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Wayne County, Michigan Short-Term Rental Regulation: A Guide For Airbnb Hosts

Wayne County, Michigan

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Starting a Short-Term Rental Business in Wayne County

Wayne County, which includes the city of Detroit, does not appear to have county-wide regulations specifically governing short-term rentals like those listed on Airbnb and VRBO. However, some cities within Wayne County have implemented their own rules and restrictions:

  • In Detroit, short-term rentals may not be rented out for more than 90 days per calendar year. This limits the ability to operate STRs full-time in residential areas of the city.
  • The city of Wayne recently began cracking down on short-term rentals, with reports of $1,200 fines being issued to Airbnb hosts, even those with no guest complaints or issues. One host said "Someone came to my door and taped a citation with a $1200 fine/misdemeanor on my window. I'm very shocked. There are other airbnb around my neighborhood and they have been flourishing."
  • Other jurisdictions in Michigan, while not in Wayne County, provide examples of the types of regulations hosts may encounter. For instance, Grand Rapids requires all STR operators to obtain a license, with a limit of 200 licenses issued per year. Charlevoix County and Ann Arbor also have licensing requirements for STRs.

Before listing a short-term rental in Wayne County or anywhere in Michigan, it's critical to research the specific regulations of your local municipality. Zoning laws, permitting requirements, licensing, and restrictions on rental days can vary significantly from city to city.

Consulting with local officials, joining Michigan-focused real estate investing groups, and connecting with other experienced STR hosts in your area can provide valuable guidance. Online forums like Bigger Pockets and the Airbnb Community are also helpful resources for navigating the regulatory landscape.

While Wayne County itself may not have blanket STR ordinances, the rules implemented by individual cities can have a major impact on a host's ability to operate a successful short-term rental business. Careful due diligence on local regulations is essential to avoid fines and legal issues down the road.

Short-Term Rental Licensing Requirement in Wayne County

Based on my research, Wayne County itself does not appear to have a specific licensing requirement or process for short-term rentals at the county level. Regulations and enforcement are primarily handled by the individual cities and townships within the county.

However, many municipalities in Wayne County do have their own ordinances governing short-term rentals that may include licensing, registration, or permitting requirements. For example:

  1. The city of Detroit requires all short-term rental operators to obtain a license from the Buildings, Safety Engineering, and Environmental Department (BSEED). The annual license costs $500 and is essential for legally renting out a property on platforms like Airbnb or VRBO. Failure to obtain the required license can result in significant fines or legal action by the city.
  2. The city of Wayne recently began cracking down on short-term rentals, with reports of $1,200 fines being issued to Airbnb hosts, even those with no guest complaints or issues. One host said "Someone came to my door and taped a citation with a $1200 fine / misdemeanor on my window. I'm very shocked. There are other air bnb around my neighborhood and they have been flourishing."

While each city may have its own specific requirements, the licensing or registration process typically involves submitting an application, providing relevant property information, and demonstrating compliance with zoning and safety requirements. Fees can range from a few hundred to over a thousand dollars annually. Processing times vary but may take several weeks or months.

Penalties for operating without the proper license or permit can be steep. In Detroit, fines can be up to $1,000 per violation for owners. Other cities like Wayne have issued fines of $1,200 or more. Continued non-compliance could potentially lead to misdemeanor charges in some jurisdictions.

Before listing a short-term rental anywhere in Wayne County, it's critical that hosts research the specific regulations of their local city, village, or township. Requirements and enforcement can vary significantly from one community to the next. Consulting with local officials and reviewing municipal codes is essential to ensure compliance and avoid costly penalties down the road.

Required Documents for Wayne County Short-Term Rentals

While Wayne County itself does not have specific documentation requirements for short-term rentals, the city of Detroit, which is located within Wayne County, has several key documents that hosts must obtain to legally operate an STR:

  1. Short-Term Rental License: This license, issued by the Buildings, Safety Engineering, and Environmental Department (BSEED), is the cornerstone of legal STR operation in Detroit. The annual license costs $500 and is essential for renting out a property on platforms like Airbnb or VRBO. To obtain the license, hosts must submit an application, provide property details, and demonstrate compliance with zoning and safety requirements.
  2. Zoning Permits: In addition to the STR license, hosts must also comply with Detroit's zoning ordinances and obtain any necessary permits for their properties. Zoning regulations dictate where in the city STRs are allowed and what criteria properties must meet. Hosts may need to secure permits related to building, fire safety, or other relevant aspects of their rental.
  3. Tax Registration: Detroit STR operators are required to collect and remit the 6% Accommodations Tax and the 6% Sales Tax on all rental income generated. Hosts must register with the appropriate tax authorities and maintain detailed records of their rental transactions.
  4. Insurance Documentation: Although not explicitly required by Detroit ordinances, it is highly recommended that STR hosts maintain robust liability insurance coverage. Many hosting platforms like Airbnb provide some level of protection, but additional short-term rental insurance can help safeguard hosts from potential legal issues.

