Registration or Regulation? The Ongoing Saga of Empire’s Short-Term Rental Regulation

The Village of Empire is arguably the center of Leelanau County’s tourism industry, as it is located right next to Sleeping Bear Dunes National Lakeshore. Despite its national and global pedigree, Empire is one of the few communities in Leelanau County that does not have a short-term rental ordinance (STR).

That could change in the near future. Since last November, a four-person committee made up of representatives from the Empire Village Council and the Planning Commission has been working on a draft ordinance that would impose new rules on local STRs. But after eight months, 15 meetings, more than a dozen different drafts and multiple missed deadlines, the committee is divided on how to proceed and has yet to finalize an ordinance that the village council can adopt.

How did we get here—and what’s next? Read on for a timeline of Empire’s ongoing STR saga.

2019/2020: Empire Village Council conducts STR study but ultimately decides not to implement any regulatory ordinances. The study indicates that Empire has 49 STRs, 18 long-term rentals, 161 homes occupied by year-round residents and 115 seasonal homes – meaning STRs make up about 14 percent of the village’s housing stock.

July 2023: Village council appoints three council members – trustees Marcha Dye, Meg Walton and Linda Chase – to serve on the ‘Council’s Short-Term Rental Committee’, tasked with reviewing the findings from the 2019/2020 study, undertaking an update for 2023 and examining the overall STR environment in the village.

November 2023: Dye, Walton, and Chase present their findings, which indicate a significant increase in the number of STRs since 2020. The new data shows that 147 of Empire’s residences are permanent homes, 131 are seasonal homes, 22 are long-term rentals, and 63 are STRs. Empire’s STR density is now 17.3 percent.

“The Council’s Short-Term Rental Committee finds that short-term rental housing units in the Village provide value to our community,” they write in their report. “However, the growth in seasonal units, the decline in year-round units, and the growth in STRs reinforce the fact that Empire is becoming more of a tourist destination and seasonal community. These facts impact our year-round housing supply, our workforce, the residential character of our neighborhoods, and the well-being of our community.”

In response, the village council is forming a new “Village of Empire Short Term Rental Committee” to explore possible STR regulations in the village. Dye and Walton serve on the committee, as well as two members of the village’s planning commission, Robert Chase and Carey Ford. The motion calls for the group to “develop a registration ordinance and any other forms” necessary to implement the STR ordinance, with a target date of early March.

January 2024: The committee, which has contacted other municipalities locally and statewide about their STR numbers and regulations, is convening to discuss responses. Dye notes that the Village of Empire has a higher STR density than any other community in Leelanau County.

February 2024: The committee presents its first draft of the STR ordinance, which includes initial ideas for registration fees, safety guidelines, septic requirements and penalties for violations. Despite the draft, committee members agree to ask the village council for an extension “to get as much input as possible before submitting the draft ordinance.” Specifically, the committee wants to get more public input — including from summer residents — and wants to explore whether Empire should continue its STR regulations with a zoning ordinance or a police powers ordinance. The council ultimately agrees to grant the committee a two-month extension.

April 2024: A split develops between the two halves of the STR committee. Ford argues that the committee has “overstepped” its mandate and should only create a “registration” ordinance—or a system in which local STR operators must register with the village but are not otherwise regulated; Chase agrees. Meanwhile, Walton and Dye believe the committee should draft a more stringent licensing and regulatory ordinance that would include more restrictions on local STR operations. Unable to reach an agreement, the two factions decide to work on both ordinance options in parallel.

May 2024: Controversy over pending STR regulations is heating up at a contentious, three-hour village board meeting on May 9. During public comment, several residents argued against the need for more STR regulations, with one saying many residents initially found the area to be a summer vacationer and another suggesting that discussions about the STR ordinance have sparked “nothing but discord and fighting between neighbors.” Other residents say STRs are quickly overwhelming the local housing stock and now make up nearly one-fifth of all homes in the village. “We went through a nightmare in Saugatuck where a village of 900 people became over 50 percent short-term rentals and hollowed out the community,” one resident said.

Commission members make similar arguments, with Ford defending STR owners as “families who owned the property and now have to maintain it,” and Dye pointing to a 28 percent increase in STRs since 2019 as a reason to introduce regulations that could limit further expansion.

Despite their differences, committee members agree to continue working together, hoping to finalize the regulation by October so it can be implemented in early 2025.

At its May 29 meeting, the STR committee is moving toward consensus, agreeing that limiting STRs to 14 percent of the village’s total housing stock — “excluding STRs in the M22 corridor and the Front St district” — is a fair compromise. According to meeting minutes, there are 14 STRs in those two districts. “This would reduce the number of STRs to be included in the 14 percent (limit) to 46,” the committee’s minutes state. “According to the village assessor, there are 373 residences in the village as of May 7, 2024. 14 percent of 373 is 52. That leaves six (licenses up for grabs) for new STRs or for STRs that we haven’t accounted for.”

June 2024: During the council’s June 13 workshop session, Dye discusses the two competing concepts of a “registration” ordinance and a “regulation” ordinance that the commission has drafted, acknowledging that the commission has made limited progress toward consensus and expressing a sense of futility. “I don’t think there’s any point in this commission continuing because we’re not going to reach an agreement on the ordinance,” Dye says. “I think the council is going to have to make a decision on what to do next.” He encourages the council to hire a planner or attorney to get feedback on both draft ordinances, including an assessment of the pros and cons of each.

At its June 26 meeting, the council votes 4-3 to conduct a legislative review of the two ordinance concepts. The process is currently underway.