Oakland County, Michigan Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Oakland County

Oakland County, which includes many of Detroit's northern suburbs, has seen much discussion in recent years around regulating short-term rentals like those listed on Airbnb and VRBO. While rules vary by municipality, there are some common themes:

• Many cities require a permit or license to operate an STR. For example, anyone wanting to run an STR in Ann Arbor must apply for a license.
• STRs are often restricted to certain zoning areas, typically outside of residential neighborhoods. Ann Arbor has designated specific areas for non-owner occupied STRs. Traverse City only allows STRs in residential zones if they are a room within the owner's house.
• Some cities cap the number of STRs allowed. South Haven has a 1:4 ratio, requiring 4 standard residences for every 1 STR. Holland limits STRs in residential areas to owner-occupied properties.
• Local governments may require the STR owner or manager to live nearby to handle any guest issues. This is the case in Mackinac Island and Ann Arbor.
• Annual registration and fees are common. For example, all rental units including STRs in Grand Haven must register yearly and pay a $140 per unit fee.

However, the ability for cities to restrict STRs may soon be limited. The Michigan state legislature is considering bills that would prevent municipalities from banning or severely restricting STRs. The Michigan Municipal League argues this would infringe on local control.

Before listing a property as a short-term rental in Oakland County, it's critical to review the specific zoning ordinances and regulations of that city or township. HOA rules and insurance requirements should also be considered. With the proper licensing, location selection, and adherence to local laws, running an STR can be a profitable business in Oakland County. But staying on top of the evolving legal landscape is a must.

Short-Term Rental Licensing Requirements in Oakland County

While some cities within Oakland County, like Ann Arbor, have established licensing requirements for short-term rentals, there does not appear to be a county-wide licensing program based on the information available. Regulations and requirements can vary significantly between municipalities.

A few examples of STR rules in Oakland County cities:

1. Ann Arbor requires STR operators to obtain a license and has designated specific areas for non-owner occupied rentals.
2. Clawson passed an ordinance (No. 766) establishing registration and licensing requirements for STRs, with fees required. Registrations expire upon sale of the property.
3. Hazel Park instituted STR regulations under ordinance No. 06-23, though details on licensing are not specified.

However, at the county level, the Oakland County Association of Township Supervisors passed a resolution opposing state bills that would eliminate a township's ability to zone and regulate STRs. This suggests most STR policy is set at the city/township level rather than by the county.

For those considering operating a short-term rental in Oakland County, it's critical to check with your specific city or township on their requirements, as they can differ dramatically. Information on the registration process, fees, timelines, and penalties for non-compliance should be obtained directly from the local municipality.

Statewide, there has been an ongoing debate over how much control to give local governments in restricting and regulating STRs. But as of now, the licensing landscape in Oakland County remains very locality-dependent, without an overarching county-wide system to navigate. Prospective STR operators must do their due diligence to ensure they are complying with all municipal ordinances before listing their property.

Required Documents for Oakland County Short-Term Rentals

When applying for a short-term rental license or registration in Oakland County, Michigan, hosts are typically required to provide certain documentation. However, since the regulations can vary significantly between municipalities within the county, the exact requirements may differ depending on the specific city or township.

Based on the available information, here are some commonly required documents for short-term rentals in Oakland County:

1. Rental Registration Application: Hosts must complete and submit a rental registration application form provided by their local government. This form typically requires information about the property owner, the rental property, and any authorized agents managing the property.
2. Proof of Ownership: Hosts may need to provide documentation, such as a deed or other legal instrument, to demonstrate their ownership of the rental property.
3. Floor Plan: Some municipalities, like Farmington Hills, require hosts to submit a floor plan of the rental property with all rooms labeled.
4. Proof of Residency (for owner-occupied rentals): In cities like Farmington Hills, hosts of owner-occupied short-term rentals must provide proof that they use the property as their permanent residence, such as a driver's license or utility bills.
5. Payment of Fees: Hosts may be required to pay various fees, such as a rental registration fee or inspection fee, as part of the licensing process. For example, Clawson's ordinance (No. 766) establishes registration and licensing requirements for STRs, with fees required.
6. Proof of Insurance: Some municipalities may require hosts to provide proof of liability insurance coverage for their short-term rental property.