To obtain the necessary licenses and permits, hosts can contact the Buildings, Safety Engineering, and Environmental Department (BSEED) by phone at (313) 224-2733 or by email at bseed@detroitmi.gov. The department's staff can provide guidance on the specific application procedures and requirements.

It's important to note that STR regulations can vary significantly among the cities and townships within Wayne County. Hosts should always research the specific rules of their local jurisdiction to ensure full compliance and avoid potential fines or legal consequences.

Wayne County Short-Term Rental Taxes

Short-term rental operators in Wayne County need to be aware of several types of taxes that apply to their rental income:

State Use Tax (6%): Michigan imposes a 6% use tax on short-term rentals of 30 days or less. This tax applies to the total rental charge, including cleaning fees. STR hosts are responsible for collecting this tax from guests and remitting it to the state.

State Income Tax (4.25%): Rental income earned from short-term rentals is subject to Michigan's state income tax, which has a flat rate of 4.25%. This income must be reported on your Michigan income tax return.

County and City Taxes: Some cities within Wayne County, like Detroit, impose their own taxes on short-term rentals. Detroit has a 6% Accommodations Tax that STR hosts must collect from guests in addition to the state use tax. Check with your local municipality for any city-specific taxes.

Federal Income Tax: Short-term rental income is also subject to federal income tax. The amount you'll owe depends on your total taxable income and filing status. STR income and expenses are reported on Schedule E of your federal return.

It's important to note that even if you don't have any rental income during a particular filing period, you're still required to file "zero dollar" returns with the state and local tax authorities to remain in good standing.

Deductions and Write-Offs

STR operators can deduct many of the expenses related to running their rental business:

  1. Cleaning and maintenance costs
  2. Supplies for guests (toiletries, coffee, etc.)
  3. Advertising and platform fees (Airbnb, VRBO, etc.)
  4. Utilities (if paid by the host)
  5. Depreciation on the rental property
  6. Mortgage interest and property taxes (must be allocated based on rental vs. personal use)

If you rent out a portion of your primary residence, expenses must be divided based on the percentage of the home used for rental purposes. Consult with a tax professional to ensure you're claiming all the deductions you're entitled to and reporting your rental income correctly.

By understanding the tax obligations of running a short-term rental and taking advantage of available deductions, hosts in Wayne County can stay compliant and maximize their profits. Careful record-keeping and professional tax advice are essential for success in this rapidly growing industry.

Michigan Wide Short-Term Rental Rules

While much of the regulation of short-term rentals in Michigan happens at the local level, there have been several attempts in recent years to establish statewide rules that would impact hosts in Wayne County and across the state:

House Bill 4722 (2021): This controversial bill, which passed the Michigan House in October 2021, would amend the Michigan Zoning Enabling Act to establish short-term rentals as a permitted residential use in all zoning districts. If enacted, HB 4722 would significantly limit the ability of local governments to regulate or restrict STRs through zoning. The bill is currently awaiting a vote in the Michigan Senate, which is expected to occur during the upcoming lame-duck session in late 2022.

Senate Bill 446 (2021): Similar to HB 4722, this bill would prohibit local governments from banning short-term rentals through zoning laws. However, it would still allow for some local regulations related to noise, advertising, traffic, and other conditions that apply to all residential properties. SB 446 was introduced in May 2021 but has not advanced beyond the Senate Regulatory Reform Committee.

House Bills 5437-5446 (2024): This package of bills, introduced by House Democrats in April 2024, would establish a statewide regulatory framework for short-term rentals. Key provisions include:

  1. A new 6% excise tax on STR stays, on top of the existing 6% use tax
  2. A requirement for STR hosts to maintain $1 million in liability insurance
  3. Safety requirements like fire extinguishers, smoke alarms, and emergency contact information
  4. An annual $100 per listing fee for platforms like Airbnb and Vrbo, capped at $50,000
  5. Allowing local governments to limit the number of STRs and enforce zoning
  6. Creating a statewide STR database and requiring annual certification

These bills are supported by some local officials in tourism-heavy communities who want more tools to offset the costs of STRs. However, they are opposed by the Michigan Realtors association, which argues the regulations are too burdensome on hosts.

