Overview: Are Short-Term Rentals Allowed in Detroit, MI?

Yes, short-term rentals are allowed in Detroit, Michigan, but they are subject to strict regulations and licensing requirements. The City of Detroit has established a comprehensive regulatory framework for short-term rentals (STRs) that includes licensing, occupancy limits, and annual rental day restrictions. As of 2025, Detroit hosts must obtain a short-term rental license and comply with all city ordinances to legally operate their properties.

The Detroit short-term rental market operates under both specific STR regulations and the broader rental property ordinance. While the city permits STR operations, it has implemented significant restrictions to balance economic opportunities with neighborhood stability and housing availability.

How to Start a Short-Term Rental Business in Detroit

Step 1: Understand the Regulatory Framework

Detroit differentiates between owner-occupied and non-owner-occupied short-term rentals, with each category subject to different regulatory requirements. The city has established specific zoning laws that determine where STRs can legally operate.

Step 2: Property Compliance Requirements

All rental properties in Detroit, including short-term rentals, must comply with the Detroit Rental Ordinance, which requires:

• Property registration with BSEED
• Passing a rental inspection
• Obtaining a Certificate of Compliance
• Lead clearance for properties built before 1978

Step 3: Short-Term Rental Specific Licensing

• Obtain a short-term rental license from the Buildings, Safety Engineering, and Environmental Department (BSEED)
• License cost: $500 annually
• Valid for one year from issuance date

Step 4: Operational Compliance

• Adhere to the 90-day annual rental limit
• Maintain maximum occupancy of 10 people
• Ensure property meets all safety and health standards
• Maintain liability insurance coverage

Step 5: Ongoing Compliance

• Renew licenses annually
• Complete required inspections on schedule
• Maintain accurate records for tax purposes
• Stay updated on regulatory changes

Required Documents, Permits, Licenses, and Guidelines

Essential Licenses and Permits

1. Short-Term Rental License

   • Issuing Authority: BSEED Property Maintenance Division
   • Cost: $500 per year
   • Duration: One year
   • Required for all STR operations

2. Certificate of Registration of Rental Property

   • Cost: Free
   • Required for all rental properties
   • Annual renewal required

3. Certificate of Compliance

   • Issued after passing all inspections
   • Required for legal operation
   • Renewal: 1-2 unit properties every 3 years, 3+ unit properties every 2 years

Required Inspections

1. Rental Inspection

   • 1-2 unit properties: Third-party inspection company authorized by Detroit
   • 3+ unit properties: BSEED inspection
   • Initial inspection and renewal inspections per schedule

2. Lead Inspection and Risk Assessment

   • Required for properties built before 1978
   • Must be performed by Michigan state-licensed lead inspectors
   • Lead clearance required before occupancy

Safety and Health Requirements

• Smoke detectors installed and maintained
• Fire extinguishers present and serviced
• Exit signs and egress lighting operational
• GFCI outlets installed where required
• Structural soundness and weather-tightness
• Proper waste management systems

Documentation Requirements

• Property ownership documentation
• Lead inspection reports (if applicable)
• Insurance policies with adequate liability coverage
• Guest registration and record-keeping systems
• Tax compliance documentation

Specific Regulations for Short-Term Rentals in Detroit

City-Level Regulations

Short-Term Rental Ordinance Requirements:

• Annual Rental Limit: Properties cannot be rented out for more than 90 total days per year
• Occupancy Limits: Maximum of 10 people per property at any given time
• Licensing: Mandatory STR license required ($500/year)
• Owner-Occupied vs. Non-Owner-Occupied: Different regulations apply based on occupancy status

Zoning Compliance:

• STRs must comply with Detroit's zoning ordinances
• Properties must align with the City Planning Commission's vision for residential neighborhoods
• Some zones may restrict or prohibit non-owner-occupied STRs

County-Level Regulations

Detroit is located in Wayne County. While Wayne County does not have specific STR regulations that supersede city ordinances, county health and safety codes may apply to certain property types and locations.

