A recurring theme in recent Ludington City Council meetings has been the anxiety and fear expressed by city officials as to the State of Michigan passing a bill that would prevent municipalities from banning or over-regulating short-term rentals (STR).  The way they frame recently passed Michigan House bill 21-4722 would make an unwary Ludington citizen believe that the state is trying to wrest away power from locals and individuals.  

This month's Building & Licenses Committee's minutes held before the bill was passed reflect that they did not consider the state's potential influence on the City passing new local laws on Accessory Dwelling Units (ADU) and expanding the number of allowable STRs in Ludington from 30 to 50.  However, at the last council meeting, the councilors deliberated over both issues more extensively, considering what might happen if the bill gets through the State Senate and gets signed into law by year's end.  This discussion led them to table a vote on ADUs until January, when the 'danger' of the bill's passage lessens considerably, and may lead them to do the same postponement with the STR ordinance which had its first reading at the meeting.

But even before that, City Manager Mitch Foster was trying to stress that this STR bill's passage had a very negative effect on the local housing market and local government power.  He and Community Development Director Heather Tykoski made the case against this bill in a recent article in the COLDNews, with reporter Justin Cooper making minimal effort to explain why this bill passed the state house or to lighten the city's own propaganda:

Foster does not stray into the realm of fantasy while explaining the potential impacts of the bill's passage into law, but Tykoski does when she paints an alarmist vision of predatory landlords switching their properties over to STRs and says:  "The bill takes away the right of the citizens to say this is how we want our community to be."

Her alarmism is shared by every councilor that spoke at this last Monday's meeting, and to a lesser, and controlled extent, by the city manager.  Yet, HB 4722 is quite simple and appears to actually bolster, not diminish, the rights of citizens to do more of what they want with their property nor does it diminish the power of local governments to regulate STRs in a reasonable manner.  If passed as law it would:

  • Prevent municipalities from banning short-term rentals outright
  • Remove most regulations that unfairly discriminate against owners of short-term rental property
  • Allow regulations for noise, traffic, advertising and other nuisances
  • Allow inspections aimed at protecting public health and safety
  • Allow cities to ban short-term rentals if more than 30% of residential units are rentals
  • Allow cities to ban people or businesses from owning more than two short-term rentals

Banning/Limiting STRs in an area have several negative effects which are rarely mentioned by local officials intent on their own power or fund balance.  Among these effects are suppressing home values, making it more expensive for tourists/citizens to vacation, cutting down on tourism, and limiting the private property rights of homeowners who want to rent out their property as they see fit.  All these effects would affect Ludington negatively.

The latter effect is inarguable and totally refutes Tykoski's assertion that people's rights would be violated in a HB 4722 world-- their rights are actually expanded by disallowing local governments to control what one wants to do with their residential property.  Ingrained local officials, deaf to the rights of their constituents and often dumb to the mechanics of free enterprise, fail to see that the law of supply and demand in housing will establish an equilibrium over time, and do it in a much better way than government controls ever will.

Local Ludington officials, led by everyone on the city council, have shown that their own corporate greed is their main motivation in regulating STRs in the city.  HB 4722 does not allow Ludington's City Hall to extort loads of money from homeowners that wish to offer a STR on their property, but if one currently is among the 30 who have established a STR, the fee schedule for starting a STR in Ludington is $2100 minimally (a $500 application fee, a $1500 licensing fee, and a $100 inspection).  If ownership transfers and the new owner wants to continue the STR they must come up with their own $2100.  

This is the proverbial gold mine for city hall, they have not done anything over the last two years other than paperwork of their own creation and some perfunctory site inspections (from the 11-4-21 B&L Committee notes:  "Staff stated they have not had any issues (with STRs) and have not received any complaints other than one about garbage being put out too early.") to justify why they have brought in, minimally $63,000 ($2100 X 30). 

Even if we assign value to the inspection, the City of Ludington has never tried to justify what the other $60,000 is used for; it is not user fees, it is unfair and illegal taxes on those who own STR, a disincentive to start a new business up.  Why would empathetic city officials pass these onerous taxes onto those people wishing to use their property as they see fit, and for a state-acknowledged residential purpose?  They wouldn't, but these city officials are far from empathetic or sympathetic to their constituents, just pathetic.

When this country was founded, the last amendment on the Bill of Rights, the tenth, said:  

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

There is no mention of local city, township, or county governmental power in the Constitution and its amendments; the powers they receive are strictly from the state they are in, or directly from the people in the municipality when they set up the charters.  So let's start asking uneasy questions to these city officials who would use illegal power to illegally take over $100,000 from its own citizens for licensing 50 rental properties, and lobby against a state trying to protect its citizens from such barbarous practices.

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Well done X. This is the kind of subject that most people want to hide from because it can end up being a sticky wicket. One has to wonder exactly, where and when  do the citizens rights to control what they do with their property come into play. This is the kind of situation that involves almost every citizen, not because of the impending legislation but because of the broader question  dealing with the Constitution on just how much control does a citizen really have over their own property? On one hand we have the State and on the other hand we have local Government, both claim to represent the voters but we all know in most cases it's the politicians who profit the most. The City's position would probably be more palatable if they were not trying to extort large amounts of cash from property owners. This alone makes their intentions questionable.  So, again, the poor taxpayer gets stuck in the middle.

Indubitably, whenever the local government tries to regulate local businesses through extortive means it will always end up badly, regardless of city hall's stated intentions or proven findings.  As our national and our state governments trend towards government expansion, don't expect local government to buck the trend unless citizens rise up and say enough is enough.  If Covid has taught us anything, it's taught us not to trust the government in anything, we must verify and offer real alternatives to their often-inane and falsely-idealistic policies.

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