To Airbnb, or not to Airbnb? Weighing the pros and cons of short-term rentals in Greater Lansing

When residents of East Lansing’s Glencairn Neighborhood found the house at 921 Sunset Lane listed on Airbnb without a proper city license, they rallied and had it taken down.

The incident was the catalyst for increased discussion about how the city should approach regulating short-term rentals, or properties that are leased through companies as Airbnb and VRBO for up to 30 days. It led to a petition calling for an R-O-1, or rental restriction overlay district, which would prevent any more licenses from being granted to Glencairn homeowners.

Natalie Ryckman, who moved into the house next door in August, said she signed the petition “after much consideration.”

“It’s disappointing that the process doesn’t distinguish between short- and long-term rentals, so you have to go against both even if your issue is just with short-term,” she said. “My hope is that the process will be updated to meet modern needs.”

Ryckman, whose work with domestic violence programs has often included dealing with affordable housing, ultimately decided that the negative impact of short-term rentals outweighed her concern.

“When one person rents through Airbnb, other folks start to see them making money, which creates this domino effect,” she said. “What I’ve seen is that these rentals can take away from the pool of long-term rentals in a community, from families who need affordable, permanent housing.”

One property owner, who asked that his name not be printed, uses Airbnb and VRBO to rent out homes in Lansing, Colorado and Wisconsin. From his perspective, short-term rentals uniquely benefit the local economy.

“The people who stay at my properties all come from out of town. They’ll visit for a week or so, spend gas money, shop at businesses, and eat out for almost every meal. That’s bringing in a lot of money that wouldn’t come in if it wasn’t an Airbnb,” he said.

Of the three cities he hosts in, the Airbnb owner said that “Lansing is probably the easiest place” to operate. He pays around $1,200 per year in extra taxes to the city

“In some places, they’ve really come down hard with restrictions. A lot of people just don’t want to deal with that, so right now I don’t see a lot of new Airbnbs being bought,” he said.

He said he prefers renting his Lansing house to longer-term boarders like traveling nurses but uses Airbnb and VRBO to fill in the gaps. In both cases, across his three rental properties, he said he’s gotten just one complaint, from neighbors in Wisconsin who alleged he was operating his own home illegally for short-term rentals, which he said wasn’t true.

According to AirDNA, an app that uses artificial intelligence to analyze data from Airbnb and VRBO listings, Lansing has 437 active short-term listings and East Lansing has 73. About a quarter of those are private rooms, rather than entire homes. More than half of the guests stay for just one night.

Other communities in Michigan have already taken steps to regulate short-term rentals. In 2021, Ann Arbor banned non-owner-occupied short-term rental properties in residential neighborhoods. Under that regulation, hosts who reside in their home and rent out a single room can continue to do so, but absentee hosts and third-party companies “cannot apply for a short-term rental license under any circumstances.”

Lansing Mayor Andy Schor has publicly advocated for greater autonomy in how municipalities choose to regulate short-term rentals. The only city regulation now is that if an owner who resides elsewhere markets a property for short-term stays, then it must be registered as a rental.

“I’m not opposed to them altogether, but when you have so many that you start taking appropriate affordable housing offline, that’s a problem,” Schor said. “What concerns me is that some in the industry have pushed bills that would remove any local controls or regulation whatsoever.”

He cited one such example in Michigan House Bill No. 4722, which would prevent local governments from banning short-term rental housing. Though it passed the House in 2021, no progress has been made since.

“If they want to prevent banning short-term rentals, that’s fine, but if they want to prevent any regulation, that’s not. The community should have that ability to protect residents and their housing stock,” Schor said.

These protections could include increased penalties for property owners who rent to parties who go on to violate ordinances. It could also take the form of a cap on the number of properties that can be listed on Airbnb and VRBO, a strategy implemented in cities like New Orleans and San Diego.

“If you have short-term rentals and people who aren’t occupying the home for a year, they may not listen to the city’s ordinances,” Schor said. “So, anyone who lives near a short-term rental just wants to make sure they’re not being awakened in the middle of the night, that there’s not trash all over the place, that there aren’t big parties going on next door.”

Back in East Lansing, Ryckman said the owner, Benjamin Jamo, tried to post the home on Airbnb a second time, but under his fiancé’s name.

“I think he was trying to conceal it so neighbors wouldn’t find it again,” Ryckman said. “It’s just been really contentious in the neighborhood lately, and kind of a gnarly way to meet all your new neighbors.”

Jamo, who did not respond to a request for comment, has since applied for a rental license from the city.

It may be too late, however. In December, residents in the surrounding Glencairn Neighborhood, which lies within the boundaries of Saginaw Street, Abbot Road and Grand River Avenue, submitted the R-O-1 petition with signatures from 100 of the 149 properties in Glencairn that fall within the overlay’s proposed boundaries. That was enough to warrant the proposal’s introduction at the City Council meeting on Dec. 5.

The next step comes in a public hearing at tonight’s planning commission meeting. After that, it could stay on the commission’s agenda for multiple meetings before it’s passed back to the Council for a final vote. Until then, a moratorium has been placed on all new rental licenses in Glencairn, including Jamo’s property and at least two similar applications.

If approved, the neighborhood would become the city’s 21st overlay district.

“Regardless of the outcome of the overlay, we need to find a new way forward so we can have some semblance of community belonging again,” Ryckman said.