Elk Rapids and Elmwood Township are the latest northern Michigan communities to tackle short-term rental (STR) ordinances, attempting to balance private property rights and the economic benefits of tourism with the preservation of neighborhood character and protection of year-round housing. Elk Rapids approved a new STR ordinance last week, while Elmwood Township has scheduled a public hearing for September on its proposed STR rules.

Both communities have spent months deliberating over new ordinances that would regulate where and how unsupervised vacation rentals – like Airbnb units – could operate locally. Elk Rapids issued a moratorium this spring on any new STRs while village officials wrestled with writing the new rules. In a 6-0 vote Monday – with Doug Bronkema abstaining – the council approved a new ordinance that requires all STR units to be registered annually with the village and bans unlicensed units from being rented or advertised. Units are limited to a maximum of 10 guests (no more than two per bedroom), and no overnight lodging is allowed outside of the dwelling, such as in travel trailers, campers, tents, buses, or RVs. STR owners must following parking and safety regulations and can be subject to inspections by the village enforcement officer.

All existing STRs that have been operating in Elk Rapids since at least 2018 will be grandfathered in and able to continue operating with proper registration and licensing. There will be a cap set on new vacation units, but the village council has not yet determined what that cap will be. Priority for new licenses will be given to owners whose principal residence is in Elk Rapids – a deterrent to out-of-town investors gobbling up property for vacation rentals. Elk Rapids residents will also receive priority on an STR waiting list when the cap has been reached.

The ordinance has proven controversial among village residents, particularly STR owners who feel officials are being “overreaching” and attempting to regulate an industry that has operated peacefully on its own for years. Several STR owners said they provided feedback to officials on the proposed rules they felt was rejected or ignored. “There’s no problem that needs to be solved,” STR owner Linda Witulski told council members, adding that vacation rentals “have a positive impact” on Elk Rapids and that the ordinance was “systematically prejudiced” against rental owners. “You successfully created bad blood between neighbors in our little community.”

Keenan Delaney, who operates the rental property The Delaney House on Traverse Street, called the ordinance “divisive and risky legislation,” questioning its constitutionality. A proposed registration and annual licensing fee of $500 drew particular ire during public comment, with STR owners saying it was disproportionally high compared to surrounding communities. “The fees are excessive…you’ve lost a lot of trust,” said Sally Murray. “The public trust is eroded.”

Council members themselves were divided on the $500 fee, voting 3-3 to approve the fee schedule – a tie that resulted in the motion failing. The council agreed to revisit the fee schedule and potentially come up with a different figure at their September 7 meeting, where they will consider an appeals process for violations. The ordinance outlines a series of escalating penalties for violations of the rules, including a written warning, municipal fine, and revocation – potentially permanently – of a license.

Council trustee Melissa West acknowledged the outspoken opposition to the ordinance among some Elk Rapids residents, but said the village has acted thoughtfully to try and balance the needs of all constituents in writing the rules. “I have listened and read countless emails and sat through multiple forums and I feel like we have listened to…all of the concerns, and we have made some concessions and changes,” she said. “I understand that (the backlash) comes from a lot of people who are advocating for their business and their livelihood. We have to take the entire community as a whole into consideration, so we’re weighing all of those options.”

Elmwood Township planning commissioners expressed similar concerns about balancing the needs of all community members when discussing a proposed STR ordinance Tuesday. As with Elk Rapids’ policy, the township’s proposed rules would cap the number of STRs allowed to operate, mandate annual licensing and fees, and require owners to follow parking, safety, and nuisance rules. Those include having quiet hours, limiting occupancy to two renters per bedroom (excluding small children), prohibiting anyone from sleeping outside the dwelling, and requiring the owner or a designated caretaker to be physically located within 30 miles of the property in the event of an emergency.

Planning commissioners originally proposed to cap the number of STRs at 75, but called that figure into question Tuesday after debating the districts in which vacation units should be allowed. As proposed, STRs would be allowed in most districts – though they would only be allowed in the agricultural district and residential districts one and two (R-1 and R-2) if units were already operating in the two years prior to March 2019. That was when the township’s board of zoning appeals decided that STRs are not permitted under Elmwood’s existing ordinance. Several planning commissioners Tuesday expressed discomfort with allowing STRs in R-1 at all, however, saying those residential areas don’t allow any other kinds of commercial uses without an owner present and questioned making an exception for vacation rentals.

Data provided by Planner/Zoning Administrator Sara Kopriva shows that banning STRs in R-1 would eliminate nearly half the units operating in the township. An estimated 45 STRs are located in that district alone, of more than 100 operating in Elmwood. Many of the R-1 units are in waterfront areas and are long-time family cottages that might only be rented out a few weeks a season to help families afford them, planning commissioners acknowledged. The board said it was possible the township could create a new waterfront district to address those specific properties, but that process could take 6-12 months. Planning commissioners ultimately decided to hold a public hearing in September on the proposed rules with key changes, including eliminating STRs in R-1 and reducing the overall pool of available licenses to 40. Chair Rick Bechtold said it was a “real struggle” to come up with “just the right mix of things to give people who are supportive of short-term rentals and people who are not supportive of short-term rentals, ” adding that a perfect solution might not exist.

Planning commissioner Kyle Trevas said that while he also struggled with finding the right answer, he believed the township was facing a graver issue than landing on the perfect language for an STR ordinance: the loss of year-round housing stock for full-time residents. “If this doesn’t get stopped, we’re just over time going to banish real citizens from living in the township,” he said. “We’ve got to get this contained or we’re just going to continue to lose housing, which I think is a serious problem. I think it’s a much greater problem than supporting the two or three restaurants that exist in the township (with tourism business).”

Pictured: Downtown Elk Rapids