STEVE'S BLOG

Short-term Rentals Will Destroy Neighborhoods

The short-term rental industry has changed the travel industry.  As a host to a short-term rental, you can diversify your investment portfolio.  Platforms, like Airbnb and VRBO, has put the conventional hospitality industry on notice, if not on its heels.  The experience that a short-term rental can offer its customers is unparallel to the accommodations of a sterile two beds and bathroom.  The conventional hospitality industry, 701 hotels and motels nationwide, has looked to legislation for help and for good cause.

For the customer, the benefits of short-term rentals are the diverse experiences that can be offered.  A host can offer an extended stay that makes it feel more like home with all the amenities of a kitchen, a living room, and a backyard situated in an actual neighborhood.  This can be extremely attractive to the travelling businessperson who has grown tired of takeout and the smell of industrial cleaner.  The most elegant reason is the little escape to a unique lakefront property with a mirrored image of a sunset reflecting across a lake.  These are perfect for family reunions, romantic get-aways and week-end celebrations (i.e., bachelor, bachelorette parties).  However, there is a downside.

The negative impact short-term rentals have on a community are getting national attention as they break up the continuity of a neighborhood.  A once peaceful neighborhood is disrupted by the transient nature of temporary lodging with constant traffic and house parties.  This disruption of inconsistent occupancy undermines many aspects that make a community great.  The nuclear family that created many Norman Rockwell paintings are getting replaced by party goers that disrupt permanent residents that desire a peaceful night, or weekend.  For example, the tenants are not anchored to the community as a family that is investing their lives, by way of their children, into their local businesses, churches, and schools. The increase of police presence, in otherwise quiet neighborhoods, that respond to nuisance ordinances reduce the sense of security.  It does not stop there.

Many neighborhoods are becoming a victim of gentrification as the value of the area increases to the detriment of long time, and future, residents.  Current homeowners are migrating out of neighborhoods in search of the quiet enjoyment promised by homeownership and prospective homebuyers are getting out bid by strong investors.  Investors are driven by business model that is not restricted to the same zoning ordinances that conventional hotels are required to obey (e.g., fire inspections, building inspections, licenses, and industry specific taxes).  This becoming big business as these types of accommodations have fallen below the radar for compliance and regulation.  These same investors have captured the attention of many republican legislators who are attempting to take away local control from duly elected officials.  In Michigan, House Bill 4722 and Senate Bill 446 to protect commercial operations that are specifically zoned for residential.  This will completely remove any input from the community leaders by undermining any zoning ordinances that conventional hospitality accommodations must comply.

            Therefore, if this legislation passes and short-term rentals fall under statewide protection, then the adjacent homeowners will lose their right to govern their communities.  While I do not enjoy many HOA’s, they may be the last hope to secure a peaceful neighborhood that guarantee specific protection to property owners.  It is imperative to understand that communities are unique and broad policies that impact individual rights should not be acceptable.  A blanket policy that stretches from the City of Monroe to Wakefield, and everything in between, should be looked at with a weary eye.  Who benefits from this opportunity?

Steve Unruh

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