NEW BUFFALO — The New Buffalo City Council on Oct. 18 pushed back the second reading of a short-term rental (STR) Zoning Ordinance Amendment that would prohibit the licensing of new STR units in the city’s R-1, R-2, and R-3 residentially zoned districts to Nov. 23, and extended the moratorium on issuing new STR licenses through Dec. 13.

Mayor John Humphrey said “we are not moving on this tonight because 13 residents filed certified letters asking for a third public hearing, and by Michigan State Law we must grant them their request.”

He said this means, since the third hearing will take place Nov. 23, the moratorium on issuing new short-term rental licenses must be extended from the Nov. 1 date approved (along with the first reading of the Zoning Ordinance Amendment) on Oct. 4.

The City Council voted 4-1 on Oct. 18 to approve the following regarding the moratorium:

A RESOLUTION TO EXTEND THE EXISTING MORATORIUM ON THE REGISTRATION OF SHORT-TERM RENTAL UNITS IN THE CITY OF NEW BUFFALO THROUGH DECEMBER 13, 2021

WHEREAS, on May 18, 2020, the City Council adopted a resolution imposing a temporary moratorium on the acceptance of new short-term rental registrations in certain areas of the city in order to allow further study and development of possible ordinance amendments; and

WHEREAS, on June 25, 2020, the City Council amended the moratorium to provide several exceptions to protect the investment-backed expectations of property owners who made substantial investments in prospective rental properties prior to the moratorium’s effective date; and

WHEREAS, on August 31, 2021, the City Council extended the length of the moratorium so that it is now set to expire on November 1, 2021; and

WHEREAS, since the moratorium has been in effect, the City has made substantial progress in studying the various issues relating to short-term rentals and developing a new package of proposed regulations; and

WHEREAS, the city has already adopted substantial amendments to the City Code to better regulate short-term rentals, and is in the process of considering a related amendment to the zoning ordinance; and

WHEREAS, the City Council’s consideration of final approval for the proposed ordinance was originally scheduled for October 18, 2021, must be postponed until a special meeting scheduled for November 23, 2021 in order to conduct a public hearing on the ordinance requested by numerous property owners pursuant to MCL 125.3401(4); and

WHEREAS, the City Council wishes to allow sufficient time for the proposed amendment to the zoning ordinance (if approved by the Council on November 23, 2021) to take effect before the moratorium expires.

NOW, THEREFORE, the City Council resolves as follows:

A. The moratorium imposed on May 18, 2020, as amended thereafter, is hereby extended through 11:59 p.m. on December 13, 2021.

B. All resolutions and parts of resolutions are, to the extent of any conflict with this resolution, rescinded.

Council member Lou O’Donnell IV, who cast the “no” vote, said “All you’re doing is kicking the can down the road,” adding that he feels the Zoning Ordinance Amendment “is based on zero data.”

Humphrey called O’Donnell’s claim regarding data “wildly untrue,” adding “the word rental does not exist in our zoning ordinance, the word short-term rental does not exist. So when you’re talking about the lawful use of people’s property, issuing them a permit to do something in it, the city must maintain its legal responsibility to everyone to make sure that our … ordinances are in compliance with each other.”

Humphrey said data he has shared include a spreadsheet detailing 168 police complaints that show 25 percent of the registered rentals in the city having at least one such compliant. Since then, he said reports of 600 more calls have been received and the city is still chasing down illegal rentals which he said are “very hard to catch.”

“We’ve knocked 100 out in the last year.”

O’Donnell called for having the short-term rental issue studied by people “who know what they’re talking about,” which led to a debate about whether Humphrey should be considered “an expert” on the subject.

Some of the major provisions of the short-term rental Zoning Ordinance Amendment listed in the Oct. 4 City Council meeting packet (where it received first-reading approval) follow:

1. Provide that short-term rental activity is generally allowed in single-family and other dwelling units, subject to the regulations contained in the City Code. 
2. Prohibit new short-term rental units in the R-1, R-2, and R-3 districts.

3. Provide that new short-term rentals would continue to be allowed in all other zoning districts that contain dwelling units.

