Detroit Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Detroit, Michigan?

Operating a short-term rental business in Detroit, Michigan requires navigating a complex web of regulations and requirements set forth by the city. The key first step for hosts is obtaining a short-term rental license from the Buildings, Safety Engineering, and Environmental Department (BSEED). This annual license comes with a $500 price tag and is essential for legally renting out a property on platforms like Airbnb or VRBO.

Beyond the licensing mandate, Detroit hosts must also ensure their rental properties comply with the city's zoning ordinances. This may involve securing additional permits and undergoing regular safety inspections to verify the home meets health and safety standards for guests. Failure to satisfy these zoning and inspection requirements can put a host at risk of fines or other penalties.

In addition to licensing and zoning rules, Detroit short-term rental operators face restrictions on the frequency and occupancy of their rentals. The city limits hosts to no more than 90 total rental days per year, and no more than 10 people are allowed in a rental property at a time. These regulations aim to balance the benefits of short-term rentals with concerns from local residents and neighborhoods.

Taxes are another critical consideration for Detroit Airbnb and VRBO hosts. Rental income is subject to the city's 6% Accommodations Tax as well as the state's 6% Sales Tax. Hosts must be diligent about collecting and remitting these taxes to avoid potential penalties.Based on reports, Detroit appears to take a relatively strict approach to enforcing its short-term rental rules. The city has prosecuted some homeowners for operating unauthorized rentals, suggesting it is not as Airbnb-friendly as other markets. However, a "black market" of sorts has emerged, with some hosts continuing to rent out their properties through less formal channels like social media.

Overall, the regulatory landscape for short-term rentals in Detroit is complex, with hosts needing to navigate licensing, zoning, tax, and occupancy requirements to operate legally. While some have found success in working within the system, others have expressed frustration with the constraints, citing the rules as a deterrent to profitability. Staying up-to-date on any changes to Detroit's short-term rental policies is crucial for hosts looking to establish a compliant and sustainable vacation rental business in the city.

Starting a Short Term Rental Business in Detroit

Operating a short-term rental business in Detroit requires navigating a complex regulatory landscape set forth by the city. Hosts must ensure compliance with a variety of rules and requirements, including zoning codes, licensing procedures, tax obligations, and safety standards. Understanding and adhering to these regulations is crucial for establishing a successful and sustainable short-term rental operation in Detroit.

The city of Detroit has implemented a comprehensive framework to govern the short-term rental industry, aiming to balance the benefits of this emerging market with the concerns of local residents and neighborhoods. Prospective hosts must familiarize themselves with the specific regulations and take the necessary steps to legally operate their short-term rental properties within the city limits.

Short Term Rental Licensing Requirement in Detroit

One of the primary requirements for operating a short-term rental in Detroit is obtaining a short-term rental license from the Buildings, Safety Engineering, and Environmental Department (BSEED). This license serves as the foundation for legal short-term rental activities and must be renewed annually at a cost of $500.

Failure to obtain the required license can result in significant fines or even legal action by the city, making it essential for hosts to comply with this regulation.

The licensing process involves submitting an application, providing relevant property information, and demonstrating compliance with zoning and safety requirements. BSEED may also conduct inspections to ensure that the property meets the necessary standards for short-term rental use. Hosts must maintain their license in good standing throughout the duration of their short-term rental operations.

Required Documents for Detroit Short Term Rentals

In addition to the short-term rental license, hosts in Detroit must also comply with zoning ordinances and obtain any necessary permits for their properties. Zoning regulations dictate the specific areas within the city where short-term rentals are permitted, as well as the criteria that properties must meet to be eligible for this use. Hosts may be required to obtain permits related to building, fire safety, or other relevant aspects of their rental properties.

Maintaining the necessary documentation and ensuring that properties adhere to zoning requirements is crucial for hosts to avoid potential legal issues or fines. Regular safety inspections may also be conducted to verify that rental properties meet health and safety standards for guests.

Detroit Short Term Rental Taxes

Hosts operating short-term rentals in Detroit are responsible for collecting and remitting various taxes related to their rental income. This includes the city's 6% Accommodations Tax, which is levied on the total rental revenue generated by the property. Additionally, hosts must collect and pay the state's 6% Sales Tax on the rental charges.

Accurately calculating, collecting, and remitting these taxes is essential for hosts to maintain compliance with Detroit's tax regulations. Failure to comply with tax obligations can result in penalties, interest charges, and potential legal consequences. Hosts should familiarize themselves with the tax reporting and payment requirements to ensure they are meeting their financial responsibilities.

Detroit-wide Short Term Rental Rules

Beyond the licensing and tax requirements, Detroit has implemented several city-wide regulations that govern the operation of short-term rentals. These rules include restrictions on the number of days a property can be rented out per year, with a limit of 90 total rental days annually. Additionally, there are occupancy limitations in place, with a maximum of 10 people allowed in a rental property at any given time.

