Markkanen, McBroom meet on short-term housing bills
ONTONAGON — Controversial legislation on short-term rentals dominated a recent meeting with state legislators and constituents in Ontonagon.
State Sen. Ed McBroom and state Rep. Greg Markkanen answered questions from about 15 residents during the session, which lasted about 70 minutes Monday afternoon. They also had a meeting earlier in the day with community leaders, including village and county officials.
Much of the meeting was taken up by House Bill 4722, which passed last month by a 55-48 vote, and Senate Bill 446. It would not let local municipalities adopt or enforce zoning provisions that would effectively bar short-term rentals. It also classifies short-term rentals as a residential use, rather than commercial.
Under the recently passed House bill, municipalities would be able to regulate items such as noise and other nuisances, provided they apply equally to all rental and owner-occupied residents.
Copper Country municipalities, including Houghton and Hancock, have passed resolutions opposing the legislation.
“It literally strips local control except in a few instances, and functionally it’s an unfunded mandate on local government, because we cannot address the issues unless they are the same for every resident,” Ontonagon Village President Tony Smydra said.
Markkanen, R-Hancock, also a co-sponsor of the bill, voted in favor. He said he had disliked the initial version of the bill, which did not include any provisions for local control.
The revised bill allows local governments to inspect properties for compliance of an ordinance on the grounds of public health and safety. It also allows local units of government to limit the number of short-term rentals owned by one property owner to two, and sets the limit at 30% of a municipality’s housing stock.
The bill went through 11 rewrites over 13 hours on the floor, getting to a point Markkanen said offered “the best balance between protecting private property rights and giving local control.”
“At some point, you have to balance those personal property rights with the ability to have local control, like Ontonagon wants and deserves,” he said after the meeting. “If you bought three houses, I’m going to defend your right to have two of them as short-term rentals.”
The bill’s Senate counterpart, SB 446, was referred to the Committee of the Whole in May. McBroom, R-Vulcan, said he broadly supports legislation, calling it a matter of property rights. Communities that would try to bar it entirely are potentially opening themselves up to lawsuits, which could create a financial liability, he said. He cited Marquette’s 250-property cap on short-term rentals, which it hit in 2019. (Marquette has also passed a resolution opposing the bills.)
“That’s not equal distribution of property rights to every class of residents,” McBroom said after the meeting. “That’s allowing a select few to have a right if you don’t allow anybody else, and we don’t allow that kind of governance in Michigan.”
However, McBroom wants to see several changes to the bill. He said he is working on adding an excise tax of up to 5%, which would send revenue to the county. The county would put it before the voters and show the breakdown of how it would support local services.
“That’s something critical that the whole team’s been working on this opportunity to make sure that there’s parity with the other transient housing, to make sure that that is going then to support the local services that you all pay for, but aren’t robust enough to deal with the insurgence of people who are visiting who don’t pay for those services,” he said.
McBroom said he and other senators had slowed the momentum of the bill, which others had wanted to see come up for a quick vote after the House’s passage.
“Right now, I don’t think the bill will move at all for a long time,” he said.
Smydra questioned Markkanen’s statement of dissatisfaction with the House bill, noting that he was a co-sponsor. McBroom defended Markkanen’s co-sponsorship of HB 4732, saying it is a way for legislators to have greater influence in revising the bill.
Markkanen was also co-sponsor on state Rep. Sara Cambensy’s bill HB 5172, which would add an 3% excise tax in certain counties that would go to public safety. The bill was referred to the House’s commerce and tourism committee in June.
Smydra said he believes the excise tax needs to come down to other local units of government.
“For the county sheriff department to address an issue in Bruce Crossing, it’s going to take forever and it’s not going to happen,” he said. “The county doesn’t have enough officers to have regular road patrols as it stands now.”
Markkanen said in addition to an excise tax, he would like to see a lower cap on the percentage of short-term rentals. Under the bill passed by the House, municipalities cannot impose restrictions until short-term rentals comprise 30% of the housing stock.
McBroom also wants to see the cap lowered.
“Thirty percent is a bigger deal to a community of 700 houses than it is to a community of 5,000 households, so I think we need a better formulation for that to happen,” McBroom said. “I think recognizing the difference between out-of-state corporate ownership versus next-door neighbor’s ownership is also an important distinction.”
In Ontonagon, that would be about 225 houses, Smydra said.
McBroom said he felt communities that would like to regulate the legislation out of existence were opening themselves to lawsuits and potential financial liability.
Other residents suggested differentiating in the bill between properties owned by people who lived in or were from the area, versus outside owners. One person suggested a requirement that the owner lived at the property 75% of the year.
“I would never think I had the right to run down to Rhinelander, Wis., buy a house, turn it into a VRBO (vacation rental by owner), and have the residents around that house unhappy with how things went and think, ‘I’ve got the right to do it, so by golly, I’ve got to do it,'” another resident said.
McBroom said the idea has been talked about but is more difficult to put in writing.
“It’s really easy within our own minds to draw a line we think we can all agree on what’s reasonable, but when I have to write it into the statute itself it proves much, much more difficult to take that kind of conceptual idea and braid it into a fair law that will be upheld in the courts,” he said.