, it will inhibit the powers of local government to regulate rentals, and prevent them from outlawing short-term rentals entirely.

HB 4722 passed Michigan’s House with a vote of 55-48. It was supported by Representative Greg Markkanen, R-Hancock. Representative Markkanen’s office declined the Gazette’s request for comment.

Proponents of the bill say that its passage will help property owners earn extra income and will give tourists more lodging options. Tourism in the Upper Peninsula is a growing industry with visitors flocking to the area for the history, scenery, and outdoor recreation opportunities. Airbnb reported that the UP was one of the company’s most popular destinations during the summer of 2021.

However, many Michigan residents and local officials are concerned that limiting municipalities’ ability to regulate rentals could have a negative impact on homeowners, communities, and businesses.

A June 2021 survey of 400 registered Michigan voters conducted by the Michigan Restaurant and Lodging Association (MRLA) indicated that 89% of respondents were concerned that the removal of local control over short-term rentals would result in higher housing costs, increased crime, and fewer homes for residents.

The Michigan Municipal League, a nonprofit association of Michigan municipalities and municipal leaders, also expressed dissatisfaction with the bill. CEO and Executive Director Dan Gilmartin released a statement shortly after the bill’s passage calling it “an attack on families and the communities they call home.”

“Who gains from commercial interests getting full access to our residential homes for revenue generating short-term rentals? Commercial investors, out-of-town business interests, and real estate brokers. Who loses? You and your community.” Gilmartin’s statement continued.

In May, the Hancock City Council passed a resolution opposing HB 4722 and the similar Senate Bill 446. This resolution was shared with Governor Whitmer, Rep. Markkanen, State Sen. McBroom, and several other members of the Michigan legislature.

At the Nov. 3 Hancock City Council meeting, Counselor John Haeussler expressed his disapproval for the bill and disappointment in Representative Markkanen for supporting it.

“It [HB 4722] certainly is very restrictive to local governments with regards to short-term rentals in my opinion,” he said. “I’m not sure who Representative Markkanen represents down in Lansing, but it clearly isn’t the local units of government in his district.”

In an interview with the Gazette, Councilor Haeussler discussed the bill and its implications for the City of Hancock.

“I’m always opposed to the state usurping power from local units of government. That’s just my philosophy,” he explained. “The people making decisions should be the people who live in your community.”

“Secondarily, I am concerned about what [the bill] is going to do to neighborhoods in Hancock,” Haeussler continued. “I’m concerned about the enforcement of our own ordinances and how they’re going to fit within this.

Over the last few years, the City of Hancock has been working to create a rental registration ordinance to keep track of residential rental properties in the city, ensure that they are safe and up to code, and address noise, trespassing, and other complaints. As of 2021, the rollout year for this new initiative, the city began maintaining an inventory of all residential rental properties within the city.

“There’s a big question about how much of our ordinance is not going to be enforceable if this house bill becomes law,” said Haeussler. “Are we going to be able to hold landlords, whether it’s short-term or long-term, to some kind of baseline building maintenance code?”

Haeussler was particularly critical of the language of the bill, which classifies a short-term rental as a residential use of property, rather than a commercial use.

“Why is the House of Representatives claiming that if you’re renting something, a dwelling, that that’s not a commercial use of property?” he wondered. “If you’re selling me something and I’m buying it from you, you can’t tell me that we’re not participating in a commercial act.”

For Councilor Haeussler, the prospect of the state of Michigan imposing a one-size-fits-all regulatory framework on municipalities is discouraging.

“There’s just all kinds of headaches that this creates, depending on how your municipality has tried to handle residential rentals,” he said. “Let the people in the community make the decisions for the community.”

After the House’s passage of HB 4722, the bill advanced to the Michigan Senate and was referred to the Committee on Regulatory Reform.