Overview: STR Allowance Status

Short-term rentals are allowed in Grand Rapids, Michigan, but they are subject to strict regulations and licensing requirements. The city permits short-term rentals through a Home Occupation Class C License system, with significant limitations on how they can operate. The city limits the number of STR licenses to approximately 200 per year, making this a competitive licensing environment.

How to Start a Short-Term Rental Business in Grand Rapids

Step 1: Verify Eligibility

Before beginning the application process, ensure you meet these basic requirements:

• Possess a valid driver's license
• Have no outstanding debts to the city (court fees, property taxes, parking tickets, or income taxes)
• Own the property (must be sole owner, joint tenants, or joint tenants by the entireties)
• Live on the property you intend to rent

Step 2: Confirm Zoning Compliance

Contact the Planning Department at 616-456-4100 to verify your property is properly zoned for short-term rental operations before submitting your application to avoid processing delays.

Step 3: Apply for Special Land Use Permit

You must first obtain a Special Land Use Permit from the Planning Department before applying for your Home Occupation Class C License. This is a prerequisite for the STR license application.

Step 4: Gather Required Documentation

Prepare all necessary information and documents for your application, including detailed floor plans and personal information for all property owners.

Step 5: Submit Application and Payment

Complete either the online or paper application process with the required fees and supporting documentation.

Step 6: Complete Fire Department Inspection

The Fire Department will contact you to schedule a mandatory inspection of your property.

Required Documents, Permits, Licenses, and Guidelines

Primary License Required

• Home Occupation Class C License - This is the specific license required for operating bed and breakfasts, rooming houses, or boarding houses in Grand Rapids

Essential Documentation

• Floor plan of the entire home showing rooms intended for rental
• Special Land Use Permit Application (completed and submitted to Planning Department first)
• Personal information for all owners, partners, or corporate officers:
  • Full name
  • Complete address
  • Last 4 digits of Social Security number
  • Driver's license or State ID number
  • Date of birth
  • Email address

Property Requirements

• Property must be properly zoned for short-term rental use
• Must be owner-occupied dwelling
• If in a condominium, HOA approval letter required (if association permits STRs)

Application Fees

• New License Application: $598 (non-refundable)
• License Renewal: $176 (non-refundable)

Specific Regulations for Short-Term Rentals

Operational Restrictions

Grand Rapids has implemented very restrictive regulations for short-term rentals:

1. Owner Occupancy Requirement: The property owner must live on and own the property being rented
2. Limited Rental Scope: Can only rent one room, not the entire property
3. Guest Limitations: Maximum of two adult guests at a time (children permitted)
4. Owner Presence Requirement: Owner must be on-premises during the rental period
5. Room Type Restrictions: Only "shared room" or "private room" options allowed - "entire home/apartment" rentals are prohibited

Licensing Limitations

• The city caps the total number of STR licenses at approximately 200 per year
• Licenses are valid for one year from issuance date
• Annual renewal required
• License must be displayed openly on the property where all customers can see

Compliance and Enforcement

• Fire Department inspection required before license issuance
• Properties must meet all building safety requirements
• Violation of regulations can result in fines or forced closure
• Regular compliance monitoring by city officials

Insurance Considerations

• Standard homeowner and landlord insurance policies often do not cover short-term rental activities
• Hosts should verify coverage with their insurance provider before operating
• Consider additional "host protection insurance" offered by some platforms
• Specialized short-term rental insurance may be necessary

State-Level Regulations (Michigan)

Tax Obligations

• Michigan Use Tax: 6% state use tax applies to rentals under 30 days
• If booking platforms don't automatically collect and remit, hosts must register with Michigan Department of Treasury
• Local Lodging Taxes: Some municipalities may impose additional lodging taxes (verify with local authorities)

Business Registration

• No statewide short-term rental license required
• Local regulations take precedence
• Consider forming LLC or business entity for liability protection (not required but recommended)

Contact Information for Local Authorities

Primary Contact - City Clerk's Office

• Phone: 616-456-3016
• Fax: 616-456-4607
• Email: grbusinesslic@grcity.us
• Address: City Clerk's Office, 300 Monroe Ave NW, Second Floor, Grand Rapids, MI 49503
• Office Hours: 8:00 AM - 5:00 PM, Monday through Friday (closed on public holidays)

Additional City Contacts

• Planning Department: 616-456-4100 (for zoning verification)
• Treasurer's Office: 616-456-3020 (for debt verification)
• Income Tax Department: 616-456-3415 (for tax debt verification)

Source Links and Additional Resources

Official City Resources

• Application Portal: Citizen Access System
• Home Occupation Class C License Information: www.grandrapidsmi.gov/Services/Apply-for-a-Home-Occupation-Class-C-License
• Home Occupation License Ordinance: www.municode.com/library/mi/grand_rapids/codes/code_of_ordinances?nodeId=TITVII--LICENSING_REGULATION_CH116HOOC
• Zoning Code: library.municode.com/mi/grand_rapids/codes/code_of_ordinances?nodeId=TITV--ZONING_PLANNING_CH61ZOOR_ART5REZODI_S5.5.05USLA

Helpful Resources

• Home Occupation Class C License Checklist: Available through the City Clerk's Office
• Special Land Use Permit Application: Required prior to STR license application
• Citizen Access Account Creation Guide: Available on city website for online applications

Important Notes for Investors

• Grand Rapids' regulations are among the most restrictive in Michigan
• The owner-occupancy and on-premises requirements significantly limit traditional STR investment models
• Many existing Airbnb listings may be operating in violation of current regulations
• Consider consulting with local attorneys familiar with STR regulations before proceeding
• Monitor city council meetings for potential regulatory changes
• The limited number of licenses (200 annually) creates a competitive application environment

This comprehensive regulatory framework demonstrates Grand Rapids' approach to balancing short-term rental opportunities with neighborhood preservation and housing availability concerns. Prospective hosts should carefully review all requirements and consider the operational limitations before pursuing a license.