Changes Could Be Coming For Short-Term Rentals, Daycares, Medical Marijuana Facilities

A trio of major changes to Traverse City ordinances – including new short-term rental rules, daycare regulations, and medical marijuana licenses – could soon move ahead after city planning commissioners this week agreed to set a June 5 public hearing on all three topics.

Planning commissioners met for nearly three hours Tuesday to discuss the three agenda items and could vote as soon as the June 5 meeting to approve some or all of the new rules, which would then go to city commissioners for final approval. The Ticker looks at the key rule changes in each area that could go into effect in the city this summer.

Short-Term Rentals
Years of ongoing debate over whether residents should be allowed to rent out their homes on vacation rental sites like Airbnb and VRBO could culminate in new rules that will allow more tourist homes to operate the city – though both planning commissioners and residents acknowledge the changes constitute a compromise unlikely to fully satisfy anyone.

The city’s current tourist home ordinance allows homeowners of single-family residences to obtain a license to rent out no more than three rooms in their homes for up to seven days at a time. The entire residence can’t be rented out, and residents must meet several requirements to obtain the licenses, including living on-site. Tourist homes also have to be more than 1,000 feet apart, limiting the number that can operate in the city.

According to city data, demand for the permits has risen dramatically in recent years: While an average of just three tourist homes operated between 2013 and 2016, that number grew to an average of 18 between 2016 and 2018.  While the city only received one formal complaint about tourist homes during that time, staff sent 26 letters to residents notifying them they needed to apply for a tourist home license because they were renting out rooms illegally and another 13 cease-and-desist letters to residents who did not meet the distance requirement and thus did not qualify for a license.

Under the proposed new rules, the city would create two categories of tourist homes: high-intensity, in which up to three rooms could be rented by three people per room for a maximum two-week stay (considered 85 or more overnight guest stays per year), and low-intensity, in which up to two rooms could be rented by two people per room for a maximum two-week stay (considered 84 or fewer overnight guest stays per year). There would be no distance requirement for low-intensity homes, but high-intensity homes would still be required to be 1,000 feet apart. The rule changes also include a new application, complaint, and license revocation process; a move to require inspections every three years instead of annually; and changes such as allowing no basement rooms, employee stays, or receptions/private parties.

While making rules more stringent in some areas, the new policy relaxes rules in others and opens up the locations in which tourist homes can operate in the city. City Planning and Engineering Assistant Missy Luick told planning commissioners that based on inquiries, “we think it’s plausible that there could be another 50 tourist homes that are applied for in the city” if the new rules are adopted. That type of influx would require more staffing time, Luick said. Accordingly, the city could considering raising the fee for tourist home licenses, which currently cost $100 for a first-time, one-year permit and $70 for subsequent one-year renewals.

The amended policy does not address vacation rentals (renting out one’s entire home for stays up to a month long), which are banned in all residential areas of the city but allowed in commercial zones. Planning commissioners may revisit the city’s vacation rental policy at a future date.

Both planning commissioners and residents expressed dissatisfaction with elements of the proposal, likely leading to significant debate at the upcoming June 5 public hearing. Dave Durbin, a resident who created a group called Traverse City For Airbnb/VRBO to push for allowing more vacation rentals, told commissioners his group asked for just two simple tourist home changes: removing the 1,000-foot barrier for all tourist homes and allowing unhosted stays. He expressed frustration that planning commissioners were making tourist homes “even more restrictive” to operate than they are now. “Our plan would have been extremely easy to understand and enforce and…we would still have the most conservative ordinance in this region,” he said. Planning Commission Chair Linda Koebert said it would likely be impossible to find a perfect solution to the city’s short-term rental debate.

“Do I think (the proposed policy) is perfect? No. Do I think it’s conservative? Absolutely…no one’s completely happy, no one got everything that they wanted,” she said. “Everybody had to give and take some, so I really feel that what has been drafted at this point is a good compromise.”

Medical Marijuana
While city commissioners start meeting this month to work on drafting new rules allowing medical marijuana facilities in the city, planning commissioners are simultaneously tackling the zoning aspect of the new ordinance, including identifying in what districts growing, processing, provisioning, transportation, and lab testing businesses can operate.

A draft policy that could be approved June 5 calls for limiting growing and transportation operations to industrial areas, with labs limited to industrial and hospital districts. Processing and provisioning centers could have more options, including operating in some commercial districts – with a call to keep provisioning centers at least 1,000 feet apart. City Planning Director Russ Soyring said issues that would need to be addressed by the city include waste disposal for marijuana byproducts, adequate power infrastructure near facilities, and a fair licensing distribution system. Soyring said going to a lottery system would be the “safest and best and most defensible” way to make medical marijuana licenses available in business categories where interest exceeded demand.

Daycare Facilities
Finally, new rules could make it easier for child care homes to operate in the city – changes considered by the planning commission to address a regional child care shortage. The proposed changes would open up neighborhoods in which different types of daycare facilities can operate in the city, as well as streamline the permitting process for many homes. One point of contention among planning commissioners for the new policy is determining how far apart to keep group child care homes, or those accommodating six to 12 children. The city’s current policy sets them at least 500 feet apart; staff suggested lowering that to 100 feet. Planning commissioners Tuesday expressed interest in a compromise more in the middle, potentially in the 300-foot range.