A guest column by Carl Cyrowski, Orion Township Real Estate Agent
The Village of Lake Orion has enacted an ordinance which regulates Short Term Rentals (STRs) for terms of less than 30 days. According to this ordinance (No. 26.98) it affects every “dwelling unit or group of units in the Village.” This ordinance was put into effect in 2019 and infringes on people’s property rights.
Recently, the Michigan House of Representatives has passed bill 4722 which would prohibit municipalities from enforcing these ordinances and make them null and void. This bill will be in front of the state Senate for their approval, which should take place in early 2022.
In the meantime, the village is handing out tickets to any home owner who rents their home for less than 30 days. The fine is $150 for every violation. The Lake Orion police are sent to your home to bother your tenants and ask if they are renting the house for less than 30 days and not for any other reason, such as a violation of the noise or parking ordinances!
If your guests answer is yes, then a ticket
is issued and mailed to the home owner! The
police, in most cases, are responding to complaints by other village residents; however, the police can confront any person living in a dwelling unit with this question! Many times, the police run into friends or relatives of the owners who are staying in their property gratis so no ticket can be issued.
Most of these short-term rentals are registered with national companies such as Airbnb or VROB, who handle the renting of their properties for a fee paid for by the property owner. These leasing companies vet the prospective tenants as well as vet the home owners. A questionnaire is required by these companies to be filled out by the owner of the property and also from the tenant, including proper identification and credit checks before and after their rental stay.
The rental companies evaluate the property based on what the tenants have to say about the property after their stay. The companies use these reports to rate the properties and refer new tenants according to a grading system. This is a far superior system than what most other long term or short-term rental property owners in the village use
before renting out their properties!
There are strict guidelines by these companies for both the owner and the tenant and, if not adhered to, then the owner or the tenant will not be allowed to further use of their services. If the home owner receives poor grades from the tenants, they are dropped from the company’s rental property list. If the tenants cause problems or trash a property they will not be allowed to use the company’s services again. It is a great system which not only protects the owner of the property, but also the tenant who pays the rental fee up front to the company.
The company then sends the rental owner their portion of the rental fee and at the end of the year they are issued a 1099 as well a
copy goes to the IRS.
The police should be used as they are
intended – to enforce the safety and well-
being of the community, not police rental units! The police have better things to do with their valuable time! If any person, renter or not, breaks the law by loud partying or other breaking-the-peace or parking ordinances the police can issue them a ticket.
Also, some complaints by homeowners have been that short-term rentals bring down the value of adjacent properties. This is definitely false, as there are several studies that have shown that short-term rentals actually bring up the values of houses in the area because of how the short-term rentals must be maintained and who are allowed to rent them.
The figure by one study shows that because of the presence of short-term rentals, the value of single-family homes in the area rose from 0.66 percent average to a 2.24
percent growth rate per year, almost four
times that of other areas in the community.
The owners of short-term rentals also compete against each other for the prettiest and most inviting short-term rentals. So, it is in their best interest to not only keep their property up, but to keep them in the best condition possible in order to attract further rentals.
The owners of the short-term rentals also promote their tenants use of the village’s businesses, such as restaurants, gift shops and other similar stores in the area. Most owners of the short-term rentals provide a list of the local businesses for their tenants’ use. Some businesses even provide coupons.
These store owners have verified the fact that they have gotten additional business from the renters of these short-term rentals, who are generally not from the area and are interested in finding out what the village and the lake have to offer them during their stay!
I believe that the Village of Lake Orion should suspend the enforcement of this ordinance as it does nothing to enhance the value of the community but makes a mockery of the village’s saying that Lake Orion is “Where Living is a vacation!”