10 7 NB City STR Special

Laura Murray (right) addresses the New Buffalo City Council during the Monday, Oct. 4, special meeting.

NEW BUFFALO — The New Buffalo City Council, during a sometimes contentious Oct. 4 special meeting, approved the first reading of a short-term rental Zoning Ordinance Amendment that would prohibit the licensing of new short-term rental units in the city’s R-1, R-2, and R-3 residentially zoned districts while allowing new STR licenses to be issued in all other zoning districts that contain dwelling units once a moratorium on such action ends Nov. 1.

The council voted 4-0 (Lou O’Donnell IV was absent) to approve the first reading of what was known as “Proposal A.” The other draft ordinance amendment included in the meeting packet (Proposal B), called for prohibiting new short-term rentals in the R-1 district only, with new licenses to be issued the R-2 and R-3 districts once the moratorium (in place since May 2020) ended.

The amendment must be voted on again by the City Council after a second reading before it can take effect (20 days after enactment or upon publication, whichever is later).

Although the next scheduled meeting of the council is its Oct. 18 regular meeting, the packet for that session includes the following:

RESOLUTION 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.

During the public comment portion of the Oct. 4 special session, one speaker was ejected and another removed himself from the meeting room in response.

Prior to the start of the comment period, Mayor John Humphrey listed ground rules including: “Please direct to the council as a whole, do not make any individual comments — you will be called out of order.”

The eighth person to address the City Council — Laura Murray — referred to the perception of “a power-hungry mayor” and a few moments later said “Fact: The mayor is strategically trying to control short-term rental access by rezoning the City of New Buffalo,” which caused Humphrey to ask one of the police officers on duty to “please escort Miss Murray from the building” for being “out of order.” When Murray asked why she was out of order, Humphrey responded that speakers had been asked not to address members of the council directly. She exited to scattered applause.

Audience member Tim Gro, signed up to speak in the next three-minute slot, followed Kelly out the door after exclaiming “I’m going to excuse myself because this is just a travesty. You guys should be ashamed of yourselves.”

City Manager Darwin Watson said the intent of the regulations is not to restrict or eliminate short-term rentals, but to implement safeguards to protect consumers, property owners, surrounding neighbors and emergency responders while preserving the character of residential districts.

Watson went over the recent history of city action on the short-term rental issue including a special March 17, 2021, joint meeting of the City Council and Planning Commission to “discuss the development of a new draft ordinance package consisting of two separate ordinances.”

He said those two ordinances were: 1. To amend the regulatory ordinance adopted in April of 2019 (which was done in May 2021); and 2. Pass the zoning ordinance as necessary for the existence of short-term rentals in the city by establishing a definition of short-term rentals in the zoning ordinance.

He noted that the Planning Commission held a public hearing on the two alternative zoning proposals on Sept. 15, and voted against recommending other one to the City Council on Sept. 21.

Although Proposal A does not permit any new STR licenses to be issued in residential districts after the moratorium ends, Watson said it allows the city to “review the effectiveness of the amendments to the Zoning Ordinance” and “allows city staff to work with planning consultants in determining what the optimum density and saturation should be for the residential districts.”

Watson, citing an “inordinate amount of requests for data” related to “an extensive study” mentioned in the draft ordinance, said he plans to hold a “short-term rental informational dossier to give you everything that I could possibly give you” in City Hall at 6 p.m. Tuesday, Oct. 12.

During the Sept. 21 Planning Commission meeting, Watson said the number of short-term rental licenses in the city stands at 148, with 88 of them in the R-1 district. He said there were 78 applications in line for new short-term rental licenses, 45 of them in R-1. Watson also said the Granicus firm has reported 50 unregistered active short-term rentals in the city (Humphrey said on Oct. 4 that the number could have reached up to 150).

A few modifications were made to Proposal B prior to the Oct. 4 vote including a new Section 4 to the amendatory text that provides: “Review after Implementation. Not later than November 1, 2022, City staff shall provide a report to the Planning Commission and City Council regarding the number of registered STRs in each zoning district in the City. After receiving such report, the Planning Commission and City Council may evaluate whether the implementation of this ordinance has achieved its intent and what, if any, amendments should be made.”

Some of the major provisions of Proposal A were listed in the meeting packet as follows:

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.

In explaining the recommendation for first-reading approval of Proposal A, City Attorney Nick Curcio said there was concern that Proposal B could result in “a fairly significant increase in the number of permits” in the R-2 and R-3 districts” that could be “too much too soon.”

