ANN ARBOR, MI - Ann Arbor’s City Council has passed an ordinance banning short-term rentals of residences that aren’t owner-occupied, signaling the end of dedicated Airbnb houses in the city.
City Council approved the ordinance by a 7-4 vote Tuesday, Sept. 8, prohibiting non-owner-occupied short-term rentals, like year-round Airbnb houses, in residential zoning districts. The ordinance goes into effect on March 1, 2021. Council members Chip Smith, Jeff Hayner and Julie Grand voted against the ordinance, in addition to Mayor Christopher Taylor.
The ordinance limits short term rentals to mixed-use districts. Local residents who want to rent out part of their primary residence or their whole house on a short-term basis still could do so.
After an extensive public hearing and about an hour of discussion, council members ultimately decided to approve the ordinance as it is, rather than postpone the vote to include ordinance language “grandfathering in” those who already operate short-term rentals or capping the number of short-term rentals in the city.
“We are talking about the difference between somebody who is able to live here, to work and study, and somebody who is able to visit here,” City Council Member Elizabeth Nelson, D-4th Ward said.
“I do not believe that Ann Arbor as a community is primarily a tourism destination. ... Primarily we are a job center in this region and we are primarily focused when we talk about housing issues, about the housing that is here for people to live here.”
Some council members argued the conversion of homes into dedicated short-term rentals is taking away housing that’s needed for longterm residents and impacting affordability by reducing the local housing supply.
Council member Jane Lumm said the ordinance was necessary to enact in preventing the “further deterioration” of permanent housing in the city, requiring licensing and registering of short-term rentals going forward.
“All we know is the number of short-term rentals has indeed grown and every home used for short-term rental is one less unit of permanent housing,” Lumm said.
Council member Zachary Ackerman said the city has not been able to compensate for the housing shortage it has experienced over the past 20 years, with consistently increasing enrollment at the University of Michigan and the addition of 13,000 new jobs in the area.
Making those short-term rentals available for community members or prospective community members, Ackerman said, is the right approach in solving the city’s affordable housing deficit.
“People wonder why rents are rising and houses are selling at astronomical rates, and the answer is because, among other systemic issues, we have a serious housing shortage," Ackerman said. "When we say short-term rentals account for only 0.2% of housing units, we’re talking about well over 100 units of housing today. That’s 300 bedrooms that are no longer available to community members.”
Some residents and operators of short term rentals believe the ban is an overreach of power, with some previously threatening to take legal action against the city if an exemption isn’t made for short-term rental properties already in operation.
Fourth ward resident Carol Scala said the ordinance was only considered after one resident began complaining about short-term rentals as nuisance properties. She believes City Council only began pursuing the ordinance when it became apparent it could use short-term rentals as a “housing scapegoat” for its inability to meet its affordable housing goals.
“The city has pushed and pulled their positions like a chameleon that can’t figure out the right camouflage,” Scala said. “When the dust settles, the taxpayers will look back at the manipulation of this effort to put legally operating rentals out of business for a handful of complaints that should have been handled by the police department or nuisance ordinance.”
Council member Chip Smith recommended tabling the ordinance, suggesting instead to come back later with a proposed cap on the number of short-term rental units the city would allow in addition to the licensing and registration process.
“If we keep it a little bit more simple, it will be a much better, fairer ordinance for everybody that will do what we hope it does,” Smith said.
The ordinance defines a short-term rental unit as any dwelling that is rented wholly or partly for a fee for less than 30 consecutive days by someone other than the permanent resident or owner. All short-term rentals will be required to be licensed.
It also requires issuing a short-term rental license to the property, specifies information required with an application process and establishes a fee. The ordinance also establishes that short-term rental hosts are responsible for all nuisance and enforcement complaints on their premises.
Under the ordinance, short-term rentals are allowed for those who are operating them out of their primary residence as a homestay – where the owner is present during guest stays. It also allows residential owners to rent out their whole house on a temporary basis. Those primary residence options do not require inspections, unlike rental units.
The ordinance was written by city staff after the city’s hiring of consultants from Carlisle Wortman Associates Inc. in 2019 to help the city explore regulatory options.
It’s estimated about 1,400 Ann Arbor properties were used for short-term rentals during a one-year period concluding last July, with 131 rented out for at least 150 days out of the year.
Those were mostly in the downtown and surrounding neighborhoods like the Old West Side, Old Fourth Ward and Burns Park.
READ MORE:
Ann Arbor residents divided on adding regulations for Airbnb short-term rentals
Dedicated Airbnb properties at center of Ann Arbor’s short-term rental ordinance
Ann Arbor officials still debating best approach to regulating Airbnb houses
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