8/12/24 STR Worksession Recap

At the 8/12/24 City Commission Worksession staff brought a drafted short-term rental (STR) zoning ordinance update for discussion. The drafted ordinance update would:

• Create a STR Overlay District that allows a certain number of STR certificates in each zone.
  • The zones were created based on census tracts (you can see a map of the zones below).
  • The overlay district would limit the number of short-term rentals in each zone to 4% of the housing stock. Studies have shown negative impacts to neighborhoods when STRs increase to over 5% of the housing stock.
• Enforce that no property can have more than two STRs abutting it.
  • Does not apply to commercial buildings.
• Continue the process of STR licenses being non-transferable.
• Provide a 30-day grace period for STR application renewal filing following the expiration with financial penalty (similar to renewing license plate tabs).

Commission Questions:

• Can we allow unlimited STRs in business/commercial districts? Acknowledging that there is a large opportunity in the downtown area, but the Lakeside area is already over the STR limit.
• If a zone has maxed out their STR allowance, but a STR license becomes available. How would we decide who receives the license? Lottery system, first-come first-served?
• Is there a way to allow STR licenses to be transferable to family members? Example- My father passed away and has run these STRs for x years, now I plan to continue to run them. With this new limited number of STRs there is potential the new family member would not be guaranteed the license.

Next Steps:
Staff will bring a resolution to extend the STR moratorium by 30 days and an updated timeline to the August 27, 2024, Commission Meeting. The extension would have the moratorium expire on October 8, 2024.

Review the Connect Muskegon project page here.