Evening the Playing Field
Airbnb brings the comfort of home to consumers, yet a lack of regulations make the lodging industry uneasy
Tech-heavy “sharing economies” are on the rise. With Airbnb alone valuing at $30 billon within just a decade, online business models continue to transform lodging, tourism and travel across the globe. Instead of tourists staying at a well-located hotel to experience new destinations, residents who live at or near said destination can turn their properties into short-term rentals (STRs).
While change and competition are welcome, any and every change is just as detrimental to businesses as stagnation, according to Michigan Lodging & Tourism Association (MLTA) President and CEO Deanna Richeson. In Michigan, home to thousands of rental homes, certain changes are in the process of potentially becoming law: House Bill 4503 and Senate Bill 329.
“The lodging industry and tourism industry have seen competition as a hallmark of improving guest services and attracting more visitors,” said Richeson. “We do our best, as an industry, when we have an even-playing field — Airbnb and short-term rentals, right now, are not playing on an even playing field.”
The similar bills will require municipalities to designate STRs for residential use instead of commercial use, which stumps zoning authorities intended to preserve the character of neighborhoods and property values; if empowered, any short-term rental property — in any Michigan neighborhood running a series of 28-day leases — would not be subject to local zoning ordinances.
STRs can easily burden services for residential communities without accommodating for disturbances rooted in tourism. Airbnb has agreed this past summer to collect a 6-percent use tax on rentals of 30 days or fewer in Michigan, but this doesn’t account for further grey areas, trash pick-up, safety and health regulations, and more responsibilities designated hotels have no leeway in.
“We support local control,” according to a joint correspondence from the executive leadership of eight statewide associations — including MLTA — to State Rep. Holly Hughes, chairwoman of the House Tourism and Outdoor Recreation Committee.
The joint correspondence came days before MLTA’s Legislative Action Summit on Wednesday, Oct. 4, located at the Anderson House Office Building in Lansing. This conference empowered lodging staff, management and other stakeholders to learn how to better communicate with key decision-makers.
Among topics such as Pure Michigan funding and ballot proposals surrounding the minimum wage and tip credits, the Legislative Action Summit included a press conference on the impact of STRs, featuring a coalition of local officials and homeowners standing with MLTA.
Ottawa County’s Spring Lake Township joined the coalition because one quiet neighborhood was disrupted by a short-term rental unit for several years. After eight months of research and speaking to hundreds of residents, township officials and citizens passed an ordinance last December requiring certain standards for STRs. If HR-4503 and S-329 become law, they will overrule that vetted, local decision.
“Every community is different, and lawmakers in Lansing shouldn’t be taking away our [township’s] ability to set standards based on public hearings and what we’re hearing from residents,” said Steve Nash, supervisor of Spring Lake Township, at the presser. “Local governments and the residents who live and work in those communities are the ones best suited to determine where short-term rentals work, and under what terms. We need to keep that local control.”
While STRs with the owner still living in the unit are easier to manage, 20 percent of Airbnb rentals involve that type of home-sharing accountability; most units operate more like vacation properties.
“Renting out a room in a home where the owner lives most of the time is one thing,” said Pauline Smith, a resident of Oakland County’s White Lake Charter Township, who was also present at the conference. “But with no owner oversight, these rentals often are just party houses for anyone who wants to rent them.”
Lodging and tourism are adapting to the times in Michigan, but there’s much work to be done. Dynamic STRs rely on a level of local participation; for the benefits of these online marketplaces to truly run statewide, an even ground will have to be clear to the markets already here.
“The opportunity for a different travel experience is clashing — it’s colliding — with the permanent residents in neighborhoods,” said Richeson. “That’s exactly why MLTA has formed a coalition with like-minded organizations … it [an STR] hurts our industries, our businesses, our neighborhoods, our local government authorities … we’re trying to educate across the state.”
To research the bills and make your voice heard, visit legislature.mi.gov and contact your local legislator.