ANN ARBOR, MI — Ann Arbor officials are still divided on whether to allow dedicated short-term rental properties such as Airbnb houses in residential neighborhoods.
City Council gave initial approval to allow existing ones to continue while maintaining a ban on new ones in a pair of 7-4 votes Monday night, April 5.
The regulations await final approval May 3 and they could grant “legal non-conforming status” to 120 or more short-term rental properties in residential areas.
That’s how many properties have been submitted for consideration so far since the city reached out to rental property owners, and there still could be more, said Brett Lenart, the city’s planning manager, who provided a map of the locations.
This map shows the locations of some dedicated short-term rental properties in Ann Arbor neighborhoods as of April 5, 2021. Though they're now banned, these and possibly others yet to be identified could receive legal non-conforming status to continue operating under pending ordinance changes.City of Ann Arbor
Some residents and council members argue short-term rentals are mini hotel businesses that don’t belong in residential zones and deplete housing supply for longterm residents, contributing to the city’s affordability challenges.
Others argue many short-term rental properties were legally operating in neighborhoods before the city tried to ban them and the city’s previous rules for rental properties didn’t distinguish between short-term and long-term rentals, so existing short-term rentals should be allowed to continue.
While the proposed solution isn’t perfect, Mayor Christopher Taylor urged his colleagues Monday night to accept it as the current reality, cut the city’s losses and move on to more important matters.
“This is imperfect, but the fact is that there are non-conforming uses and that they have been operating legally, and that’s the situation we find ourselves in,” he said.
Kathy Griswold, Jeff Hayer, Elizabeth Nelson and Ali Ramlawi are the four council members opposed to the changes carving out exceptions for existing short-term rental owners.
“I don’t think it’s appropriate to create a small group — or potentially a much larger group — of winners who happened to get in under the wire,” said Hayner, D-1st Ward.
One point of contention is that the legal non-conforming status would transfer and allow properties to remain short-term rentals as they’re sold from one owner to the next.
“We are creating a class of commoditized properties that will benefit very few,” said Ramlawi, D-5th Ward.
Ramlawi was part of City Council’s move last September to ban short-term rental properties in residential zones effective March 1, while still allowing homeowners to occasionally rent out their own owner-occupied homes and allowing dedicated short-term rentals in mixed-use zoning districts.
Airbnb property investors may sue Ann Arbor if council doesn’t lift pending ban
Taylor and his allies, who regained control of council in November, are now trying to carve out exceptions for existing short-term rentals in neighborhoods.
Some council members who support doing so still share concerns about the fact that the legal non-conforming status could transfer from owner to owner.
Deputy City Attorney Kevin McDonald said he would further look into whether there’s any legal ability to make the status not transferrable, but his answer Monday was generally no.
Ramlawi pushed for postponing consideration of the ordinance changes to June so officials could get a better sense of how many total properties might be affected. In a 7-4 vote, council rejected his request.
Nelson, D-4th Ward, expressed concerns a neighborhood could be “plagued” with a nuisance short-term rental house.
While a short-term rental license can be revoked if a property is deemed a public nuisance, “all they have to do is transfer ownership to somebody else for that license to be picked right back up,” Nelson said.
“I know there are a lot of members of the community that are disappointed that we’re messing with this,” Nelson said.
For existing short-term rentals to continue operating in residential zones under the proposed rules, they must already be registered as a rental property that undergoes city inspections and they must show proof they were operating as a short-term rental, such as a rental agreement with a guest who stayed for 30 days or less, officials said.
The city talks a lot about affordable housing and is putting a lot of money toward creating affordable housing, but in this situation the city is losing housing supply and city taxpayers are going to pay for it on the other end, Ramlawi said.
“I’m very perplexed,” he said, arguing the city is subsidizing profits for short-term rental owners.
“I’m hearing a lot of grandstanding tonight,” Council Member Erica Briggs, D-5th Ward, responded, calling the remarks about affordable housing “quite insincere.”
“Call to order!” Ramlawi interjected, taking issue with Briggs’ characterization.
If the last City Council was really concerned about protecting housing supply, it would have OK’d a ban on short-term rentals in mixed-use zones, not just residential zones, Briggs said.
“We have short-term rentals operating in every district of our community, and housing supply matters whether it’s in our mixed-use districts or within our residential zones,” she said.
“We probably do need to get a handle on how many short-term rentals are operating in our community and figure out what is the appropriate number that we’re comfortable with ... but these changes are about making sure that ... our ordinances are legally defensible and appropriate.”
Short-term rentals do take housing units off the market for longterm residents and it’s not a good thing, but they’ve been doing so for years with certificates of compliance from the city, Taylor said, adding he believes those property owners have rights and could win against the city in court.
Council Member Jen Eyer, D-4th Ward, said there are some pretty large housing developments coming up for a council vote, including one in her ward, and she looks forward to seeing council members who say housing supply matters support those projects.
“Because as has been said tonight, we need every new unit we can get,” she said.
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