These regulations aim to strike a balance between the benefits of short-term rentals and the concerns of local residents and neighborhoods. By imposing limits on rental frequency and occupancy, the city seeks to mitigate potential issues such as noise, overcrowding, and the impact on the local housing market.

Hosts must be aware of and adhere to these city-wide rules to ensure the legality and sustainability of their short-term rental operations. Failure to comply with these regulations can result in fines, legal action, or the revocation of the host's short-term rental license.

Does Detroit Strictly Enforce STR Rules? Is Detroit Airbnb Friendly?

Detroit has demonstrated a relatively strict approach to enforcing its short-term rental regulations. The city has taken legal action against homeowners found to be operating unauthorized short-term rentals, underscoring the importance of compliance. Some neighborhoods within Detroit have even effectively banned short-term rentals altogether, further limiting the potential for Airbnb-style operations in these areas.

This regulatory environment suggests that Detroit is not particularly Airbnb-friendly compared to other cities that have embraced the short-term rental market. The combination of licensing requirements, tax obligations, and strict enforcement measures can create significant barriers for hosts looking to operate in the Detroit market.

However, despite the city's efforts to regulate the short-term rental industry, some hosts continue to operate outside the formal channels. These hosts may utilize alternative platforms, such as social media or classified ads, to advertise and manage their short-term rental properties. This has led to concerns about a potential "black market" for short-term rentals in Detroit, where some hosts are able to circumvent the city's regulations.

How to Start a Short Term Rental Business in Detroit

For those interested in starting a short-term rental business in Detroit, the process involves several key steps:

• Obtain a short-term rental license from the Buildings, Safety Engineering, and Environmental Department (BSEED). This includes submitting an application, providing property details, and demonstrating compliance with zoning and safety requirements.
• Ensure that the property meets all applicable zoning regulations for short-term rental use. This may involve obtaining additional permits or making necessary modifications to the property.
• Conduct regular safety inspections to verify that the rental property meets health and safety standards for guests. Be prepared to address any issues identified during these inspections.
• Collect and remit the required taxes, including the 6% Accommodations Tax and the 6% Sales Tax, on all rental income generated.
• Adhere to the city's regulations on rental frequency, limiting the property to no more than 90 total rental days per year, and occupancy, with a maximum of 10 people allowed in the rental at any given time.
• Stay informed about any changes or updates to Detroit's short-term rental regulations to ensure ongoing compliance.

Navigating the regulatory landscape in Detroit can be complex, but following these steps can help hosts establish a compliant and sustainable short-term rental business within the city.

Who to Contact in Detroit About Short Term Rental Regulations and Zoning?

For inquiries or assistance regarding short-term rental regulations and zoning in Detroit, hosts can reach out to the Buildings, Safety Engineering, and Environmental Department (BSEED). This department is responsible for overseeing the short-term rental licensing process and can provide guidance on compliance requirements.

Hosts can contact BSEED by phone at (313) 224-2733 or by email at bseed@detroitmi.gov. The department's staff can offer information on the specific regulations, application procedures, and any updates or changes to the city's short-term rental policies.

Additionally, the city's website (detroitmi.gov) may provide further resources and contact information for relevant departments and agencies involved in the oversight of short-term rentals in Detroit.

What do Airbnb Hosts in Detroit on Reddit and Bigger Pockets Think About Local Regulations?

Discussions on real estate forums like Bigger Pockets and Reddit have provided insights into the perspectives of Airbnb hosts operating in Detroit. Some hosts have expressed frustration with the city's strict regulations, particularly the 90-day rental limit and occupancy restrictions, which they view as challenging constraints on their business operations.

Hosts have also highlighted the compliance requirements and potential fines as deterrents to profitability in the Detroit short-term rental market. The need to obtain a license, meet zoning requirements, and ensure proper tax remittance can add significant administrative and financial burdens, making it more difficult for hosts to generate a sustainable income from their rental properties.

However, not all Airbnb hosts in Detroit have had negative experiences. Some have reported successfully navigating the licensing and zoning requirements, indicating that it is possible to operate a compliant short-term rental business in the city. These hosts may have found ways to work within the regulatory framework or have properties that are well-suited to the city's rules.

Overall, the sentiment among Detroit Airbnb hosts appears to be a mix of cautious optimism and frustration. While many acknowledge the need for regulation to address community concerns, they also express concerns about the impact of the rules on their businesses and the potential for a thriving short-term rental market in the city. The ongoing dialogue on forums like Bigger Pockets and Reddit suggests that the short-term rental landscape in Detroit remains a topic of active discussion and debate among local hosts.

Disclaimer: While we here at BNBCalc strive to keep all of our city 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 city 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.