For some, vacation rentals are an enticing way to own a little bit of heaven Up North -- buy a home on the water, stay for a few weeks in the summer and pay for it by renting the property short-term for the rest of the year.

The trend accelerated in recent years as websites like Airbnb and VRBO have exploded the market for short–term rentals. Now officials in local municipalities are weighing how to respond.

Permissive vacation rental rules likely raise property values and increase tourism -- but might also unfairly compete with hotels, strain availability of affordable housing, disrupt the peace and turn off homebuyers who want to live in a residential neighborhood. Shutting down rentals, on the other hand, takes away property rights and income from homeowners and might mean fewer tourists and more houses sitting empty.

In Petoskey, officials worry that the increase in short–term rentals might radically alter the housing market and strain the ability of businesses to hire workers.

“I’m getting a call probably every other week from someone looking to buy a house, and they want to know if they can do a vacation rental -- that’s probably the biggest question we get,” says Amy Tweeten, Petoskey’s city planner. “A lot of units that have been workforce housing historically are becoming vacation rentals.”

Petoskey prohibited new short-term rentals in residential areas in 2014. Now the city is preparing to crack down. Tweeten says letters and notices of violations are being sent out this spring. Civil infractions start at $150, but if a property owner continues to defy the ordinance, the penalty escalates.

Meanwhile Northport is much more open. If you own a home you want to rent short-term, you’re merely asked to register the property with the village.

Barb Von Voigtlander, Northport’s administrative coordinator, says she hasn’t heard of any problems caused by vacation rentals.

“It’s been working fine -- we have about 30, 31 short-term rentals that have been registered to date, and so far we have not experienced any complaints with any that we’ve registered,” Von Voigtlander says.

There are some 400 homes in the village, so short-term rentals make up less than 10 percent of housing. Besides, she says, many of the homes now used as vacation rentals were dilapidated and unused before they were bought as investments and restored. Now, at least, the homes host guests and pay taxes.

One northern Michigan township did away with vacation rentals a decade ago, even before Airbnb was founded in 2008.

Alan Martel, Torch Lake Township supervisor, says his locality decided to enact a vacation rental ban because people love the residential character of the township and don’t want neighbors operating businesses.

“In our township, we have Lake Michigan on one side and Torch Lake on the other, and it’s one long residential strip,” he says. “It comes down to what you want for your waterfront -- do you want it to be a commercial enterprise? Or do you want it to be a residential area?”

Martel believes in the ban so much that he’s become an evangelist for short-term rental prohibition: In January, when Acme Township held a public hearing about what kind of short–term rental policy to enact, he travelled the 22 miles between township halls and spoke in favor of eliminating rentals.

Kim Pontius, executive vice president of the Traverse Area Association of Realtors, counters that if local governments hold public discussions, they will learn that most residents want flexible policies that allow vacation rentals.

He notes that discussions in Suttons Bay Township about an ordinance last year started out restrictive and then became more permissive as additional people weighed in.

“To bar them outright -- I think that’s shortsighted, and I don’t really think it’s fair,” he says.

Kathy Egan, the Suttons Bay Township planner, says officials there didn’t intend to ban short-term rentals, but rather they realized between 2012 and 2016 that housing in the township was slowly being consumed by them. They passed an ordinance that requires homeowners to apply for a permit. The township will sort out the details over the next year and make it a requirement in 2018.

Acme Township Supervisor Jay Zollinger says he learned at that January public forum that short-term rental policy is a complicated balancing act between competing property rights and that there isn’t a simple answer.

“It’s a real tug of war both ways, and neither is particularly wrong,” he says. “There are some [rentals] that have been here for years and have never been a problem. We also know people who have been renting and there’s always been a problem.”

That sentiment was echoed by many commenters at the hearing where 27 speakers voiced opinions -- 20 were more or less in favor of vacation rentals and seven were opposed. Many pointed out that one or two rentals seemed to be giving the whole concept a bad name because of noise and garbage left behind.

The planning commission was to take up the matter Apr. 10 and will eventually make a recommendation to the board, either that short–term rentals should be banned, that they should be allowed or that they should be allowed with conditions.

Trevor Tkach, Traverse City Tourism president, believes that in many cases, the way short-term rentals compete against hotels is not fair or sustainable.

Tkach says he hears from hotel operators that vacation rentals hurt their businesses and that the playing field should be level. For example, hotel operators believe that fees and assessments like the five percent room fee local hotels pay by state law to fund the statewide convention and visitors’ bureau should also be paid by short-term rentals.

“I’d say, at the very least, that the systems in place should be fair and equitable so that if a hotel or lodging facility is being held to a certain standard, everyone should be held to that standard,” he says. “That should always be consistent -- no one group should have an upper hand.”

For example, Tkach believes that short-term rentals should be held to the same fire code and accessibility standards as hotels and should be required to have someone available in the middle of the night to handle complaints.

If you open Airbnb’s Traverse City page, the market for vacation rentals looks robust. While Traverse City doesn’t allow short–term rentals in residential areas, there are several exceptions to that rule -- short-term rentals are allowed in certain developments, at tourist homes and in the downtown business district, for example.

Dave Weston, Traverse City zoning administrator, says he enforces an ordinance against short–term rentals when he learns of violations. He says he hasn’t issued any tickets so far this year, but letters have been sent out and the city code enforcer has followed up and driven by homes to look for signs of vacationers. Last year, one homeowner on the base of Old Mission Peninsula received a second-offense ticket, but Weston says most people stop once they receive a warning letter.

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