The Michigan Legislature is debating how to regulate vacation rental properties in the state. For as long as the “cottage up north” has existed, property owners have allowed others to rent their property and websites like Homeaway, VRBO and Airbnb have made this process easier than ever. But local governments in some Michigan communities are starting to overregulate and even ban short-term rentals like these.

From a free-market perspective, the government should not be preventing people from using their property as they see fit, as long as they aren’t violating the rights of others. Some local government officials and homeowners argue that renters are having loud parties, parking illegally or disrupting the neighborhood in other ways.

Two bills, House Bill 4503 and Senate Bill 329, try to tackle this problem. They prevent local governments from banning short-term rentals, but they explicitly allow them to regulate them in other ways. This is typically done by passing and enforcing ordinances related to noise, traffic, parking, advertising, litter, etc. This has led to opposition from local governments and others.

An article from Holiday Vacation Rentals, a property management company in northern Michigan, written by Jeremy and Alan Hammond does a good job summarizing some of these issues. The post analyzes private property rights for homeowners and neighbors, the economic impact of vacation rentals and tourism and the impact the bills are likely to have.

In sum:

It is important to find solutions to address communities’ legitimate concerns about vacation rentals and other short-term rentals. However, solutions must be found that are equitable and don’t violate homeowners’ property rights. Municipal officials already have regulatory authority to address concerns arising from some guests’ behavior without resorting to zoning ordinances. Furthermore, restricting vacation rentals is harmful to the economy at both the local and state level. Professional vacation rental management companies are an important part of the solution as they use and can enforce contractual rental agreements that help ensure rental guests remain good neighbors who are respectful toward others within our communities.

One of the most important individual rights is the ability to have ownership and control of your private property. The right to use your property as you see fit can be bothersome to others and governments can create regulations to help manage these issues. But those regulations should be fair and limited. The bills under consideration in the Michigan Legislature successfully navigate these issues and protect property owners’ rights while maintaining local governments’ ability to regulate when necessary.

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