Homeowner seeks state court ruling in Airbnb case
In a case that could have statewide ramifications, a St. Clair Shores man is seeking an appeal to the Michigan Supreme Court to allow him to continue renting out his home through Airbnb.
Michael Dorr wants the high court to hear his objections to a state Court of Appeals ruling last Oct. 29 that upheld both a St. Clair Shores district court judge and Macomb County Circuit Court judge who maintained the misdemeanor offense against Dorr for violating the city Zoning Ordinance by providing short-term rentals in a single-family residential district.
Dorr, who resides along a canal off Lake St. Clair, was found guilty by Judge Joseph Oster in February 2019 and paid a fine for two overnight rentals in 2018. Circuit Judge Diane Druzinski upheld the conviction in July 2019.
Dorr’s attorney, Derk Wilcox, who is with the Mackinac Center in Midland, argued the city does not prohibit short-term rentals, and its zoning ordinance is “unconstitutionally vague” on the issue so violates due process.
“A resident cannot be criminally liable for actions which are not clearly prohibited; therefore, the conviction should be overturned,” Wilcox wrote in a legal brief seeking the right to appeal.
“If the city wants to prohibit short-term rentals, then it should pass an ordinance doing so,” Wilcox said in an interview.
The rise of Airbnb and other similar companies has raised questions nationally of whether homeowners can rent part or all of their homes. Wilcox said the Center, a nonprofit that says it “advances the principles of free markets and limited government,” has had residents asking “whether they can rent their home or not.” He said some Michigan communities have passed ordinances regulating shortterm rentals but many have not addressed the issue.
Nearby Warren recently put a moratorium on similar rentals while it studies the issue. It appears there has not been any state Supreme Court or appeals court decisions on the issue, Wilcox said.
Because of the potential consequences of the case, the Michigan Realtors Association has asked the high court to allow it to submit a legal brief in the case. Association attorneys Melissa Hagen and David Pierson say the COA opinion “greatly diminishes the services the Association’s members offer and stifles a traditional resort culture and economy.”
“The Court of Appeal’s perplexing interpretation of the Ordinance at issue, to exclude short-term rentals, adversely impacts many similarly situated property owners, potential tourists, as well as employees and businesses associated with Michigan’s tourist industry. The resultant depreciation of property values forecasts a drop in tax revenue for local governments and the support of Michigan’s schools.”
The decision “impinges on the broad freedoms granted to Michigan citizens to legally use their property and, in this instance, be free from arbitrary criminal conviction,” the association attorneys write.
Judge Stephen Borrello, one of the two majority judges in the 2-1 opinion of the appeals panel, wrote the zoning ordinance indicates a business can be operated in a single-family residential home only if the business is “incidental to the principal use of the dwelling unit for dwelling purposes.”
Rentals are not incidental, they decided.
“The purpose of the (rental) business is identical, not incidental, to the principal use of the dwelling unit,” the appeals court wrote in the 4-page opinion. “We concur with the trial court that a person of ordinary intelligence would reasonably understand from this language that the business therefore cannot be coextensive with the primary use of the dwelling as a dwelling and that the ordinance therefore prohibits the type of short-term rental business that the defendant was running from his home under these circumstances.”
Judge Kathleen Jansen, the second judge in the majority, says she agrees with the outcome but doesn’t explain why.
“I concur in the result only,” wrote the former Macomb County judge.
The dissenting Judge, Brock Swartzle, says in a 2-page opinion that a “single-night stay in an Airbnb rental would not qualify as a ‘dwelling purpose,’” so it should be part of the ordinance’s home-business exception.
“Two days over a year or more does not constitute ‘regularly engaged’ in renting one’s home on Airbnb,” Swartzle wrote.
Swartzle adds he has a broader definition of “incidental” use, saying it can include a temporary use of the “entire space” or permanent use of a single room, such as a home office.
In addition, Swartzle agrees with Dorr that the city should pass a rental ordinance.
“If the city wants to regulate or prohibit Airbnb rentals and the like, then it should clearly say so,” he says.
Wilcox said Ann Arbor passed a short-term rental ordinance that allows but regulates them.