Farmington Hills Short Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short Term Rental Business in Farmington Hills

Farmington Hills, Michigan has specific regulations regarding short-term rentals (STRs) like Airbnb and VRBO. In September 2023, the Farmington Hills City Council voted 4-1 to significantly limit STRs in the city, especially in residential neighborhoods24.

The new ordinance bans non-owner occupied STRs in single-family residential zoning districts, with some exceptions for existing STRs that were properly registered with the city prior to the ordinance taking effect. This means an investor cannot purchase a home in a neighborhood zoned for single-family residential use and rent it out on a short-term basis unless the owner lives on-site during the rental period214.

Owner-occupied STRs, where the owner makes their permanent residence at the property, are still permitted but require registration, inspection, and adherence to various rules on occupancy limits, parking, noise, and more14.

Existing non-owner occupied STRs that were registered before September 2023 are allowed to continue operating for a 5-year amortization period. After that grace period ends, they must convert to owner-occupied rentals or cease operations14.

The ordinance reflects a nationwide trend of municipalities cracking down on STRs in residential areas due to concerns over issues like noise, traffic, parking problems, and the commercialization of neighborhoods. Farmington Hills officials cited a desire to protect the residential character of communities as a key driver behind the new rules24.

Prior to September 2023, the city required all STRs to register and pass inspections every 3 years, but did not outright prohibit non-owner occupied rentals in residential zones11. The new ordinance significantly tightens restrictions as the STR industry has rapidly expanded.

Short Term Rental Licensing Requirement in Farmington Hills

Under the ordinance passed in September 2023, non-owner occupied STRs are prohibited in most residential zoning districts in Farmington Hills. The only exceptions are for existing non-owner occupied rentals that were properly registered with the city before the new rules took effect214.

These grandfathered non-owner occupied STRs can continue operating for a 5-year period, but after that must either convert to owner-occupied rentals with the owner living on-site, or cease operations altogether14.

For owner-occupied STRs, which are still allowed in residential areas, the property owner must register the rental with the city and pass an inspection. Key requirements include111418:

• Completed rental registration application
• Proof of ownership
• Proof that the owner makes the property their permanent residence
• Passing a city rental inspection covering fire safety, building code, etc.

The city's rental inspection program applies to all rental properties, not just STRs. Inspections focus on life safety issues like fire protection, building safety, sanitation, and proper facilities. They are required at least once every 3 years11.

Properly registered STRs receive a certificate of compliance that is valid for up to 3 years. Renewing this certificate requires passing another inspection18.

Failure to register an owner-occupied STR or allowing an un-registered non-owner occupied rental can result in fines and legal action, as the new ordinance gives teeth to the city's enforcement efforts14.

Required Documents for Farmington Hills Short Term Rentals

To legally operate a short-term rental in Farmington Hills under the new rules that took effect in September 2023, hosts must submit the following documentation to register their property1118:

• Completed rental registration application form
• Proof of ownership of the property (deed or other documentation)
• For owner-occupied STRs, proof that the owner makes the property their permanent residence (e.g. driver's license, utility bills, etc.)

The rental registration application requires providing:

• Name, address, and contact information for the property owner
• Name, address, and contact information for any authorized managing agent
• Driver's license number or state ID number for each owner and agent listed
• After submitting the application and documentation, the owner must schedule and pass a city rental inspection before receiving a certificate of compliance to operate the STR.

The rental inspection checklist covers a range of interior and exterior elements related to safety, building codes, and proper facilities, including11:

• Smoke and carbon monoxide detectors
• Handrails and guards
• Emergency egress (exits)
• Electrical hazards
• Plumbing and mechanical systems
• Evidence of pest/insect infestation
• Structural issues like roof leaks
• Adequate trash disposal

If any violations are found during the inspection, the owner must correct them before a certificate can be issued. This certificate allows operation of the STR but only remains valid for up to 3 years before another inspection is required18.

