DDA: short-term rental policy ‘is adequate’ in downtown Ludington

March 9, 2019

Although the idea of changing city law to allow short-term rentals in downtown Ludington has advanced through the committee process so far, the Downtown Development Authority (DDA) board has stated its concerns about the proposed ordinance amendment.

A Ludington zoning ordinance restricts rental stays of less than 28 days to only be allowed in traditional vacation rental units — specifically hotels, motels, bed and breakfasts, boutique hotels and condominiums. The ordinance applies to the entire city, but landlord Ryan Reed is trying to get the downtown area made exempt from the restriction.

Ludington’s Building & Licenses Committee and Planning Commission have both recently recommended the issue of short-term rentals be examined further and that allowing them downtown be considered. But the DDA during its meeting Monday felt differently, according to Jen Tooman, DDA communication and marketing manager. Tooman stated in a fact sheet document emailed Wednesday to city officials and downtown businesses: “As of the March 4th board meeting, the Downtown Ludington Board supports short term rentals in the DDA district through the already existing avenues (boutique hotels and condominiums). The board wants to ensure there are all types of housing in the downtown area. They feel that opening the short term rental ordinance to include all rental units could have a negative effect on long-term housing availability and the off season economy of the downtown area.

“(The DDA) believe there are already an adequate number of short term rentals via hotel/motel rooms and condominium units to support our tourism industry. (The DDA) believe that long-term housing, both market rate and workforce, is needed to sustain an employable population,” she wrote.

Reed owns the former Odd Fellows Lodge at 115 W. Ludington Ave. downtown, which has two apartments on the upper floor. He lives in one and wants to rent the other short-term, using Airbnb. Since Reed’s property doesn’t have the minimum of four rental units required, his building doesn’t qualify to become a boutique hotel, and he said he can’t afford to convert it into a condo.

“To officially condo-ize my property, I would have to sell my property to myself, break it apart into three different parcels and reassess my taxes. The cost of something like this is an estimated ... $7,500 to $15,000,” Reed told the Planning Commission during its meeting Wednesday. “That’s an undo hardship compared to some other people who have availed themselves to the boutique hotel exemption to (short-term) rent with a $200 (application) fee.”

Reed said he disagrees with the DDA’s statement that the existing system of rentals in Ludington is sufficient.

“Most any given weekend and oftentimes many weeknights during the summer, if you drive up and down the avenue, you see the glowing ‘No vacancy’ signs, so in most of our high season, we quite literally can’t fit an additional body in our town legally,” he said.

Easing the restrictions on short-term rentals downtown would allow more tourists to visit the city, Reed added.

Planning Commissioner John Terzano, who attended the DDA board meeting Monday, said he didn’t know if the DDA had made an official decision on its position regarding short-term rentals.

“I will say that there is strong opposition to this among some members of the DDA,” Terzano told the Planning Commission.

Heather Tykoski, community development director, told the commission that during the DDA meeting, “There was a lot of discussion over existing avenues already being in place to do (short-term rentals) in the DDA.”

Tykoski said some DDA members are concerned about maintaining a balance between long-term and short-term rentals.

“One of the goals of the DDA is to provide an environment where people live, work and play,” she said. “One of the goals of the (Michigan Economic Development Corporation) and some of our partners is to provide placemaking. That’s why they put grants and grants money into this area, is to get people living there and to provide (population) density. So if we’re not careful on that balance that we provide, we could end up like some of the other communities, where they’re having issues with only having short-term rentals available downtown.

“We don’t feel there’s an extensive amount of information that’s been gathered at this point as to what we should do,” Tykoski said. “Nobody has that answer, but there was a strong feeling that there are avenues to do this. So looking forward, we just want to provide a little data for you to look at the (short-term rentals) issue. As everyone has stated, it is here. It is probably here to stay, so we might as well start talking about it.”