Council advances Centertown short-term rental overlay on first reading with amendment to first-floor language

The Grand Haven City Council on Aug. 4 advanced an amendment to the city's zoning ordinance to allow short-term rentals by special land use in the Centertown overlay of the Neighborhood Mixed Use district. The proposal affects 23 parcels in the overlay and would require individual special-land-use approvals rather than allowing short-term rentals by right.

Planning staff described the background: in March an applicant asked to allow short-term rentals by right; the planning commission and the Downtown Development Authority discussed the change and recommended allowing short-term rentals only by special land use with standards. A planning commission subcommittee drafted standards and returned a recommendation to the planning commission in July; the commission supported the measure for first reading.

Council debate focused on balancing support for downtown commercial activity with neighborhood impacts. Several council members said they oppose short-term rentals in residential neighborhoods but support controlled short-term rental opportunity in commercial/commercial-overlay areas to encourage downtown vitality. Councilmember comments also emphasized avoiding future nonconformities when the broader Centertown vision plan is completed.

During first reading, council amended paragraph 3A of the proposed overlay ordinance to replace the original phrasing requiring "first-floor use for buildings fronting Seventh and Washington Avenue must be 100% retail commercial" with a wording that ties the requirement to the "usable area of the first floor." Councilmember Lowe moved the amendment; Councilmember McLaughlin seconded. The amendment passed on a roll-call vote (all present members voting yes). After the amendment, the introductory resolution passed on first reading; council set a second reading for two weeks.

Why it matters: The change allows a pathway for limited short-term rental use in a defined commercial overlay while preserving Planning Commission review and local conditions through the special land-use process. Staff noted the overlay affects 23 parcels but that not all parcels would necessarily qualify for a short-term rental permit because each application must meet standards in the ordinance.

Context and next steps: Council and staff said the overlay change is being advanced in parallel with a larger Centertown vision-plan update. Staff expects bids for the vision-plan consulting work back in mid-August, a recommendation to the DDA, and a process kickoff in November after expected state funding. Council members cautioned that the broader plan may produce different recommendations later; they expressed a desire to avoid creating nonconforming development through interim changes.