Home > News Room > Press Releases > Good Neighbor legislation is good-sense compromise for Michigan communities, economy and tourism industry while safeguarding property rights

Legislation that balances the necessity for communities to provide proper regulation and oversight over commercial enterprises in their neighborhoods while continuing to allow short-term rental properties in all communities was introduced recently.

The “Good Neighbor Policy” legislation, House Bills 5465 and 5466, is supported by a coalition of organizations representing local government, public safety, the restaurant and lodging industry, economic development and more. The compromise legislation was initiated as an alternative to the harmful HB 4722, currently on the House floor, which eliminates all authority for municipalities to zone for short-term rentals and creates a top-down, one-size-fits-all approach for every community in the state.

“Residents trust their elected leaders to know and make decisions on what is best for their own unique communities,” said Judy Allen, MTA director of government relations. “This legislation treats short-term rentals—unregulated and unlicensed commercial ventures in residential areas—the same as other in-home commercial businesses. To help protect the safety of their neighborhoods and preserve the quality of life of permanent residents, municipalities must continue to have a say over these operations.”

Today’s legislation balances the needs of both sides, allowing community oversight while ensuring property owner’s rights. “Residents turn to their locally elected officials when an issue arises, so these bills are a needed compromise to allow for municipalities to have reasonable oversight over short-term vacation rentals,” said Jen Rigterink, legislative associate with the Michigan Municipal League. “The existing legislation ties local officials’ hands, rendering them virtually powerless. A balanced approach is needed and what these bills bring forward.”

Recognizing the value that this lodging option provides to communities, visitors and property owners, HB 5466 amends the Michigan Zoning Enabling Act to allow every property owner the ability to rent their property for up to 30 days per year in all residential areas, while allowing for reasonable zoning regulations. The legislation will help mitigate the impact on the state housing crisis, which is exacerbated by out-of-state companies purchasing homes solely for short-term vacation rentals. The bill creates greater parity between requirements and regulations among the unregulated short-term rental enterprises and other “typical” hotel and motel lodging.

“This plan represents the building blocks for what can be an all-encompassing solution to creating an equitable playing field between short-term rentals, local governments and traditional lodging facilities,” said John McNamara, vice president of government relations for the Michigan Restaurant and Lodging Association. “It provides much-needed tax and liability parity between STRs and traditional lodging facilities. I look forward to working toward a solution that puts this issue to bed for good in Michigan.”

HB 5465 establishes the Short-term Rental Regulation Act that requires all short-term rentals and hosting platforms, like AirBnB or VRBO, to register the property with the state Department of Licensing and Regulatory Affairs, allowing for improved awareness and regulatory enforcement. The properties are required to adhere to safety features, such as liability insurance, and on-site smoke and carbon monoxide detectors and fire extinguishers. Municipalities may enact reasonable regulations to protect health and safety, and proactively mitigate nuisance issues, such as noise, parking and traffic.

“Our region and state proudly and warmly welcome visitors from all over the world to enjoy our innumerable attractions, events and destinations every year,” said Amy O’Leary, executive director of SEMCOG, the Southeast Michigan Council of Governments. “This legislation builds on prior efforts to balance the economic benefits of tourism with community safety and quality-of-life concerns. Locally elected representatives are the people closest to the unique concerns of their residents and business owners, and they are the ones best positioned to enact common-sense policies that support the neighborly relationships Michigan is known for.”

According to a recent survey, the vast majority of Michigan residents—89%—are concerned about the effects short-term rentals will have on the prices and availability of housing, and the impact that it could have on crime due to the transient nature of the short-term visitors or residents. In addition, based on the recent TargetPoint Consulting Survey, the legislation aligns with voter sentiments, as nearly 80% believe that their local municipality should have a say over rules and regulations for short-term rentals as each community is individual and has varying wants and needs.
Coalition members look forward to working with lawmakers to ensure a common-sense approach to a long-running issue in the state can be fairly and equitably resolved. Coalition members include:

Community Economic Development Association of Michigan • Conference of Western Wayne • Housing North • Michigan Association of Chiefs of Police • Michigan Association of Fire Chiefs • Michigan Association of Planning • Michigan Bed & Breakfast Association • Michigan Historic Preservation Network • Michigan Lakes & Streams Association • Michigan Municipal League • Michigan Poverty Law Program • Michigan Restaurant and Lodging Association • Michigan Townships Association • Saginaw County Chamber of Commerce • Southeast Michigan Council of Governments • Superior Lakes Investments