Michigan Short-Term Rental Rules, City by City (Verified 2026)
Program and regulatory figures verified September 10, 2026. Details change; confirm your scenario with us.
Buying a short-term rental in the wrong Michigan city, or before its permit, is an expensive mistake. This is the city-by-city status table we check before writing a single loan: dated, sourced, and updated when an ordinance or a Lansing bill moves.
The 2026 status table
| City | Status (as of September 2026) | Cost | Key rules |
|---|---|---|---|
| Detroit | Owner-occupied only | varies | Non-owner STRs restricted; long-term rent is the underwritable base |
| Ann Arbor | Principal-residence only; moratorium drafted | $500 license | Whole-home limited to principal residence; 8-1 vote to draft a 6-month moratorium 7/20/26 |
| Grand Rapids | Restricted via zoning + rental certification | varies | No simple citywide license; STR income hard to document |
| Traverse City | Legal with license, capped | $200/yr | Vacation Home Rental license; citywide cap of 2,040 permits, two-tier |
Fees and statuses verified September 2026 against city sources. Ann Arbor's moratorium is a draft, not enacted law, and the statewide preemption bills are pending; confirm current rules with the city before purchase.
There is no Michigan statewide STR law (yet)
Michigan has not enacted a statewide short-term-rental statute, so authority sits with each municipality. Two competing bills have moved in Lansing and neither has become law: HB 6026 would create a statewide registry and impose a 6% excise while preempting local bans, and HB 5138 would instead protect local control. Because that fight is unresolved, this table matters more than any national summary: the same house is owner-occupied-only in Detroit, principal-residence-only with a drafted moratorium in Ann Arbor, zoning-gated in Grand Rapids, and a straightforward capped license in Traverse City. Where a smaller market has no clear ordinance, we treat that as a reason for extra diligence, not a green light.
The four regimes, compared
Detroit is the most closed to investors: short-term rentals are limited to owner-occupied homes, so a non-owner nightly rental is not a business you can finance on projected revenue there. Ann Arbor is close behind, with a $500 license, a principal-residence limit, and a six-month moratorium the council voted 8-1 to draft on July 20, 2026. Grand Rapids sits in the middle: no outright ban, but zoning and rental-certification rules that make STR income hard to document. Traverse City is the cleanest for a dedicated STR investor, because its Vacation Home Rental license is a defined, if capped, path, at $200 with a citywide ceiling of 2,040 permits, so the constraint there is availability rather than legality. Financing for all of these is in Michigan STR loans, and the metro guides carry the local color: Detroit, Grand Rapids, Ann Arbor.
Permit before loan, always
The order matters. We verify a property's short-term-rental path (right city, current ordinance, cap capacity in Traverse City, owner-occupancy status in Detroit and Ann Arbor) before we underwrite any STR income. Where a regime is closed to non-owners or a moratorium is pending, we structure the loan to qualify on long-term rent so the deal survives a regulatory surprise. That conservatism costs nothing when things go smoothly and saves the property when a city tightens the rules mid-stream.
No pressure, no obligation, and no salesy follow-up: a 20-minute call with our team, real numbers, and a straight answer on whether the deal pencils.
Frequently asked questions
Does Michigan have a statewide short-term rental law?
No. As of September 2026 Michigan has not enacted a statewide STR statute, so each city sets its own rules. Two bills are pending and unresolved: HB 6026 would create a statewide registry with a 6% excise and preempt local bans, while HB 5138 would preserve local control. Until one passes, city ordinances govern.
Can I run a short-term rental in Detroit or Ann Arbor?
Only in an owner-occupied home in either city. Detroit limits short-term rentals to owner-occupied property, and Ann Arbor limits whole-home STRs to a principal residence and charges a $500 license. Neither allows a non-owner investor to underwrite an STR on nightly revenue, so we build those files on long-term rent instead.
What did Ann Arbor decide about a short-term rental moratorium?
On July 20, 2026 the Ann Arbor council voted 8-1 to draft a six-month moratorium on new STR approvals. As of our September 2026 verification it was a draft, not enacted law, so we treat it as volatile and confirm the live ordinance before underwriting any Ann Arbor STR income.
What are the short-term rental rules in Traverse City?
Traverse City requires a Vacation Home Rental license at $200 and caps the total number of permits citywide at 2,040 under a two-tier system. It is the cleanest defined path for a dedicated STR investor in Michigan, so the real constraint is availability: once the cap is reached, new permits wait for turnover.
Can I run a short-term rental in a smaller Michigan town?
Often yes, but verify locally. Outside the regulated cities, many Michigan municipalities have no STR-specific ordinance, and the pending statewide bills could change the picture. A missing ordinance is a reason for extra diligence, not a guarantee, so we confirm the local rule before underwriting STR income.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. City short-term-rental rules and tax figures change; confirm current requirements with the city, your CPA, or a Michigan real estate attorney before you buy. Loans are subject to buyer and property qualification.