While none of these statewide proposals have been enacted yet, the ongoing legislative battles demonstrate the complex landscape that Michigan STR hosts must navigate. Even without state laws, hosts in Wayne County and beyond must carefully research and comply with the specific ordinances of their local city or township to avoid fines and legal issues. Monitoring both local and state-level developments is critical for any Michigan resident considering starting a short-term rental business.

Does Wayne County Strictly Enforce STR Rules?

Based on discussions among hosts and investors on forums like Reddit and BiggerPockets, it appears that Wayne County, and particularly the city of Detroit, is not very friendly towards short-term rentals compared to other major cities.

In 2018, there were reports that Detroit had effectively "banned Airbnb without anyone knowing it" by quietly passing restrictive ordinances. The city requires all short-term rental operators to obtain a $500 annual license and limits rentals to 90 days per year, making it difficult to run STRs profitably. Hosts have reported receiving $1,200 fines and misdemeanor citations, even those with no guest complaints.

While some hosts continue to operate STRs in Detroit despite the rules, many caution that it's not worth the risk. One Redditor advised a prospective host to "read the host subreddit" for cautionary tales before considering Airbnb in Detroit. Others expressed strong anti-STR sentiments, urging hosts not to "contribute further to gentrification in this city."

That said, a few hosts reported success with careful guest screening and focusing on areas closer to downtown. One host near the Schoolcraft/Wyoming area averaged $2,300-$2,800 per month, though increasing competition has slowed bookings.

Overall, the consensus among experienced investors is that Wayne County and Detroit are not particularly Airbnb-friendly. Strict enforcement, expensive licensing, and 90-day annual caps make it challenging to operate legally and profitably compared to STR-friendly cities. While some hosts fly under the radar, most agree it's a risky proposition in this jurisdiction. Prospective hosts are advised to thoroughly research the many local restrictions before considering short-term rentals in Wayne County.

How to Start a Short-Term Rental Business in Wayne County

Starting a short-term rental business in Wayne County requires careful planning and compliance with local regulations. Here are the key steps to get started:

  1. Research local regulations: Before investing in a property, thoroughly research the short-term rental regulations in your specific city or township within Wayne County. Rules can vary significantly by jurisdiction, with some areas like Detroit having strict licensing requirements and rental day limits. Connect with your local zoning department and review ordinances to ensure your property is eligible for STR use.
  2. Develop a business plan: Craft a detailed business plan that outlines your target market, pricing strategy, marketing approach, and financial projections. Consider factors like location, amenities, and local competition when setting rates. Budget for expenses like furnishings, cleaning, maintenance, and insurance.
  3. Choose a business structure: Consult with a tax professional or attorney to determine the best legal structure for your STR business (sole proprietorship, LLC, etc.). Register your business with the state and obtain an Employer Identification Number (EIN) from the IRS.
  4. Obtain necessary licenses and permits: Apply for all required licenses and permits before listing your property. In Detroit, this includes a $500 annual STR license from the Buildings, Safety Engineering, and Environmental Department (BSEED). You may also need zoning permits, a certificate of occupancy, and a business license.
  5. Register for tax collection: STR operators in Wayne County must collect and remit state use tax (6%), state income tax (4.25%), and potentially local taxes like Detroit's 6% Accommodations Tax. Register with the appropriate agencies and set up processes to collect and file taxes regularly.
  6. Prepare your property: Furnish and equip your rental to appeal to your target guests. Invest in quality furniture, linens, and amenities. Ensure the space is clean, safe, and well-maintained. Consider hiring a professional photographer to showcase your property in its best light.
  7. Create a listing: List your property on popular STR platforms like Airbnb and VRBO. Craft an engaging description, use high-quality photos, and set competitive rates. Be transparent about your location, amenities, and house rules.
  8. Automate and optimize: Utilize technology tools to streamline your operations. Smart locks, noise monitoring systems, and automated messaging can simplify management and improve the guest experience. Continuously gather data on your bookings, revenue, and reviews to identify areas for optimization.
  9. Prioritize guest satisfaction: Provide exceptional customer service to earn positive reviews and repeat bookings. Be responsive to inquiries, offer local recommendations, and promptly address any issues that arise. Go above and beyond to create a memorable experience for your guests.
  10. Stay informed and adaptable: Regularly monitor changes in local STR regulations and platform policies. Join local host communities and industry groups to stay informed and share best practices. Be prepared to adapt your business strategy as market conditions evolve.

