Comparent
RestrictedCity

Short-Term Rental Regulations
in Traverse City, MI

Last verified: March 2026 · Report an update

Zoning & Conditions

Vacation Home Rentals are allowed only where authorized by the City Zoning Code; only an owner may hold a license; required items include a fire-escape plan posted in each guest room, proof of insurance, posting of noise/fireworks ordinances, and inclusion of the city-issued license number in advertisements. Inspections are required prior to initial issuance and every three years for continuously operated rentals.

How to Obtain a Permit

1) Submit a written application to the City Clerk (online application link provided by the City) including owner contact, address of primary residence, a signed statement acknowledging the chapter conditions, and a self-inspection checklist; 2) Pay the application fee ($200 as listed on the City’s application page) and complete the required City inspection prior to issuance (subsequent inspections every three years); 3) Renew annually (licenses expire Dec 31; renewals processed 90–30 days prior); license fee is set by City resolution but the City application page lists $200 for initial and renewal.

Regulatory Updates — Traverse City

Proposed and recent legislation

PassedJuly 2023

Traverse City STR Registration Ordinance

Traverse City enacted a registration requirement for all short-term rental operators, mandating an annual city license, safety inspection, 24/7 local contact designation, and compliance with occupancy and noise standards. The ordinance applies to all STRs within city limits.

Under ReviewApril 2025

Residential Neighborhood STR Density Review

The city initiated a review of STR density in residential neighborhoods — particularly lakefront and near-downtown areas — following complaints from full-time residents about noise, parking, and neighborhood character. The review is evaluating whether primary-residence requirements or density caps should be introduced.

PassedJanuary 2023

Michigan Lodging Tax Compliance

Michigan's 6% use tax applies to short-term rental income. Grand Traverse County imposes an additional lodging excise tax. Airbnb and Vrbo collect and remit Michigan state use tax on behalf of hosts through the state's marketplace facilitator law.

Official source

Official Resources

Official Traverse City STR regulation source

Local Resources & Advocacy

Traverse City Area Chamber of CommerceLocal

Tracks local business regulations including STR ordinance changes affecting the Traverse City tourism and hospitality sector. Provides compliance resources for STR operators.

Michigan Association of REALTORS®Statewide

Statewide association monitoring property regulations including STR-related zoning and licensing changes in Traverse City and other Michigan resort markets.

Vacation Rental Management Association (VRMA)National

National trade association providing regulatory monitoring and professional standards for vacation rental managers in Great Lakes resort markets.

Frequently Asked Questions

Are short-term rentals allowed in Traverse City, MI?
Vacation Home Rentals are allowed only where authorized by the City Zoning Code; only an owner may hold a license; required items include a fire-escape plan posted in each guest room, proof of insurance, posting of noise/fireworks ordinances, and inclusion of the city-issued license number in advertisements. Inspections are required prior to initial issuance and every three years for continuously operated rentals.
Is a permit required to operate a short-term rental in Traverse City?
Yes, a permit is required to operate a short-term rental in Traverse City. 1) Submit a written application to the City Clerk (online application link provided by the City) including owner contact, address of primary residence, a signed statement acknowledging the chapter conditions, and a self-inspection checklist; 2) Pay the application fee ($200 as listed on the City’s application page) and complete the required City inspection prior to issuance (subsequent inspections every three years); 3) Renew annually (licenses expire Dec 31; renewals processed 90–30 days prior); license fee is set by City resolution but the City application page lists $200 for initial and renewal.
How do I get a short-term rental permit in Traverse City?
1) Submit a written application to the City Clerk (online application link provided by the City) including owner contact, address of primary residence, a signed statement acknowledging the chapter conditions, and a self-inspection checklist; 2) Pay the application fee ($200 as listed on the City’s application page) and complete the required City inspection prior to issuance (subsequent inspections every three years); 3) Renew annually (licenses expire Dec 31; renewals processed 90–30 days prior); license fee is set by City resolution but the City application page lists $200 for initial and renewal.
What permits are required to operate a short-term rental in Traverse City?
Operators need a City of Traverse City STR license (annual renewal with safety inspection and 24/7 local contact), and must register with the Michigan Department of Treasury for state use tax and Grand Traverse County for lodging excise tax. Michigan's marketplace facilitator law means Airbnb and Vrbo collect and remit state use tax on behalf of hosts. Operators using direct booking channels must register independently.
Are STRs allowed in Traverse City's lakefront neighborhoods?
Currently yes, with a city license. However, the city is reviewing whether density caps or primary-residence requirements should apply in lakefront and near-downtown residential zones following community complaints. The regulatory situation could change in the next one to two years. Investors considering lakefront property for STR purposes should monitor Traverse City Commission proceedings and factor potential future restrictions into their investment analysis.
What is the STR market like on the Old Mission and Leelanau peninsulas?
Old Mission Peninsula and Leelanau Peninsula are in Grand Traverse County and Leelanau County, respectively — outside Traverse City city limits and subject to county ordinances rather than city rules. Both peninsulas have growing STR markets driven by vineyard tourism and lake access. Grand Traverse County and Leelanau County each have separate STR regulations. Operators should confirm which county governs their specific property.
Comparent

Looking for property managers in Traverse City, MI?

Compare top-rated short-term rental managers on Comparent — read reviews, see pricing, and find the right fit.

View Property Managers

Disclaimer

This information is for general reference only and may not reflect the most current regulations. STR regulations change frequently. Always verify requirements with official local government sources before operating a short-term rental.

Last verified: March 2026 · Suggest a correction