He said under Proposal A the city and its zoning review consultant to study areas in all residential districts (including R-1) that could potentially be amenable to more short-term rentals.

“If the Planning Commission and the council were to reach that conclusion, they could increase the number at that time, after that zoning review has been completed.”

It was noted that the City also could rezone some properties that are currently in the R-1, R-2, or R-3 districts into different zoning classifications that allow new STRs.

“This isn’t about banning rentals, this is about regulating where they can operate and how many we eventually want to have,” Humphrey said.

The introduction to the draft version of “Proposal A” (AN ORDINANCE TO AMEND SECTIONS 2-3, 6-2, 7-2, AND 8-2, AND ADD A NEW SECTION 20-8 TO THE NEW BUFFALO ZONING ORDINANCE TO PROHIBIT NEW SHORT-TERM RENTALS IN THE R-1, R-2, AND R-3 ZONING DISTRICTS ) includes the following language:

WHEREAS, in April 2019, the City Council adopted an ordinance requiring the registration and inspection short-term rental units within the City; and

WHEREAS, since enacting the ordinance, City staff has studied the registration statistics and the density of short-term rentals; and

WHEREAS, after extensive study of the proliferation and effects of short-term rental uses, the City Council has determined that if current trends were allowed to continue, short-term rental uses could undermine the character and stability of neighborhoods in certain districts by, among other things:

1. Decreasing the number of long-term residents; 
2. Decreasing enrollment in local schools; 
3. Decreasing the availability of long-term housing stock, thereby driving up prices and making long- term residency less affordable; 
4. Creating significant numbers of vacant homes in the winter months; and 
5. Increasing levels of noise, traffic, and on-street parking during the summer tourist season.

Public Comments

Those speaking during the public comment portion of the Oct. 4 meeting included:

• Mary Rose Denton said she agrees with the Planning Commission that the city needs to gather data on how short-term rentals affect the city’s economy. “Let’s help permanent STRs following the rules and support them as a community.” Also calling for using the permit money collected from such rentals to help hire full-time enforcement officers who can respond to illegal STRs.

She also claimed short-term rental taxes go directly to the state, often under an “honor system,” bypassing the local economy. “We need hotels, resorts, and B&Bs in New Buffalo, not more short-term rentals.”

• Ron Watson talked about issues related to STRs in Sunset such as “too many cars and too many occupants,” adding that he has received over 100 complaint calls from residents over the last three years.

• Bart Goldberg said he feels the ordinance amendments under consideration are wrong for the city, wrong for the second homeowners, wrong for full-time residents, and (addressing the council) “it is even wrong for you.” He said New Buffalo has blossomed since the 1980s when it was struggling. “But now we have a council that is looking to return us to prehistoric times.”

• Diane Pyshos said the individuals who have property rights in New Buffalo’s residential (R-1, R-2 and R-3) districts are the those who own single-family homes, not the owners who use their homes for STR purposes. “The question we need to ask is are we a commodity or a community? And how would this answer help dictate how the city would like to proceed with this discussion.”

• Sharon Kelly called for additional research into the short-term rental issue before “putting the cart before the horse” to figure out what the actual problem is. “We should give enforcement a chance.”

• Edan Gelt said the city hasn’t spent enough time policing the issue, adding that she wasn’t told she needed a STR permit (and would have gotten one if she had known). “There’s 13 people right now in a lawsuit. You can make that go away really quick by just giving them a permit because they were not given the opportunity … It’s not right and it’s not fair. And the council should make things just before they start changing the law.”

• Before she was ejected, Murray said the Planning Commission on Sept. 21 voted down both ordinances that would “effectively ban short-term rentals going forward,” adding that planners have begged for more data, more solutions and more time. “Despite their pleas, that represent the majority of the residents and local business owners, the City Council sits here poised to cause irrevocable harm to the city and its constituents.”

• Ryan Nofziger said she is asking for enforcement, for having the moratorium lifted, and for giving the people “that have been patiently waiting for 18 months an opportunity to comply.”

• Adam Tynowski urged the council not to pass Proposal A, calling a ban on new STR licenses in the R-2 and R-3 districts overkill and “an answer to a problem that literally nobody sees.”

• Justin Kocks, who said he and his wife own Sweetwater Boating Supplies, said he is opposed to the proposed changes regarding short-term rentals, saying he is concerned they could affect the revenue stream at their store along with property values on Whittaker Street.

Council member Mark Robertson later observed that there’s been a moratorium on new short-term rental licenses for a year and a half in the city, and downtown businesses are thriving and the beach is full.

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