It is crucial for hosts to consult with their specific city or township authorities and review the relevant ordinances to determine the exact documentation requirements for their location. The information and guidance on the licensing process can often be obtained from the local government's planning, community development, or building departments.

Failure to provide the required documents or comply with the licensing regulations can result in fines, penalties, and potential legal issues for short-term rental operators in Oakland County.

Oakland County Short-Term Rental Taxes

Short-term rental operators in Oakland County, Michigan, are subject to various taxes at the state and local levels. Understanding these tax obligations is crucial for hosts to ensure compliance and avoid potential penalties.

State Taxes:

Use Tax: The State of Michigan imposes a 6% use tax on the listing price, including any cleaning fees, for short-term rental reservations of 30 nights or less. This tax is collected and remitted by platforms like Airbnb on behalf of the hosts.

Local Taxes:

1. Accommodation Tax: Some cities within Oakland County, such as Genesee County, levy an additional accommodation tax. In Genesee County, this tax is 5% of the listing price, including cleaning fees, for reservations of 29 days or shorter.
2. Hotel-Motel Tax: Certain counties, like Kent County, impose a hotel-motel tax on short-term rentals. In Kent County, this tax is 5% of the listing price, including cleaning fees, for reservations of 29 nights or less.

It is important to note that the tax rates and applicability may vary depending on the specific city or township within Oakland County. Hosts should consult with their local government's tax department or a tax professional to ensure they are aware of all applicable taxes in their area.

Possible Write-Offs or Deductions:

Short-term rental hosts may be eligible for certain tax deductions to offset their tax liabilities. Some common deductions include:

1. Mortgage Interest: If the rental property is mortgaged, hosts can deduct the interest paid on the mortgage loan.
2. Property Taxes: Hosts can deduct the property taxes paid on their short-term rental property.
3. Maintenance and Repairs: Expenses related to maintaining and repairing the rental property, such as cleaning supplies, landscaping, and general repairs, can be deducted.
4. Utilities: Hosts can deduct a portion of their utility expenses, such as electricity, water, and internet, based on the percentage of rental use.
5. Depreciation: Hosts may be able to deduct the cost of furnishings, appliances, and other assets in the rental property over their useful life through depreciation.

It is recommended that hosts consult with a tax professional to determine which deductions apply to their specific situation and to ensure proper documentation and reporting of these expenses.

In summary, short-term rental operators in Oakland County must navigate a complex landscape of state and local taxes. By understanding their tax obligations and taking advantage of available deductions, hosts can minimize their tax liabilities and maintain a profitable rental business. However, it is crucial to stay informed about any changes in tax laws and regulations and to seek professional advice when necessary.

Michigan Wide Short-Term Rental Rules

Currently, there is no overarching state-wide licensing system or set of regulations for short-term rentals in Michigan. The rules and requirements for operating an STR can vary significantly between municipalities, with cities and townships setting their own policies through zoning and ordinances.

However, there is proposed legislation that would establish state-level oversight of STRs. House Bill 5438, part of a larger 10-bill package, would create the Short-Term Rental Regulation Act. Key provisions include:

1. A 6% excise tax on short-term rentals, on top of the existing 6% use tax. This could generate $35-70 million annually, with proceeds going to local governments.
2. A requirement for all STRs to carry a minimum of $1 million in liability insurance.
3. Mandated safety measures like fire extinguishers, smoke alarms, carbon monoxide detectors, and posting of emergency contacts and escape plans.
4. An annual registration fee of $100 per listing for STR platforms like Airbnb and VRBO, capped at $50,000.

Importantly, the bill would still allow local governments to regulate STRs through zoning, permitting, and other rules. This preserves some local control, which the Oakland County Association of Township Supervisors has advocated for in a resolution opposing state efforts to limit municipal oversight of STRs.

Within Oakland County itself, STR policies are set at the city and township level, not by the county. For example:

1. Ann Arbor requires a license to operate an STR and restricts non-owner occupied rentals to certain zones.
2. Clawson has an ordinance requiring registration and licensing of STRs, with fees.
3. Hazel Park regulates STRs under ordinance No. 06-23, though details on licensing are not specified.