Providing false information on the rental registration application can result in fines and revocation of the rental certificate. Owners must also update the city if any information like ownership or management contact details change11.

Properly completing this registration process and maintaining a valid certificate is crucial, as the new ordinance gives Farmington Hills strict enforcement authority over un-registered STR operations.

Farmington Hills Short Term Rental Taxes

In addition to the city's registration and inspection requirements, short-term rental operators in Farmington Hills are responsible for collecting and remitting taxes on the rental income.

The main taxes include810:

• Michigan Use Tax: 6% of the total rental charge
  This statewide 6% tax applies to all rentals of accommodations for less than 30 consecutive days. Hosts must register with the Michigan Department of Treasury to obtain a sales tax license and pay this use tax.
• Oakland County Accommodations Tax: 5% of the total rental charge
  All hotels, motels, B&Bs, and short-term rentals in Oakland County, where Farmington Hills is located, must collect this 5% tax. Operators need to submit an application to the Oakland County Treasurer's office.

Failure to properly collect and remit these taxes can result in penalties, fines, and potential legal issues. Hosts should consult a tax professional to ensure full compliance with all tax obligations related to their short-term rental8.

These taxes are separate from any potential income taxes hosts need to pay on the rental revenue. The use and accommodations taxes are charged to the guest and the host is responsible for collecting them and remitting them to the proper authorities.

Farmington Hills wide Short Term Rental Rules

Beyond the registration, inspection, and tax requirements, Farmington Hills' new ordinance imposes several other regulations that short-term rental operators must follow214:

Non-Owner Occupied Rentals:

• Banned in all residential zoning districts (with a 5-year amortization period for existing registered rentals)

Owner-Occupied Rentals:

• The owner must use the property as their permanent residence
• Maximum occupancy limits based on number of bedrooms
• Minimum off-street parking requirements
• Must comply with city's noise ordinance
• Must comply with property maintenance standards
• Designation of local contact if owner away during rental

The rules aim to reduce the impact of STRs on residential neighborhoods and ensure they operate more like traditional home rentals when the owner is present.

Violating any of these regulations can result in fines, revocation of the rental certificate, and potential legal action. The city seems committed to preserving neighborhood character and quality of life after hearing concerns from residents24.

Does Farmington Hills strictly enforce STR rules?

Based on the city council's decisive 4-1 vote to pass the new short-term rental ordinance in September 2023, Farmington Hills appears to be taking a strict stance on restricting non-owner occupied rentals in residential areas24.

The ordinance's outright ban on investor-owned STRs in neighborhoods, with just a 5-year amortization period for existing registered rentals, shows the city prioritized addressing resident concerns over investor interests.

Compared to some other municipalities that have been more hands-off in regulating STRs, Farmington Hills has clearly staked out a less friendly approach to allow unfettered operations, especially of non-owner occupied rentals in residential zones.

On online forums like Bigger Pockets and Reddit, the ordinance sparked debate between STR hosts who felt the city went too far in restricting property rights, and residents who supported reining in rental businesses in their neighborhoods14.

However, the ordinance's passage indicates the city sided with preserving residential community character over STR operator desires. The inclusion of potential fines and legal action for violations suggests a willingness to actively enforce the new rules.

Hosts with properly registered and owner-occupied STRs will likely face regular monitoring from the city's building department to ensure compliance with all regulations around occupancy, parking, noise, and other issues that prompted the crackdown.

So while some level of STR activity is still permitted, Farmington Hills has sent a clear signal that it will be strict in restricting non-owner occupied rentals and regulating the impacts of those that do operate legally. The residential nature of neighborhoods appears to be the overriding priority.

How to Start a Short Term Rental Business in Farmington Hills

For those looking to start a legal short-term rental operation in Farmington Hills under the new rules enacted in September 2023, here are the key steps:

1. Determine your property's eligibility

Is it in a zoning district that allows STRs?