By following these steps and prioritizing compliance, hospitality, and data-driven decision making, you can build a successful short-term rental business in Wayne County. While strict regulations in some areas can present challenges, a well-run STR can be a profitable venture in this dynamic market.

Who to Contact in Wayne County about Short-Term Rental Regulations and Zoning?

To get the most accurate and up-to-date information on short-term rental regulations in Wayne County, it's best to contact your local city or township directly. Rules can vary significantly from one jurisdiction to the next.

For example, in the city of Detroit, the Buildings, Safety Engineering, and Environmental Department (BSEED) handles STR licensing and enforcement. You can contact BSEED by phone at (313) 224-2733 or by email at bseed@detroitmi.gov.

In other cities like Wayne, the Community Development/Planning Department oversees zoning and permitting. Key contacts include:

  1. Lori Gouin, Community Development/Planning Director (for site plans, zoning, and general inquiries)
    Phone: (734) 722-2000
    Email: lgouin@cityofwayne.com
  2. Kirk Malcomson, Building and Engineering Assistant Director (for permits, business inspections, and engineering)
    Phone: (734) 722-2000

At the county level, there is no single department that handles STRs. Instead, hosts will need to navigate the specific departments and contacts for their city or township.

For general inquiries, the Wayne County Executive's Office can be reached at (313) 224-0286. The county's main website at waynecounty.com also provides a directory of departments and elected offices.

In addition to official contacts, connecting with other local hosts and property managers can provide valuable guidance. Some helpful online communities include:

  1. The Detroit Airbnb Host Club on Facebook (2,500+ members)
  2. The Detroit & Ann Arbor Airbnb Hosts group on Facebook (1,300+ members)
  3. The Detroit Area Short Term Rentals forum on BiggerPockets
  4. The Michigan-focused discussions on the AirHostsForum

These groups allow hosts to ask questions, share experiences, and stay updated on the evolving regulatory landscape. With rules varying so much by location, insights from fellow hosts are often essential for navigating STR challenges in Wayne County.

Ultimately, the most important contacts for STR operators will be in their specific city or township offices that handle planning, zoning, permitting, and enforcement. Establishing positive relationships with these local officials - and staying connected with the host community - is key to long-term success in Wayne County's dynamic short-term rental market.

What Do Airbnb Hosts in Wayne County on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in local forums and online communities, it appears that many Airbnb hosts in Wayne County have concerns and frustrations with the strict regulations, particularly in the city of Detroit. Here are a few examples of what hosts are saying:

In a 2018 thread on the r/Detroit subreddit titled "Detroit just banned Airbnb without anyone knowing it", several hosts expressed shock and disappointment at the city's restrictive ordinances. One commenter noted "For Detroit though? Why? We really need an explanation from the city. 50% of people are simply sharing a room and we don't get enough tourists to the point where people would buy up houses and condos just to rent out to short-term rentals like Airbnb guests."

A 2019 post on r/Detroit urged fellow hosts to fight back against proposed regulations, claiming "If these regulations pass, it would make running an AirBnB in Detroit almost impossible." The post argued the laws unfairly benefited corporate hotel chains at the expense of local hosts and small businesses.

On the BiggerPockets forums, a Maryland-based investor looking to purchase a short-term rental in Oakland or Wayne County was advised by commenters to carefully research local regulations. One reply cautioned "Before investing in the Detroit area I would look very closely at the local STR rules. The city of Detroit has some of the most restrictive STR rules in the country."

In a post on the Detroit Area Short Term Rentals forum on BiggerPockets, a host shared their experience of being fined $1,200 for operating without a license. "I'm very shocked," they wrote. "There are other airbnb around my neighborhood and they have been flourishing." Commenters sympathized and discussed the difficulties of complying with Detroit's licensing process and 90-day annual rental limit.

Overall, the sentiment among many Wayne County hosts seems to be that while some regulation is necessary, the current rules in Detroit and other cities are overly burdensome. Hosts argue these restrictions stifle local entrepreneurs, limit income opportunities, and drive tourism dollars to big hotel chains instead of the local economy.

However, there are also those who believe STRs have negative impacts on housing affordability and neighborhood character that need to be addressed through regulation. With Michigan lawmakers considering statewide rules as well, the debate over how to effectively regulate short-term rentals in Wayne County is likely to continue.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.

⚡️
Reveal your property’s rental profitability

Buy this property and list it on Airbnb.