Traverse City, Michigan Short Term Rental Regulations Guide for Airbnb hosts

Overview: Are Short-Term Rentals Allowed in Traverse City?

Yes, short-term rentals are explicitly allowed in Traverse City, Michigan, but only with proper licensing and in designated zoning districts. The city regulates these properties as "Vacation Home Rentals" under Chapter 870 of the municipal code and requires all operators to obtain a license before beginning operations.

Permitted Zoning Districts

Short-term rentals are only permitted by license in the following zoning districts:

C-1: Office-Service (with restrictions)
C-2: Neighborhood Center (with restrictions)
C-3: Community Center
C-4: Regional Center
D-1: Development District
D-2: Development District (with restrictions)
D-3: Development District
GTC: Grand Traverse Commons
HR: Hotel Resort
I: Industrial District (with restrictions)
T: Transportation District

You can verify your property's zoning designation using the city's Interactive Zoning Map.

How to Start a Short-Term Rental Business

Step 1: Verify Property Eligibility

Use the Interactive Zoning Map to confirm your property is located in an eligible zoning district. For zoning questions, contact the city at (231) 922-4464.

Step 2: Gather Required Documentation

Before submitting your application, compile all necessary documents (detailed in the next section).

Step 3: Submit Application

Complete the online application through the city's licensing portal at HostCompliance.

Step 4: Schedule Fire Inspection

After application submission, contact Fire Inspector Jacob Steichen at (231) 631-7423 to schedule the required inspection.

Step 5: Display Required Postings

Print and display the required Noise Control & Consumer Fireworks notice in your rental unit.

Required Documents, Permits, and Licenses

New License Application Requirements:

Parcel ID Number - Located on the Tax Parcel Viewer Map
Proof of Liability Insurance - Minimum $1 million per occurrence coverage
Fire Escape Plan - A sketch of the dwelling unit showing bedrooms and locations of windows/doors
Site Plan - Overhead view or sketch of entire building/property showing conformance to zoning code provisions
Self Inspection Form - Submit blank form for initial year (Download Here)
Application Fee - $200 for new applications

License Renewal Requirements:

License Number (from previous license or renewal reminder)
Proof of Liability Insurance ($1 million per occurrence)
Completed Self Inspection Form
Fire Escape Plan
Site Plan
Renewal Fee - $200

Important Notes:

Licenses expire December 31st annually
Renewals can only be processed 30-90 days before expiration
On-site fire inspection required every third year
Fire inspection required for all new licenses

Specific City Regulations

Licensing Requirements

All vacation home rentals must obtain a license under Ordinance Chapter 870
Annual license renewal required
Fire safety inspection mandatory for new licenses and every third renewal cycle

Operational Requirements

Display required noise control and fireworks notice in rental unit
Maintain $1 million liability insurance coverage
Comply with fire safety requirements and escape plan posting
Adhere to zoning district restrictions where applicable

Geographic Restrictions

Short-term rentals are prohibited in residential zoning districts and limited to the commercial, development, industrial, and special districts listed above.

Regional Context

Peninsula Township (Old Mission Peninsula)

Complete Ban: Peninsula Township, encompassing the popular Old Mission Peninsula tourist area, completely prohibits short-term rentals. The township requires minimum 30-night stays, effectively eliminating weekend and short-term rental options. Violations face escalating fines:

First Offense: $500
Second Offense: $750
Third Offense: $1,500
Subsequent Offenses: $5,000

This ban has been in place since 1999, with enforcement strengthened through a March 2025 amendment adding the fine structure.

State-Level Regulations

Michigan does not impose specific state-level restrictions on short-term rentals, allowing local municipalities to establish their own regulations.

Contact Information

Primary Licensing Authority

City Clerk's Office

Phone: (231) 922-4480
Email: tcclerk@traversecitymi.gov
Address: 400 Boardman Avenue, Traverse City, MI 49684

Fire Safety Inspections

Fire Inspector Jacob Steichen

Phone: (231) 631-7423

Zoning Questions

City Planning Department

Phone: (231) 922-4464

General City Information

City of Traverse City

Main Phone: (231) 922-4700
Website: www.traversecitymi.gov

Source Links

This comprehensive regulatory framework demonstrates Traverse City's balanced approach to short-term rental management, allowing the practice while maintaining oversight to protect neighborhood character and ensure safety compliance.

Traverse City, Michigan is a picturesque city located in the northern part of Michigan’s Lower Peninsula. Known for its scenic beauty, Traverse City sits on the shores of Lake Michigan’s Grand Traverse Bay. As of the most recent census, the population of Traverse City is approximately 15,000 residents. The city is around 140 miles (approximately a 2.5-hour drive) from the nearest major city, Grand Rapids, MI.

Traverse City is renowned for its vibrant arts scene, numerous festivals, and rich history. Key landmarks and attractions in Traverse City include the historic Village at Grand Traverse Commons, a unique redevelopment project that converts a 19th-century asylum into a community filled with shops, eateries, and residences. Another popular destination is the Sleeping Bear Dunes National Lakeshore, located a short drive from the city, which offers breathtaking views and numerous outdoor activities such as hiking and dune climbing.

The city's appeal for short-term rentals is driven by its myriad attractions and activities. Traverse City is known as the "Cherry Capital of the World," and it hosts the annual National Cherry Festival, attracting visitors from around the globe. For wine enthusiasts, the Old Mission Peninsula and Leelanau Peninsula offer a collection of wineries that are perfect for tasting tours.

Outdoor enthusiasts are drawn to the area for its access to water sports, fishing, and boating on the Grand Traverse Bay, as well as skiing and snowboarding in the winter at Mt. Holiday and Hickory Hills Ski Area. Additionally, the Traverse City State Park provides a beautiful backdrop for camping and exploring nature.

Overall, Traverse City's combination of natural beauty, rich culture, and a variety of recreational opportunities make it an appealing destination for short-term rentals, catering to tourists looking for both relaxation and adventure.

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