The Cleveland Township Board adopted a new short-term rental (STR) ordinance cracking down on rentals in residential and agricultural districts this week. The board previously held a public hearing on the ordinance in May, but postponed action to this week to confirm if the ordinance would conflict with legislation being discussed in Lansing.
After reviewing the Michigan house bill (HB) in question, the board decided to pass the ordinance.
At the May public hearing, the board had been alerted during the public comment period that the Michigan House of Representatives is considering a bill regulating STRs. According to the Michigan Municipal League, HB 5438 would create a statewide STR database and impose a new excise tax of 6% of the occupancy charge.
According to at least one member of the public who attended last month’s meeting, if this bill is enacted into law, it could make some of the work in the Cleveland Township ordinance redundant. Township Supervisor Tim Stein agreed to research the bill and give the board updates starting in June.
“There was some implication at the public hearing that this STR bill would impact the township’s ordinance. After reviewing the bill and what it entails, that is not true at all. This house bill would complement and enhance the Cleveland Township Ordinance,” Stein said Tuesday.
Stein said that in essence, the bill would prohibit local governments from completely banning STRs. And in his view, the statewide database would complement their plan to contract the software company Granicus to monitor STR listings in the area.
Initially, Stein recommended waiting another 30 days before passing the ordinance at their July regular session, but following discussion with the rest of the board, township officials agreed to pass it that evening.
The ordinance goes into effect 30 days after being published in the newspaper. Per the ordinance, all STRs in residentially and agriculturally zoned districts are in violation of the township zoning laws, and STR owners are required to apply for a limited number of permits.
According to the document, prioritization for granting the permits depends on when the application for renewal is received, the principal resident exemption status of the owner’s residence, and whether the applicant is in Leelanau County, with the remainder to be awarded by a random lottery.
Failure to comply with the STR ordinance’s standards will result in a municipal civil infraction and a fine of not more than $500, plus costs of prosecution up to $500. Any violation of the ordinance may result in an STR permit being permanently revoked.
Some STR owners at the meeting in May appeared to view this ordinance as a change from the status quo, but Stein insisted that STRs were never allowed in these districts. When asked why they were considering an ordinance now, Stein said it was because the number of STRs in the area became excessive during the coronavirus pandemic.
At the May regular meeting, Stein said there are currently 96 STRs in Cleveland Township, and 32 of them are in residentially or agriculturally zoned districts.
