Ferndale Considering Regulations for Airbnb/Short Term Rentals
(Crystal A. Proxmire, March 21, 2021)
Ferndale, MI – The City of Ferndale is considering an ordinance that would require owners of short term rentals, such as those offered on Airbnb, to register their properties and maintain certain standards in order to maintain their license.
“If these property owners want to change their property from a residential home to a business, then they need to be treated like a business,” said Councilperson Greg Pawlica at the Jan. 25, 2021 city council meeting where the proposed ordinance to license and regulate LTRs was first introduced.
The ordinance would require an annual fee for property owners, set clear rules for the number of people permitted to stay overnight based on available space, and provide a mechanism for revoking licenses of property owners who fall short of standards in terms of upkeep, limiting guests, and avoiding issues such as parking problems, parties, and crime.
Tracking and inspection would be funded by the fees. The proposed fee is 185.00 per year for Residential Short Term Rental Unit, $185.00 a year for a Non-Residential Short Term Rental Unit, and $75.00 a year refund of a portion of the annual licensing fee for a Short Term Rental Unit leased for no more than 14 days a calendar year.
“When I was on council I started getting complaints from residents who live next to, or near, a short term rental and there were not a lot of records of a trend of Airbnb rentals in the city,” said Mayor Melanie Piana. “We really didn’t have a lay of the land in 2019 of where this was going.”
The City created a taskforce to study the STR issue, and has already connected with 20 STR owners who voluntarily participated in registering their properties.
The City also has been tracking ads for STRs through sites including Airbnb. They found that depending on the season there were between 30-90 STRs advertised.
Emily Loomis, the City’s Assistant Building Official, stated “The goal of the ordinance, is right now short term rentals are not regulated, so any building or structure could technically operate as a short term rental, but without regulation. This allows the city to regulate short term rentals to try and mitigate any adverse impacts that it can have on the welfare, the safety, the health, and just the overall quality of life for the surrounding properties.”
Some issues include buildings that have not been cleaned and maintained, as well as those that have attracted large parties and even crime. A Jan. 4, 2021 drive-by shooting is one example. Neighbors to the north in Royal Oak have had similar problems.
“Some of the goals with the ordinance are overnight occupancy limits,” Loomis explained. “This one is based off square footage and the tables within the Michigan residential code. There is the ability to revoke the license of a short term rental if it has had three documented, verified ordinance violations with the revocation per review of City Manager.” Complaints would need to be substantiated, and the City Manager would have discretion for revocations. There would also be an appeal process.
At the Jan. 25 meeting, resident Mike Flores, who owns multiple STR properties in cities outside Ferndale, explained the economics, saying that property owners make more money in the three months of renting at $100-$500 per night in the busy travel season, than in an entire year renting to a person or family to live there year-round.
Not including unregistered STRS, about 20% of housing in Ferndale is registered as long term rental properties, which are inspected and regulated for use by long term tenants.
As traditional renters are displaced and a revolving door of transient guests comes in, complaints to the city increase. Piana acknowledged the challenge for neighbors. “They didn’t sign up to live next to a hotel when they bought their house,” she said. “So there’s a balance here that we’re trying to achieve.”
In addition to the immediate concerns of neighbors, the City is concerned with the loss of affordable rental properties for residents. “Places like Traverse City and Saugatuck have a real problem with more homes going over to short term rentals than being available for people to live in, losing some affordable housing. So it’s a real issue for cities,” Piana said.
On top of finding a way to preserve affordable housing without imposing on property owners’ rights, municipalities are facing the potential for deregulation by the state.
“There’s another track here going on at the same time, the legislative track,” Mayor Piana said. “The legislators have been trying to prevent cities from passing short term rental ordinances and preempting them, taking away cities’ power to even put in a local ordinance so the local government can even try to control these short term rentals in the way that is best for their community. “ She said cities would have to be mindful that such legislation could pass and the ordinance would no longer apply. She encouraged those who have an opinion to reach out to their State officials to weigh in on the issue.
The ordinance will be introduced at the Monday, March 22 Ferndale City Council meeting. For more info visit https://www.ferndalemi.gov.