Hello Michagoans!

It seems we caused a lot of confusion with our recommendation on Short Term Rentals (STR’s) and for that we apologize. Because of that confusion we will defer any further action until we have another discussion on the topic at our annual meeting next July.

Before then here is some perspective to think about prior to next year’s meeting.

Clarifications

- We are not recommending a ban on rentals. Rentals have always been allowed and will continue to be allowed.

- We agreed, at the last annual meeting that while renting should be allowed, it needed to be controlled. We tried to address that issue with our recommendation.

- The recommendation was intended to simply put a rental process in place that maintains Michago as the place we have always enjoyed - quiet, peaceful, laid back, neighborly - while allowing rentals on a controlled basis.

Current Situation

Over the years renting has been done occasionally by owners and it hasn’t been a burden to the Michago infrastructure or other owners. It is also what we believe the bylaw terminology “from time to time” intended. Recently however, we have had members expand that into a business (which the Michago bylaws prohibit) by renting their cottages much more frequently through services like Airbnb, VRBO, Evolve, and others. Which is done solely for the owner’s financial benefit without regard for the impact it has on the Michago infrastructure, their neighbors, etc. The board believes this is well beyond what was intended in the current bylaw wording of “from time to time”.

Rental Fee – Maintaining Michago

A rental fee, paid to Michago, was suggested to curtail costs associated with maintenance and upkeep because of the additional use of Michago’s resources and infrastructure by renters. The inclusion of this fee was understood by many, but poorly received by some. There are several reasons that this fee seems appropriate and necessary for a balanced approach to association dues. Renters add wear and tear to Michago which the entire membership, renters and non-renters, currently pays to maintain. As you know, we have regular discussions and concerns about the annual dues paid in Michago, how much they are, what they are used for, etc. A fee for the privilege of renting and using Michago resources seems like a fair way for everyone to support the upkeep of Michago.

Crowding

A topic mentioned at last year’s meeting was the “crowding” or significant increase in the number of people on the beach and in Michago in general compared to previous years. Renting has a direct impact on this. Historically, most cottages are used by owners, their families, and friends a few weeks each year. The addition of renting cottages that would generally be empty increases traffic and the number of persons using the beach, etc.

Need to Establish a Rental Process

At last year’s meeting everyone was in complete agreement that we shouldn’t allow rental companies to purchase in Michago for the purpose of renting. And we believe there is no difference between a rental company purchasing in Michago and an owner renting in the same or higher volume of weeks as a rental company would.

Short Term rentals continue to be an issue across the state and nationally and our research indicates that the associations most successful in addressing the issue put controls in place early on before the situation got out of hand. If we don’t get it under control now, it will only get worse. Remember every time a cottage goes up for sale the first question is the prospective buyer asking if renting is allowed in Michago.

Having the bylaws state that renting is not allowed for the first 3 years of new ownership and then having a maximum number of allowed rental weeks per year will significantly discourage both rental companies and others from buying in Michago primarily for the purpose of renting and generating business rental income.

Renters impact everyone in Michago and the more renters there are the greater the impact.

Next Steps

- Discuss and decide if we will have a ban on renting following a cottage sale (not a transfer through inheritance). Should we have one and if so, how many years?

- Discuss and decide what the maximum annual number of rental weeks will be.

- Decide if we will have a fee for the privilege of renting in Michago and if so, what the weekly annual dollar amount will be.

Hopefully we have a meaningful discussion next July, clear up any confusion and can vote on this important topic shortly after that.

Thank you,

Michago Board of Trustees