City Hassles Homeowners Doing Airbnb Rentals, Legislature May Come To Rescue

A struggle between a group of committed property owners and city officials over whether to allow home sharing in Holland could soon be decided regardless of what the city decides to do.

This fall the Legislature may take up a bill that would define home sharing, or short-term renting that has been popularized by the internet service Airbnb as a residential activity. If passed, the bill would prevent local municipalities from banning the practice.

Elaine Page, who is one of the property owners in Holland pushing for the city to change its policy on short-term rentals, supports local control for municipalities. But she also believes her city has taken too long to decide what she can and cannot do with her property.

“It’s my right as a property owner to do what I want with my house,” she said.

After Page purchased her house in Holland in 2003, she spent her own money and time fixing up the property. Then in 2007, she got married, moving in with her husband, who lived in a different part of the city. But she couldn’t part with the house, she said, after all the effort she had put into it.

After her husband asked her why they were paying two mortgages, Page listed the home on the website VRBO for short-term rentals. That was in late 2010.

Page rented out her home on a short-term basis for almost four years without any objections from the neighbors of the home she was renting or from the city of Holland. She believed she was following all the necessary city rules: She paid her annual long-term rental fee and had the property inspected by a city inspector. She also paid the property taxes required of people who don’t live in the home they rent out, which in Holland are twice as expensive as the taxes due of owner-occupied dwellings.

In September 2014, Page received a cease-and-desist order from the city of Holland, which claimed she was violating one of its ordinances by renting out her home for less than 30 days.

After two more cease-and-desist orders, Page stopped offering short-term rentals. That was around July 2015. She now rents her home on a long-term basis but would prefer to return to short-term rentals.

Page and a small group of rental-home owners are fighting the city policy.

Holland City Councilmember Brian Burch – who lost in the most recent city election to a candidate backed by Page – believes allowing short-term rentals in residential areas will hurt the city and reduce Holland’s supply of affordable housing. He said South Haven, which is 30 miles south of Holland, has been greatly harmed by short-term rentals.

The objections by some in the city government to short-term home rentals could soon be moot if either House Bill 4503 or Senate Bill 329 becomes law. The bills, which are identical, would prevent local municipalities from banning short-term rentals or treating companies like Airbnb substantially different from other real estate. Cities would still be able to regulate short-term rentals, for example by limiting parking, responding to noise complaints, or dealing with other issues.

Brian Westrin, who manages public policy and legal affairs for the Michigan Realtors, favors the legislation.

“This is a fundamental private property issue,” he said.

Westrin also said being able to rent out a home on a short-term basis has become an important selling point for some homeowners.

Burch, however, does not think the legislation would be a positive step for the state.

“The Michigan constitution allows for home rule cities,” Burch said. “If [the bill sponsors] were truly conservative, they would allow local jurisdictions to govern themselves. They truly set a dangerous precedent.”

The Michigan Lodging and Tourism Association, which represents hundreds of hotels, motels, resorts, and bed-and-breakfasts in the state, declined to comment on the story.