SAUGATUCK – After years of discussion and debate, a cap on short-term rental properties in a section of Saugatuck was finally approved Monday night.
The Saugatuck City Council voted on Monday, August 26, to approve changes to the zoning and police ordinance that impose a 20% cap on short-term rentals in the six neighborhoods of the R-1 district.
The changes come just weeks after the city’s Planning Commission held a public hearing on the changes before making its recommendation to the council.
Both ordinances under discussion passed by a vote of 4 to 2. Council members Russ Gardner and Gregory Muncey voted against the changes, while Logan White abstained due to a conflict of interest.
The changes limit the number of short-term rental licenses in the district, specify the impact of those limits on existing licenses, and determine how available licenses are issued to protect public health, safety and welfare.
The 20% cap will not be applied retroactively, i.e. existing STR licences will remain valid until there is a transfer of ownership or the licence is revoked or expires.
The STR situation in Saugatuck has been going on for several years and includes a proposed moratorium on short-term rentals and the formation of a task force that spent six months developing recommendations.
In February, the city passed an updated zoning and police powers ordinance that includes higher annual license fees, occupancy and visitor limits, and policies on noise, trash disposal and parking.
Since then, discussions at both the Planning Commission and City Council levels have focused on the final and most sensitive aspect of STRs – the caps.
It’s an issue that largely divides the city, residents and homeowners. Some believe caps will impact property values and tourism, while others are concerned about the impact of STRs on local neighborhoods. Other residents and council members are also concerned about the lack of an economic impact study prior to the cap vote.
More: “Sauga fraternity house”: Commissioners and residents argue over cap on short-term rents in Saugatuck
Unlike previous sessions, where most comments were directed against caps, public opinion on Monday was divided, with both loud voices for and against caps.
Local property manager Ethan Barde spoke out against the caps, expressing frustration that he believes the city council is ignoring the overwhelming majority of residents who oppose them.
“I believe a majority of the council is refusing to listen to the many experts who have voiced their opinions over the last year and a half,” Barde said before the vote. “I know what’s going to happen tonight, I’ve known since last year how this vote is going to turn out, even before the task force was finished. The council is refusing to do an economic study, get real data and make informed decisions.”
Several residents supported the cap, including Doug Rodewald, Tim Straker and Laura Godfrey.
Rodewald, his wife and two sons have lived permanently in the city for the past six years and owned their home for nine years before moving there permanently.
Rodewald said he understands the difficult position local politicians are in regarding the STRs and feels they have taken the time to listen to both sides and come up with a solution that addresses nearly all concerns.
“I want everyone to know that we are not against STRs,” Rodewald told The Sentinel. “What we are is an oversaturation of STRs. Today on Saugatuck Hill, which is zoned residential, about 40% of all the homes are rentals.”
Rodewald said that because of this oversaturation, permanent residents are severely affected by noise, parties, people going to the wrong houses late at night and other problems.
Straker shared Rodewald’s concerns.
“Our high percentage of short-term rentals results in street after street packed with people making week-long memories in a night or two, over and over again, every night of the week,” Straker wrote in an email. “Our reputation as a party town is at odds with our reputation as a great place to live and work, as evidenced by the declining number of full-time residents.”
Godfrey said the disruptions had become too much, including “the garbage, the cars on the lawn, the drinking binges and the doorbell ringing at 2 a.m. from someone who is completely dazed and doesn’t know what house they are renting.”
Despite these concerns, others expressed concern about the impact of the 20 percent cap on property values.
In a letter to the city council, Jon Broadbooks, CEO of the West Michigan Lakeshore Association of Realtors, questioned the “profound impact that STR caps could have on property values.”
“According to our records, real estate agents have sold over $338 million worth of properties in Saugatuck since 2018,” he said. “Over many generations, Saugatuck has created a wonderful and vibrant community through the transition to vacation rentals. This is important for all property owners in town.”
Broadbooks said that landowners and their rights must be taken into account.
“WMLAR supports the right to private property as a fundamental value and we have watched with great concern the city Planning Commission’s recent vote to submit a proposal to the City Council calling for a 20% cap on short-term rental licenses,” Broadbooks wrote.
Others worry about a perceived conflict of interest created by having caps only in the R-1 district.
Saugatuck business owner Richard Williams shared his concerns in a letter to the council.
“It is important to note that the R-1 cap financially benefits the Mayor, who has not yet reclined on this matter,” Williams wrote. “The Mayor (Lauren Stanton) will benefit from the increase in value of her multifamily property outside the R-1 zone. As a certified appraiser, I can attest that the potential income streams from the Mayor’s property create more value than a similar property in R-1 that has had its STR ownership rights removed. The Mayor should recuse herself on all matters involving STR caps.”
Stanton, City Manager Ryan Cummins and the city attorney have addressed the conflict of interest debate in the past.
“In a community as small and vibrant as Saugatuck, it is often common for new regulations to have an indirect impact on members of the Town Council because they also live and reside in the township,” Cummins previously wrote. “However, remote and indirect impacts do not create a conflict of interest. If they did, the entire Town Council would often be precluded from voting on matters of general application to its constituents.”
The council also approved a new policy on notification and licensing for short-term rentals during its meeting on Monday.
If the number of STR licenses in a district falls below the established limit, the City will prepare and distribute a notice, which will be published in a newspaper and on the City’s website, in accordance with the policy.
It will specify how many permits are available for which zoning districts, when the application period begins and how applications can be submitted, where residents can view the new policy, and what contact information will be provided for questions about the process.
Applicants have 21 days to submit their applications, starting at 8:30 a.m. on the first day and ending at 5:00 p.m. on the last day. They can submit them by mail, email, or in person at the city office.
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“If the number of applications submitted during the application period exceeds the number of available STR licenses, the selection of applications for the available STR licenses will be made through a random lottery drawing open to the public,” the policy states.
Cummins said this could be the final step in Saugatuck’s actions regarding STRs.
“I suspect that’s the end of it for now unless the council wishes to further consider the transfer of ownership or a future council wishes to make changes,” he said.
— Contact reporter Austin Metz at [email protected].