State-Level Regulations (Michigan)

Michigan Short-Term Rental Bill 2023:

• Clarifies local government rights to regulate STRs
• Protects homeowners' rights to rent their properties
• Establishes framework for municipal regulation of STRs

Lead Paint Regulations:

• Federal law requires disclosure of lead-based paint hazards for properties built before 1978
• Michigan Public Health Code (MCL 333.5475a) makes it a criminal offense to rent properties with known lead hazards to families with minor children
• Penalties: Up to 93 days jail time and/or fines up to $5,000 for first-time offenders

Tax Implications:

• Short-term rental income is subject to federal and state income taxes
• Local taxes, including potential Transient Occupancy Taxes, may apply
• Hosts must maintain detailed records for tax compliance

Federal Requirements

• Fair Housing Act compliance (no discrimination based on protected classes)
• Lead-based paint disclosure requirements for pre-1978 properties
• Americans with Disabilities Act accessibility considerations

Contact Information for Local Authority in Charge of STRs

Buildings, Safety Engineering, and Environmental Department (BSEED)

Property Maintenance Division - Primary STR Authority

Address: Coleman A. Young Municipal Center 2 Woodward Avenue, Suite 412 Detroit, MI 48226

Phone: 313-628-2451

Email: rental@detroitmi.gov

Website: detroitmi.gov/departments/buildings-safety-engineering-and-environmental-department/bseed-divisions/property-maintenance

Services Provided:

• STR license issuance and renewal
• Certificate of Compliance processing
• Rental property registration
• Enforcement actions and inspections

Department of Appeals and Hearings (Blight Court)

Address: 2 Woodward Avenue, Suite 1004, Detroit, MI 48226

Phone: 313-224-0098

Website: DAH Online portal available through Detroit city website

Services Provided:

• Ticket payment and hearing scheduling
• Blight violation dispute resolution
• Fine payment processing

Detroit Fire Department

Annual Inspection Scheduling: Phone: 313-596-2954

Services Provided:

• Annual fire safety inspections for apartment buildings
• Fire code compliance verification
• Emergency system testing

Detroit Water and Sewerage Department (DWSD)

Customer Service Centers:

• 15600 Grand River, Detroit, MI 48227
• 735 Randolph St., 1st floor, Detroit, MI 48226
• 13303 East McNichols, Detroit, MI 48205

Phone: 313-267-8000

Email: landlordtenant@detroitmi.gov

Website: www.detroitmi.gov/dwsd

Services Provided:

• Water service setup for rental properties
• Tenant responsibility documentation
• Account management for rental properties

Links to Source Pages

1. Draft Short-Term Rental Ordinance (2024): detroitmi.gov/document/2024-01-03-draft-short-term-rental-ordinance

2. Detroit Rental Property Requirements: detroitmi.gov/departments/buildings-safety-engineering-and-environmental-department/bseed-divisions/property-maintenance/rental-requirements

3. Certificate of Compliance Information: detroitmi.gov/departments/buildings-safety-engineering-and-environmental-department/bseed-divisions/property-maintenance/rental-property-information/certificate-compliance-1

4. Building Permit Information: detroitmi.gov/departments/buildings-safety-engineering-and-environmental-department/building-permit-fees

5. Lead Program Information: www.michigan.gov/lead/0,5417,7-310-86959---,00.html

6. Environmental Complaint Reporting: detroitmi.gov/webapp/improve-detroit-report-issue-online

7. BSEED Online Portal: aca3.accela.com/DETROIT/Default.aspx

8. Michigan Lead Certified Contractors: www.michigan.gov/documents/lead/5_Abatement_Firms_629849_7.pdf

9. Detroit Health Department Lead Program: detroitmi.gov/departments/detroit-health-department/programs-and-services/lead-program

10. Fair Housing Act Information: www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview

Important Considerations for STR Investors

Compliance Monitoring

Detroit actively enforces STR regulations through BSEED Property Maintenance. Properties operating without proper licenses or in violation of ordinances face ticketing and potential legal action. Regular compliance audits are conducted, and neighbors can report violations through the city's reporting systems.

Market Dynamics

Detroit's STR market shows growth potential but operates with lower average host income compared to national averages. The 90-day annual limit and occupancy restrictions impact revenue potential and require careful property selection and pricing strategies.

Future Regulatory Changes

The regulatory landscape for STRs in Detroit continues to evolve. The city regularly reviews and updates ordinances based on community feedback and market conditions. STR operators should stay informed about proposed changes through city council meetings and public hearings.

Operational Best Practices

Successful STR operations in Detroit require:

• Thorough understanding of local regulations
• Proactive neighborhood relations management
• Professional property management systems
• Comprehensive insurance coverage
• Robust record-keeping for compliance and tax purposes

This comprehensive regulatory framework reflects Detroit's balance between supporting economic opportunities through STRs and maintaining neighborhood character and housing availability. Compliance with all requirements is essential for successful short-term rental operations in the city.