Legislation being considered in the State House would establish an additional 6% tax on booking a short term rental that goes almost entirely to local governments. This would be in addition to the state’s current 6% lodging tax. Also, local municipalities would not be allowed to ban short-term rentals.
It’s still a controversial issue as communities weigh the benefits of increased tourism with the possible removal of year-round housing inventory.
“They do help the economy, there’s no doubt about that — it brings other people into our area that may not have normally been here or couldn’t afford a hotel stay,” said Rep. John Roth, R-Interlochen. “But it is affecting our housing crisis that we have up here and a big, big way.”
According to Northern Michigan leaders and lawmakers, don’t count on the fixes being in place before this summer — a solution to the issue will be delayed yet again.
“Is it happening before fall? No, that’s my gut feeling,” Roth said.
That’s because lawmakers will likely be busy with finalizing the state’s annual budget. Passage of a short-term rental law by the summer always seemed to be a long shot.
Rep. Joey Andrews, the legislation’s main sponsor, says the focus will be on getting the bills through the house this summer and past the senate by the end of the year.
“We’re optimistic about the direction they’re taking,” he said. “And I would say I hope that everybody sees the compromise that we’re trying to make here, when states like Hawaii are passing legislation that enables full bans — and ours is not doing that.
The specifics of the plan are still being ironed out, including the feasibility of the proposed 6% tax, which rental owners say puts an undue burden on their businesses.
Despite the delay in action, housing experts say the proposals allow Northern Michigan residents and municipalities to prepare for what could be coming down the pike.
“Housing is a marathon, not a sprint,” said Yarrow Brown, director of Housing North. “And so I think if we know this is potentially coming, I think there’s one ways we can prepare and get ahead of it and start to get our communities open to some opportunities for how they can use that when it does come.”