Will it be owner-occupied?

If non-owner occupied, was it registered before the ordinance passed?

2. Complete the city's rental registration application and submit required documents proving ownership and residency

3. Schedule and pass a city rental inspection, correcting any noted violations

4. Obtain required liability insurance coverage

5. Register with state and county agencies to collect and remit the 6% Michigan Use Tax and 5% Oakland County Accommodations Tax

6. Understand and adhere to all city STR regulations including occupancy limits, parking requirements, noise rules, etc.

7. Designate a local contact person to respond to any issues if you are out of town during rental periods

8. Set up your STR listing on platforms like Airbnb and VRBO or establish your own website

9. Implement a system to manage bookings, guest communication, cleaning, maintenance, etc.

10. Keep accurate records of rental income and expenses for tax purposes

Thoroughly research the legal requirements and carefully weigh the costs and benefits before starting an STR business to ensure compliance and maximize your chances of success.

Who to contact in Farmington Hills about Short Term Rental Regulations and Zoning?

For any questions about Farmington Hills' short-term rental regulations, registration process, zoning rules, or other requirements, contact:

Farmington Hills Building Division
31555 W. Eleven Mile Road
Farmington Hills, MI 48336
Phone: (248) 871-2450
Email: building@fhgov.com
Website: https://fhgov.com/departments-services/planning-and-community-development/building/rental-inspection

This city department oversees the rental registration program, inspections, and overall enforcement of the STR ordinance. Their staff should be able to provide full details on licensing, documentation needed, the inspection process, and ensuring compliance with all the rules18.

For any zoning questions related to which districts allow short-term rentals or general zoning regulations, you can try contacting the Planning and Community Development department at the same address.

However, the Building Division is likely the best primary point of contact for all STR-related matters in Farmington Hills. As the enforcing authority for the new ordinance, they should have the latest information and be able to comprehensively answer any questions.

What do Airbnb hosts in Farmington Hills on Reddit and Bigger Pockets think about local regulations?

The reaction among short-term rental hosts on online forums like Bigger Pockets and Reddit to Farmington Hills' new ordinance restricting STRs has been quite mixed and sparked vigorous debate.

On one side, some hosts expressed frustration that the city was infringing too much on private property rights with the new rules, especially the ban on non-owner occupied rentals in residential areas. Their key concerns included14:

• Prohibiting investor-owned STRs unfairly limits investment opportunities
• Regulations won't solve issues like noise/parking as those can happen with long-term rentals too
• The rules make it very difficult for owners who want to rent when away for extended periods
• Inspections and licensing fees create an added cost and administrative burden

However, other commenters pushed back on the notion that the city overstepped, arguing14:

• Residential neighborhoods should primarily be for permanent residents, not commercial businesses like STRs
• Investors buying up housing stock and converting properties to STRs reduces affordability
• Owner-occupied rentals are a reasonable compromise to allow some STR activity while mitigating impacts
• Local governments have the authority to regulate land uses and residential zoning

There was also some debate around whether short-term renting inherently violates the "residential" intent of single-family zoning, or if it can be permitted with the right rules in place.

Overall, the ordinance revealed a divide in the STR community between those who feel their entrepreneurial rights are being violated, and those who say some level of regulation is reasonable to protect neighborhood quality of life.

A common sentiment was concern that if Farmington Hills' aggressive stance works, other cities may follow suit and continue ratcheting up restrictions on short-term rentals, especially the non-owner occupied variety.

The key takeaway is that anyone considering an STR in Farmington Hills needs to thoroughly understand and be prepared to work within the new ordinance's framework. While it still allows some opportunities, the city has prioritized reining in investor-owned rentals in residential areas.

Hosts hoping to operate legally will need to follow all the rules around registration, inspections, taxes, and other requirements - and be prepared for regular monitoring and enforcement by the city. Those unwilling to play by Farmington Hills' strict new rules may need to look elsewhere.