Ann Arbor ADUs may be rented long-term only by the unit not occupied by the owner, under UDC 5.16.4 and Housing Code Chapter 105. The 2024 short-term rental ordinance (Chapter 117) bans non-owner-occupied whole-house STRs in single-family residential zones, limiting STR use of an ADU to homestays where the owner remains on the property.
Ann Arbor layers three rules on ADU rentals. First, UDC Section 5.16.4 (Ord. 16-13, 2016) limits non-owner rental to one of the two units on the property — the owner must occupy the other. Second, City Code Chapter 105 (Housing Code) requires any unit rented to a non-owner to be registered with Rental Housing Services in the Building Department, pass a Rental Housing Inspection, and hold a current Certificate of Compliance. Inspections cover Michigan Residential Code life-safety standards and habitability. Third, Ann Arbor's 2024 short-term rental ordinance, codified in City Code Chapter 117 (Short-Term Rental Regulation), restricts STRs in residential districts. Under the 2024 framework, non-owner-occupied whole-house STRs are prohibited in R1, R2A, and R2B single-family zones; only owner-occupied homestays (the owner resides on-site during the rental) and grandfathered registered operators are permitted. Because UDC 5.16.4 already requires owner-occupancy of the ADU property, using the unrented unit as a homestay STR is the only practical short-term rental path. The City's 5 percent accommodations excise tax under Public Act 263 of 1974 (MCL 141.861) plus Michigan's 6 percent Use Tax on rooms (MCL 205.93a) apply to stays of less than 30 days. University of Michigan football weekends drive STR demand and enforcement attention.
Operating an unregistered rental is a Chapter 105 violation with fines and loss of Certificate of Compliance. Operating a non-owner-occupied whole-house STR in a banned zone is a Chapter 117 violation with escalating municipal civil infractions per Chapter 110 and possible STR registration revocation. Failure to remit accommodations tax exposes the operator to MCL 141.861 collection actions.
Ann Arbor, MI
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