Short-term rental rules · Traverse City, Michigan
Short-term rentals in Traverse City, explained properly.
In the City of Traverse City, unhosted vacation home rentals (stays under 30 days) are not allowed in residential districts. They're permitted with a city Vacation Home Rental License in hotel-resort, commercial and development districts, capped at 25% of units in some of those districts. In residential neighborhoods the option is a licensed, owner-occupied Tourist Home renting two or three rooms. The city has been reviewing its rules, including possible citywide caps and escalating penalties. Surrounding townships in Grand Traverse County have their own rules.
Draft. These rules were compiled from the sources listed below — official where available, with fields that rely on secondary sources marked for review — and have not yet been checked line by line. Confirm with the city before making decisions.
At a glance
What you need to know before you buy or list
| Question | Answer |
|---|---|
| Allowed only in resort, commercial and development districts | Vacation home rentals — a dwelling rented for less than 30 consecutive days — are permitted in the Hotel Resort (HR), C-1, C-2, C-3, C-4, D-1, D-2 and D-3 districts, not in residential districts, and require a city Vacation Home Rental License[1]Confirming |
| 25% cap in some districts | As of late 2024, vacation home rentals were capped at 25% of units in the C-1, C-2, D-2, HR and I districts and uncapped in C-3, C-4, D-1 and D-3; more than 500 units were licensed[2]Confirming |
| Owner-occupied Tourist Homes in residential districts | Owner-occupied Tourist Homes are permitted in residential districts with a license. As of late 2024, low-intensity tourist homes could rent up to 2 guest rooms and 84 guest nights a year; high-intensity homes up to 3 rooms and 85+ nights, with 1,000-foot spacing[2]Confirming |
| License fee reported at $200 | A secondary source reports a $200 Vacation Home Rental License fee, expiring December 31 each year[3]Confirming |
| Last researched | September 25, 2026 |
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Detailed rules
The full picture, section by section
Changes
Recent and pending changes
The Planning Commission began reviewing vacation rental rules in late 2024 (possible citywide or percentage caps, escalating penalties, merging tourist-home tiers). Check whether the City Commission adopted changes in 2025–2026. Townships around the city (Garfield, Peninsula, East Bay, Elmwood, Acme) are separate jurisdictions.
Options under review included citywide or percentage caps, new caps in more districts, escalating penalties, and removing the low/high-intensity tourist home distinction.
Sources
Every rule above links to one of these
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This page is general information compiled from public sources, not legal or tax advice. HOA rules, deed restrictions and zoning for a specific property can be stricter. Confirm with the local permitting office and a qualified professional before buying or listing a property.