East Bay Township trustees will soon vote on extending a moratorium on new short-term rentals for another six months as the township works to update its vacation property rules. The new regulations could eventually cap the number of short-term rentals in the community and place mandatory 1,000-foot buffers between rentals.

Township trustees voted in June to put a halt on any new short-term rental licenses for six months, a ban set to expire on December 22. Board members this week introduced an extension – which they will officially vote to approve at the board’s November 14 meeting – that would extend that ban for another six months through June 2023. Staff said they need more time to work with legal counsel on the township’s new short-term rental rules and don’t want the moratorium to expire before the updated ordinance is in place.

“We don’t want to extend any longer than is necessary,” said Township Supervisor Beth Friend. “However, six months goes very quickly. We knew that when we passed the first one. We’ve just from that time (in June) kept an eye on the calendar, and we don’t want to run into a bind with any timing there.”

A sharp increase in short-term rental activity – and complaints from neighbors living near vacation properties – prompted township officials to take a closer look at ordinance rules, according to Township Director of Planning and Zoning Claire Karner. “We were seeing clustering of short-term rentals in the lakes area and Pine Grove neighborhood, and we were getting calls from real estate investors looking to purchase investment properties,” she says. “It wasn’t someone wanting to buy a home for themselves and rent it out, it was investors driving a lot of those purchases. We were also hearing concerns voiced from the neighbors.”

To avoid a situation in which the township announced it was updating its rules and then was inundated with applications from owners trying to get in ahead of the ordinance rewrite, trustees issued the moratorium on any new licenses while the rewrite is underway. Current short-term rental licensees can continue operating and renew their active licenses, which cost $350 annually. However, expired licenses will not be renewed during the moratorium. There are 169 active short-term rentals in the township, 27 of which were newly licensed in 2022 before the moratorium took effect.

In addition to approving the moratorium extension, trustees will also discuss the latest draft of the new rules next month. The updated ordinance will likely contain two key provisions missing from the township’s current ordinance: a cap on the total number of vacation rentals allowed in East Bay Township and a mandatory buffer between rentals.

“The revisions will reflect the direction that came from the township board,” Karner says. “They were looking for a larger separation in distance between properties, like 1,000 feet, and they wanted to see visually on some maps what that would look like.” Township staff also proposed capping short-term rentals at three percent of the township’s total housing stock, or approximately 170 licenses. However, Karner says trustees seemed more interested in a 2.5 percent cap, which would total about 150 licenses. “I think they were looking for something a little bit lower,” she says.

With 169 active licenses already in play in East Bay, a 2.5 percent cap would essentially mean no new short-term rental licenses could be issued. “The way that new short-term rentals would be licensed is through attrition, if people chose not to renew,” explains Karner. That could set up high demand whenever a new license does become available, similar to demand some communities have seen for limited recreational marijuana permits. Karner says East Bay would “need to take a close look at creating a fair and equitable process” for issuing new licenses in the event demand and availability do exceed a cap. Current short-term rental owners wouldn’t be able to cash in on that demand; licenses do not carry with the property and would expire during a property sale.

Several homeowners wrote to trustees supporting the moratorium extension and tougher rules for short-term rentals. Mitchell Street resident Kenneth Frymire called for a total ban, noting that he now has one short-term rental next to him and another across the street. “This situation is getting close to us,” he wrote. “Do the right thing and ban short-term rentals from our township.”

Linda Fischer, a full-time resident on Spider Lake, says she has watched “year after year” as nearby homes have been sold as investment properties, including to out-of-state buyers. “Right now, we have a rental next to us and soon might have another one next door to that,” she wrote. “Spider Lake is experiencing the most STR rentals in East Bay. We love our lake, but people coming in and out every week with no regard to the safety and wellbeing of our lake has really changed our lake.”

Several short-term rental owners opposed the moratorium when it was first issued in June. John Jury, who owns a rental on River Road, said the township should better enforce its existing ordinance and make sure licensees are following rules and regulations. Other owners pointed out that the township already has a process in place for handling neighbor complaints and should continue utilizing that. According to Karner, East Bay has received 13 complaints about short-term rentals in 2022, including 11 noise-related complaints, one light-related complaint, and one dog-related complaint. All of those have since been resolved except for one noise-related complaint that is still in review, she says.

Township staff said they were hopeful a new ordinance can be adopted before June – possibly in the next few months – but that a moratorium extension will ensure the township is covered in the meantime. Friend also said East Bay was paying attention to proposed legislation that would prohibit communities in Michigan from banning short-term rentals – currently stalled in the legislature – and are considering that as staff work on the new rules. The legislation has proven highly controversial and doesn’t yet have a clear path to enactment, but could be taken up again by lawmakers after the election. “We have had counsel review the legislation for impact to our ordinance, which we think will be limited,” Friend told trustees this week. “But we want to make sure.”