TRAVERSE CITY — Change could be coming to East Bay Township's new short-term rentals ordinance after rental owners raised a litany of complaints — and a threat of legal action.

Township Supervisor Beth Friend said trustees agreed to hold off enforcing the ordinance until May 1. They decided as much on Feb. 28, a day before the ordinance's original registration deadline for short-term renters. Their vote also came after an attorney for a group of short-term rental owners asked for a delay.

Samantha Fall said she started an organization of short-term renters who are prepared to take the township to court if the ordinance doesn't change. She owns a rental property in the township and has objected to the ordinance numerous times before, she said.

Dane Carey, the group's attorney, questioned numerous parts of the ordinance that he said appear arbitrary, unenforceable or illegal. He also submitted a list of proposed changes after trustees asked for one.

Friend said she believes some of the claims are without merit, but acknowledged there are some holes in the ordinance.

"We had a couple of portions of it that we realized was either difficult for us or difficult for the applicant, and so we are working on those in the interim before May 1," she said.

The rules are enough to prompt Marlene Baldwin to stop renting altogether, she said. She once rented a guest suite in her home and decided it wasn't worth it financially for her to get a license. The $450 licensing fee was a factor, as was the new township rule that owners can host one renter per week.

"We lose over 50 percent of our rental income if we comply to their guidelines," she said.

Traverse City charges short-term rental license applicants $200 at first, then every third year when an inspection is required. Non-inspection year fees are $150.

Gayle Miller, who owns a rental cabin on one of the township's lakes and is part of Fall's group, said some of the requirements for getting a license aren't mentioned in the ordinance.

The township's septic tank inspection requirements will cost another $300 or so, Miller said — another expense.

Friend agreed this part of the ordinance can't be enforced. It requires an inspector to be certified in one of two ways, one of which is no longer available, she said. And the nearest professional certified by the second organization is 75 miles away.

The suggestions Carey submitted point to rental frequency limitations as the top concern. The rules require a seven-day period from one check-in date to the next.

That rule doesn't seem to serve any purpose beyond limiting short-term renting opportunities, Carey said. A weeklong renter would create just as much traffic as a string of new renters arriving one day and leaving the next, he said. It's also hard for owners who use online booking services to manage, and forces their intervention for what's a fairly hands-off process.

"It seems like an undue burden on them for what we don't see as much upside for the rule," he said.

Other suggested changes are allowing owners to honor reservations for the 2019 season and nixing septic system inspection requirements and requiring pumping records instead, among six others.

Fall said she and her organization's attorney believe the township has illegal plans for the licensing fee money.

An October memo from Friend shows plans to use short-term licensing fees to pay for a full-time community police officer — about an $82,000 cost.

State law requires licensing fees to be used only to administer the ordinance that underpins the licenses, Fall said.

The township would track the costs of administering and enforcing the ordinance and use the licensing funds accordingly, Friend said. Any potential surplus collected through licensing fees could be credited to short-term rental owners looking to renew their license, for example.

Fall said she believes her complaints about the ordinance had little impact until her group threatened legal action — Baldwin also said she was discouraged by township officials' response when she spoke to them about the ordinance.

Friend rejected this, saying she's spent hours talking with people asking about the ordinance, and the township posted a document online seeking to address frequent questions. She also was prepared to ask township trustees to waive the one-renter-per-week requirement for the first year, but receiving the group's demands prompted her to ask for the delay instead.

"Right now I feel like you have some property owners focusing on things that they would like to have changed, and I understand that, but we can't always give them the answer through administration that they want to hear," she said. "We are implementing a board-approved ordinance and we have to implement what was passed by the board."

Township Planner Doug Brown told trustees he was willing to work with short-term renters who wanted a license but couldn't meet all ordinance requirements by the March 1 deadline — frozen ground makes septic system inspections all but impossible, he said by example.

Trustees and township planners worked on the ordinance for two years in public meetings, Friend said. She contended some of those complaining about it now are late to the conversation. Plus, the issue is a divisive one for which no ordinance could make everyone happy.

It'll be up to the township board whether to make changes to the ordinance, Friend said.

Fall said she and other owners aren't opposed to a township ordinance regulating short-term rentals.

"We're fighting to have an ordinance that is fair and agreeable so it suits the needs of all involved," she said. "We're in favor of an ordinance, we just want it to be lawful and abiding and fair."

City Government Reporter