Council moves to regulate short-term rentals

By: Mike Koury | Woodward Talk | Published April 6, 2021

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FERNDALE — The Ferndale City Council approved regulatory standards pertaining to short-term rentals at its March 22 meeting.

Ferndale has been developing its ordinance for short-term rentals for several months, after it received complaints and concerns from residents that there was an inability on the city’s part to regulate short-term rental property owners for violations ranging from noise to illegal parking.

The decision was made to craft a regulatory ordinance to define short-term rentals within the city and establish a licensing and permitting program.

“A lot of the complaints really were related to prohibitive parking issues,” City Manager Joe Gacioch told the Woodward Talk. “That would mean a guest using a short-term rental parks in front of a neighbor’s driveway. You can’t do that. ...  Let’s say if there were parties occurring in short-term rental homes (and) they were violating a noise ordinance or violating an occupancy requirement, before this ordinance, there wasn’t much we could do about that outside of just enforce the normal ordinance language. Now, there’s standards and requirements for how short-term rentals should be actually leased and advertised within Ferndale.”

A short-term rental, as defined by Ferndale, is a “home, condo, apartment, etc. that is rented on a nightly or weekly basis, or for a period of time less than 30 days.” To become a short-term rental, a property owner, both residential and nonresidential, will have to pay $185 per year. The ordinance also states that residential property owners whose short-term rental unit wasn’t leased for more than 14 days a year are eligible for a $75 refund.

Residential short-term rentals are owner-occupied, Gacioch said. This means they are people who are leasing out a portion of their home who also still live in their home.

“A good profile example of that is I live in Ferndale and it’s the Woodward Dream Cruise and I want to post a rental of my house for Dream Cruise weekend,” he stated. “A lot of our people are just doing that. I think that’s pretty common for most households when you’re owner-occupied. People are typically doing it around Ferndale-specific events, and if it’s less than 14 days a year, we still want to make sure that you understand the code of conduct and property requirements. So, you’re still gonna be required to pay the permit, but at the end of the year, we’ll see through the software that if you ended up posting less than 14 days, we’ll cut you a check back for $75.”

If the short-term rental is for a house with a nonresidential homeowner — meaning they own the property but it isn’t their primary residence and its primary use is for income — then their fee is $185 with no option for a refund.

With the ordinance, Gacioch said, there is now a clawback for Ferndale in terms of having an option to deal with short-term rentals that accrue city violations. The regulation now allows them to revoke the license of a short-term rental after three substantiated violations of the ordinance.

While the regulatory piece of the ordinance is a big aspect, Gacioch also said the law addresses how many short-term rentals are “too much for the community.”

“That’s a big topic of conversation across the region,” he said. “I think if you went to Royal Oak or other cities with downtowns in our neighborhood, you’re probably seeing similar issues with similar conversations. ... The question of capacity limits.”     
The council and city decided to limit the number of nonresidential short-term rental owners to 5% of a block.

“That means on a block of 20, if you had 20 houses on a block, 5% of those houses, so one, could be a short-term rental, a nonresident short-term rental,” Gacioch said. “What you’re doing there is putting a constraint or a cap on the amount of nonresident short-term rentals there could be added to a city.”

Residents chimed in during the meeting to share their thoughts on not only the ordinance, but their experience with living near short-term rentals. Concerns that were shared ranged from the noise violations to drive-by shootings.

Dave Cottrill told the council at the March 22 meeting that he believed short-term rentals, or STR, should only be for residential homeowners renting a room in their own house.

“STR residents don’t attend our public schools, they don’t contribute that way,” he said. “They don’t vote in our elections, they’re not counted in the census as a principal residence so that representation, that federal dollars, we’re really losing out with having STRs here.”

Scott Aaronson, an owner of several short-term rental properties in Ferndale, thinks that responsible Airbnb owners — of which he considers himself one — share many of the same concerns expressed by residents during the meeting.

“We don’t want parties, we don’t want drive-by shootings. We want the same type of people in the neighborhoods that people who own their houses do,” he said. “We want people to be able to use their houses as they intend.”

“I’ve had hundreds and hundreds and hundreds of people stay at my Airbnbs, mostly throughout Ferndale and Royal Oak, and I’d say maybe 98-99%, you don’t know about them,” Aaronson continued. “You don’t know where they are, and that’s because most of the people — at least in my experience that have stayed in my Airbnbs — are good people that want to see what Ferndale has to offer, that want to stay in Ferndale.”