So for now, Oakland County STR hosts must navigate a patchwork of local regulations, which can differ dramatically between jurisdictions. Staying informed on both municipal ordinances and the status of the proposed state-wide legislation is critical. If HB 5438 becomes law, it would introduce a new standardized regulatory framework, taxes, and insurance mandates that all Michigan STR operators will need to follow, while still allowing for some local rules.

Does Oakland County Strictly Enforce STR Rules?

Based on discussions in real estate investing forums like Bigger Pockets and Reddit, Oakland County appears to take a relatively strict approach to enforcing short-term rental regulations compared to some other areas in Michigan. Several cities within the county, such as Ann Arbor, Clawson, and Hazel Park, have enacted ordinances requiring permits, limiting STRs to certain zones, and imposing other restrictions.

Clawson's ordinance allows the city to revoke an STR's registration after three violations within 12 months, indicating a willingness to enforce the rules. The Oakland County Association of Township Supervisors has also passed a resolution opposing state bills that would limit local control over STRs, suggesting a desire to maintain the ability to regulate them.

However, enforcement likely varies somewhat by municipality. In a Reddit discussion, one host mentioned operating STRs in Oakland County cities without major issues, but noted the importance of keeping a low profile and avoiding neighbor complaints.

Overall, Oakland County seems less Airbnb-friendly than some other Michigan destinations known for embracing STRs, like Traverse City and certain coastal communities. But hosts who carefully follow local regulations and are conscientious neighbors can still operate successfully.

While some hosts may skirt the rules, the county's track record of enacting ordinances and defending local regulatory control points to a stricter enforcement environment than many other areas. Prospective Oakland County STR operators should thoroughly research their city's specific requirements and be prepared to comply fully. Attempting to fly under the radar carries real risks in this jurisdiction.

How to Start a Short-Term Rental Business in Oakland County

Starting a short-term rental business in Oakland County, Michigan can be a lucrative venture, but it's crucial to follow the proper steps to ensure compliance with local regulations and set yourself up for success. Here's a step-by-step guide to get you started:

1. Research local regulations: Familiarize yourself with the specific STR rules and ordinances in your city or township within Oakland County. Requirements can vary significantly between municipalities, so it's essential to understand the regulations specific to your property's location.
2. Obtain necessary licenses and permits: Many cities in Oakland County, such as Ann Arbor and Clawson, require STR operators to obtain a license or permit. Contact your local government's planning, community development, or building department for information on the application process, fees, and requirements.
3. Prepare your property: Ensure your rental property is clean, well-maintained, and equipped with the necessary amenities to provide a comfortable stay for your guests. Consider hiring a professional cleaning service between bookings to maintain a high standard of cleanliness.
4. Set up your listing:Create a detailed and attractive listing on popular STR platforms like Airbnb and VRBO. Include high-quality photos, a comprehensive description of your property and its amenities, and clear house rules. Be transparent about any quirks or limitations to manage guest expectations.
5. Determine your pricing strategy: Research the rates of similar properties in your area to ensure your pricing is competitive. Consider factors such as seasonality, events, and demand when setting your nightly rates. Utilize dynamic pricing tools to automatically adjust prices based on market conditions.
6. Implement a screening process: To protect your property and minimize the risk of disruptive guests, establish a screening process for potential renters. This may include requiring a minimum age, setting occupancy limits, and reading reviews from previous hosts.
7. Comply with tax obligations: Short-term rentals in Oakland County are subject to various taxes, including state use tax and potential local accommodation taxes. Register with the appropriate authorities and ensure you collect and remit the required taxes.
8. Obtain proper insurance: Contact your insurance provider to discuss the specific coverage needed for your STR business. You may need to purchase additional liability insurance or a commercial policy to fully protect your property and assets.
9. Establish a communication and check-in process: Develop a system for effectively communicating with guests before, during, and after their stay. Provide clear instructions for check-in and check-out, and make sure guests have a way to reach you or a designated property manager in case of any issues or emergencies.
10. Monitor and adapt to changes: Stay informed about any updates to local STR regulations and be prepared to adapt your business as needed. Regularly review and improve your listing, pricing, and guest experience based on feedback and market trends.

