Where short-term rentals are allowed in Traverse City, MI
In Traverse City's R-1a and R-1b districts, the zoning code allows tourist homes, not vacation home rentals. A tourist home rents 3 rooms at most, to 2 adults per room, for stays of 14 consecutive days or fewer.[9]
Every rule below links to the official source it comes from, verified October 2, 2026.
Can you rent short term in Traverse City?
Your zoning decides
What you apply for: Vacation home rental license
- Seasonal homes
- 604
- Housing units
- 8,479
- Residents
- 15,593
U.S. Census Bureau, 2024 ACS 5-year estimates
- City ruleAllowed by zone
- City fee$200
- Tax on each stay6%
- Seasonal homes71 per 1,000
Traverse City short-term rental rules
To rent a whole dwelling in Traverse City for under 30 consecutive days, an owner needs a vacation home rental license. Only an owner may hold one. The city inspects the home before issuing a new license, then every three years. The license is posted inside the home, and its number goes on every advertisement. Violations cost at least $500 plus costs, and each day counts as a separate offense.[6]
What Traverse City asks of you
Section 1320.07 defines a vacation home rental as a commercial use of a dwelling rented for any term under 30 consecutive days.[8]
Since July 1, 2019, no one may operate a vacation home rental without a license from the City Clerk.[6]
The application fee is $200, and a renewal costs $200 too. Licenses expire on December 31, with renewals accepted 90 to 30 days before.[5]
The Hotel Resort district lists vacation home rentals holding a city license among its allowed uses.[10]
The C-3 Community Center district allows all Hotel Resort district uses.[11]
C-4 Regional Center districts allow C-3 uses, except vacation home rentals on the first floor.[12]
The R-1a and R-1b districts list tourist homes among their allowed uses, not vacation home rentals.[9]
A tourist home is a single-family dwelling that is the owner's primary residence, hosted by the owner in residence.[8]
A high-intensity tourist home rents up to 3 rooms for 85 or more guest nights a year. It must stand 1,000 feet from another high-intensity tourist home.[9]
A low-intensity tourist home rents 2 rooms at most, for no more than 84 guest nights a year.[9]
A tourist home needs 1 off-street parking space per rented bedroom, and it may not add a separate kitchen for guests.[9]
A parcel with a registered accessory dwelling unit cannot hold a tourist home.[9]
Once a tourist home application is complete, the City Clerk notifies everyone assessed for property within 300 feet.[7]
A tourist home keeps a guest list with names, contact details and dates of stay, available to the city on request.[7]
Two validated complaints within 12 months revoke a tourist home license for the rest of the license year.[7]
A vacation home rental posts a fire escape plan in each guest room and shows proof of insurance to the City Clerk.[6]
What Michigan asks wherever you host
These rules apply at this address whatever the city decides.
Michigan levies a 6% use tax on rooms or lodging offered to the public. A stay of more than one month by the same tenant owes none.[1]
Treasury's guidance puts private homeowners renting a house or a room under that tax, like hotels. A host who owes it registers with the Department of Treasury.[2]
Lodging furnished by a host already registered for use tax falls outside Michigan's definition of a marketplace facilitator sale.[3]
Renting the whole home for most of the year ends its principal residence status for property tax. Renting bedrooms while living in over half the home does not.[4]
What a guest pays on top of your nightly rate in Traverse City
Each layer is set by a different authority, and not all of them are collected by the platform.
| Layer | Rate | Remitted to |
|---|---|---|
| Michigan state use tax[1] | 6% | The state revenue department |
| Total on a taxable stay | 6% |
What the census counts
How much of Traverse City is already a second home
The Census Bureau counts 604 of Traverse City's 8,479 homes as vacant for seasonal, recreational or occasional use. That is 71 out of every 1,000. It ranks Traverse City 4th of the 5 Michigan cities on this site for the share of its housing stock kept for part-year use.
- Rank in the state
- 4th of 5
- Share of housing
- 71 per 1,000
- Median home value
- $415,400
U.S. Census Bureau, 2024 ACS 5-year estimates, tables B25004, B25001, B01003 and B25077.
Nearby and comparable
Where Traverse City sits among its neighbors
New Buffalo, MI
Allowed by zone
747 seasonal homes, 446 per 1,000 housing units.
New Buffalo short-term rental rulesSouth Haven, MI
License required
1,136 seasonal homes, 319 per 1,000 housing units.
South Haven short-term rental rulesAnn Arbor, MI
License required
425 seasonal homes, 8 per 1,000 housing units.
Ann Arbor short-term rental rulesDouglas, MI
Registration required
558 seasonal homes, 432 per 1,000 housing units.
Douglas short-term rental rulesFAQ
Traverse City short-term rental questions
How much is a Traverse City vacation home rental license?
Can I rent my whole Traverse City house in a residential district?
What is the fine for an unlicensed vacation home rental in Traverse City?
Sources
- Use Tax, Michigan Department of Treasury, read on October 2, 2026
- Treasury Update, Volume 1, Issue 2, February 2016, sharing economy and use tax on accommodations, Michigan Department of Treasury, read on October 2, 2026
- Marketplace Facilitator & Marketplace Seller FAQs, Michigan Department of Treasury, read on October 2, 2026
- Partial Principal Residence Exemption, Michigan Department of Treasury, read on October 2, 2026
- Vacation Home Rental License Application, City of Traverse City, City Clerk, read on October 2, 2026
- Codified Ordinances, Chapter 870, Vacation Home Rental License, City of Traverse City, read on October 2, 2026
- Codified Ordinances, Chapter 868, Tourist Homes, City of Traverse City, read on October 2, 2026
- Zoning Code, Section 1320.07, Definitions, City of Traverse City, read on October 2, 2026
- Zoning Code, Chapter 1332, R-1a and R-1b Low Density Residential Districts, City of Traverse City, read on October 2, 2026
- Zoning Code, Chapter 1338, HR Hotel Resort District, City of Traverse City, read on October 2, 2026
- Zoning Code, Chapter 1344, C-3 Community Center District, City of Traverse City, read on October 2, 2026
- Zoning Code, Chapter 1346, C-4 Regional Center Districts, City of Traverse City, read on October 2, 2026
This page is not legal advice. It summarizes the official sources listed on this page as they read on October 2, 2026. Rules can change after that date, so check with the issuing office before you apply or publish a listing.
Before you list
Free tools for new hosts
Short-term rental agreement generator
Parties, dates, rent, deposit checked against your state's cap, and the house rules clauses you enforce. A signed-ready PDF for direct and Vrbo bookings.
Airbnb host fee calculator
What Airbnb takes on a booking under the 15.5% host-only fee or the old split fee, what the guest pays on top, and the payout that reaches you.
Airbnb profit calculator
Nightly rate, occupancy, Airbnb fee, management, mortgage, taxes and depreciation. You get cash flow, cash-on-cash return and what is left after the IRS.
Airbnb cleaning checklist generator
Build a printable turnover checklist by room, with restock, photos to take and a place for the cleaner to sign. Free PDF, no sign-up.