4. Regulate existing short-term rentals in the R-1, R-2, and R-3 districts as legally nonconforming uses.

5. Create a new nonconforming use section that would treat nonconforming STRs a bit differently than other nonconforming uses in the City, in that it would allow the making of modifications, improvements, or repairs to the structure or land where the use is located. This is based on language from other communities that have employed similar concepts. It is designed to mitigate any potential impacts of a home’s non-conforming status with respect to issues such as resale and resale related financing.

6. Provide that if a property owner in the R-1, R-2, or R-3 districts fail to renew a rental permit within a year of expiration (or within 6 months after the end of a revocation period), the short-term rental use is deemed abandoned.

During the public comments portion of the meeting, most speakers focused on the short-term rental issue. Those addressing the City Council included:

• Diane Gajos, who said the schools and businesses “are better off” due to the presence of short-term rental units in the community. She urged city officials to take the illegal operators out of the mix and give those who have been patiently waiting and following the laws their permits.

• Jim Kramer (owner of Nancy’s) said the business makes a good profit three months of the year but all attempts to expand that have not expanded the season. “The economic engine for New Buffalo, as we all know, is summer tourism. There can be lines three months out of the year in downtown New Buffalo, and you hear crickets the rest of the year … There are plenty of towns around here that would love it.”

• Laura Murray said “Today is the culmination of a multi-year effort to begin the elimination of short-term rentals in New Buffalo. What started as a moratorium is about to turn into a ban that will have a devastating effect on the local economy for years to come. The City Council has one last chance to act in a manner that represents the clear will of the people.”

• Bill Lagothius said police reports indicate that 9 of 26 ordinance violations in 2020 come from three properties. “Those are your problems, we need to deal with those people.”

• John Natsis said “we’ve been doing this over and over … just talking about the same thing,” adding “we really haven’t been presented with the data that you keep talking about.” He also said an Oct. 12 discussion with City Manager Darwin Watson was “something that should have been done years ago.”

• Ray Kirkus urged city officials to be careful about code enforcement. “Remember, power corrupts and absolute power corrupts absolutely.”

• One speaker had questions about the legality under city rules of parking his vehicles and small watercraft in his driveways (not on his yard).

In her monthly report to the City Council, Parks Director Kristen D’Amico wrote that the boardwalk, lifeguard stands, trash cans and no swimming signs have all been removed from the beach and stored for winter, while the the beach bathrooms were locked for the season and the covers put over the kiosks Oct. 1.

“We had a fantastic season this year with parking revenues from April 1-October 1 coming in at $288,895. By far the best season I’ve seen.”

She said the municipal marina brought in $70,766 in revenue, noting that Audrey Tuszynski “did a great job keeping it clean and organized and it really shows.”

And D’Amico said the boat ramp also had a great season, with to-date revenues of $72,468, adding that the boat ramp will be open until mid-November or until all the boats are out of the harbor.

She reported that the Oselka Park bathrooms have been subjected to repeated vandalism.

“The bathrooms have now been locked. However, both the school and New Buffalo Sports have keys and are using and cleaning the bathrooms. Hopefully this will put a stop to the vandalism.”

In other Oct. 18 New Buffalo City Council business:

• Chief of Police Richard L Killips included the following in his monthly written report to the City Council: “One incident of interest involved the theft of a catalytic converter from a DPW (Department of Public Works) vehicle parked at the DPW garage. The suspect was able to crawl under the vehicle and completely cut the converter away. The damage will be forwarded onto MML for an insurance claim. This type of crime has been happening all over our area for the last few years.”

• The council approved the second reading of an amendment to Chapter 16; Section 16-1 of the City of New Buffalo Code of Ordinances - Sewers and Sewage Disposal to resolve a conflict between the definitions and the intent of an ordinance passed by the City Council that made the property owner responsible for all costs associated with sewer blocking, backups and any repairs.

• The Cty Council OK’d the second reading of amendment to the City of New Buffalo Code of Ordinances covering general (not short-term) rental units to establish and enforce minimum housing standards. The proposed ordinance amendment attempts to correct and prevent the existence of adverse conditions, and to achieve and maintain such levels of residential environmental quality that will protect and promote public health, safety, and general welfare.

• The council awarded a water and sewer rate study to develop rate recommendations to Baker Tilly at a cost of $29,500.

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