By following these steps and maintaining a commitment to providing excellent service, you can build a successful short-term rental business in Oakland County. Remember to always prioritize compliance with local regulations and open communication with your guests to create a positive experience for all parties involved.

Who to Contact in Oakland County about Short-Term Rental Regulations and Zoning?

When navigating the short-term rental regulations in Oakland County, it's essential to know who to contact for information and guidance. Here are some key resources:

1. Oakland County Planning and Zoning Department: For questions about zoning ordinances and requirements for short-term rentals in Oakland Township, contact Donald Mende, Planning Coordinator, at 248-651-4440 ext. 216 or dmende@oaklandtownship.org. Regular working hours are Tuesday - Thursday, 8:00 AM - 4:30 PM.
2. Oakland Township Zoning Board of Appeals: If you have questions about the Zoning Board of Appeals process or need assistance, contact the Planning Department at 248-218-6958 or the Building Director, Tim Berger, at tberger@oaklandtownship.org.

In addition to official contacts, connecting with other short-term rental hosts and real estate investors in Oakland County can provide valuable insights and support. Consider joining these local groups and communities:

• Real Estate Investors Association of Oakland (REIA of Oakland): This non-profit organization, established in 1981, offers education, networking opportunities, and resources for real estate investors in Oakland County. They host monthly general meetings and subgroup meetings focused on specific strategies, such as short-term rentals. Visit their website at https://www.reiaofoakland.com for more information.
• Real Estate Investment Association of Oakland County - Meetup Group: This Meetup group, with over 1,000 members, hosts regular events and meetings for real estate investors in Oakland, Macomb, and Wayne counties. They offer a mix of educational sessions, networking opportunities, and discussions on various investment strategies, including short-term rentals. Join their Meetup group at https://www.meetup.com/real-estate-investment-association-of-oakland-county/ to stay informed about upcoming events.
• Metro-Detroit Airbnb Owner's Guild: This group brings together short-term rental property investors in the Metro-Detroit area to share best practices, organize, and combine buying power. They meet monthly at Noni's Grille in Troy. Check their Meetup page for upcoming events: https://www.meetup.com/real-estate-investment-association-of-oakland-county/

By connecting with these local government resources and engaging with the real estate investor community in Oakland County, short-term rental hosts can stay informed about regulations, learn from experienced investors, and build a strong network of support.

What Do Airbnb Hosts in Oakland County on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in real estate investing forums like Bigger Pockets and Reddit, Airbnb hosts in Oakland County have mixed feelings about local short-term rental regulations:

On Reddit, in a thread about Michigan House voting to bar Airbnb bans, one host mentioned operating STRs in Oakland County cities without major issues, but noted the importance of keeping a low profile and avoiding neighbor complaints. This suggests some hosts are able to navigate local rules, but have to be careful.

However, another Redditor pointed out that many smaller towns in Northern Michigan have banned STRs because over half the houses on the market were being turned into short-term rentals, causing problems. While not specific to Oakland County, this highlights concerns driving STR restrictions in Michigan.

In a separate Reddit post, the news of Ann Arbor (located in Washtenaw County adjacent to Oakland County) banning dedicated Airbnb properties in residential areas drew support from many commenters. They felt it was a reasonable compromise - still allowing homesharing but prohibiting investment properties operating as permanent STRs in neighborhoods. Some thought it could help the long-term rental market.

On Bigger Pockets, while no discussions were found specific to Oakland County, there were Michigan hosts expressing frustration with increasing restrictions on STRs statewide. One host vented about communities "attacking STRs" and shared an article about proposed state legislation to prevent local Airbnb bans.

Another Bigger Pockets thread debated a bill in the Michigan legislature to prohibit banning STRs. Some felt it was government overreach and that local communities should decide their own STR policies. Others argued the state needs consistent rules and that banning STRs violates private property rights.

Overall, Airbnb hosts in Oakland County and across Michigan seem wary of increasing regulations on STRs at both the local and state level. While some have been able to operate within existing rules, there is concern about the future of their investments if more restrictions are enacted. The debate over how to balance property rights with community concerns about the impacts of STRs remains contentious.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.