EDITOR’S NOTE: This is the corrected version of this article, reflecting John Kern’s comments to the board. Kern does not own STRs in Bete Grise.

EAGLE RIVER — The Keweenaw County Planning Commission’s priority is currently to update the Master Plan, which expired in September 2023. While the commission obtained a one-year extension to finalize the update, there are challenges facing the commission that did not exist when the plan was adopted by the County in 2018.

One challenge is the purchase of more than 32,000 acres of timber forest land by The Nature Conservancy.

The other significant challenge, which has received the most discussion in recent meetings, is the ongoing issue of short-term rental properties and whether ordinances governing STRs should be amended. The topic was discussed at the regular Jan. 29 planning commission meeting.

During the public comment period, John Kern of Bete Grise addressed the board regarding the rise of STRs, offered for lease by several property owners.

Kern referred to a report published by the Western Upper Peninsula Planning and Development Region in saying the county is basically doubling every two to three years, he said, adding that, real estate prices are increasing, which is great for everybody, except that:

“We are now selling at almost no listing time,” Kern said, “which means that investors are grabbing up those properties. Homeowners who want to buy and have a home in the county are having a harder and harder time when the listing times are that short, even just to buy a camp — there’s almost no need to list your property; it’s going to sell.”

The WUPPDR document Kern referenced, a 215-page housing study and strategy report covering the six western counties of the Upper Peninsula, states that the number of STRs has increased greatly since 2016. Most of the increase has been due, not to new construction, but to converting existing housing units that were previously occupied by permanent residents.

The Regional Housing Study and Strategy report revealed that the vast majority of “vacant” housing units in Keweenaw County are in the “seasonal, recreational, or occasional use” category, which includes properties such as cabins/camps and second homes, as well as many properties used primarily as short-term rentals. These make up half of all housing units in the county and 88.1% of vacant units. The equivalent statewide percentages are 6.3% and 46.0%.

Consequently, as Kern pointed out, STRs have reduced the housing stock available to full-time residents, which can detrimentally impact community cohesiveness.

Yet, while STRs can have negative impacts on their surrounding communities, they also bring positive impacts as well. Another STR owner, Justin Burrus, pointed that out at the January planning commission meeting.

Burris, who owns one STR, located on the Gay-Lac La Belle Road, said he bought the property after it had been vacant for two years. He spent $100,000 renovating it, which he said, contributed that sum to the local economy. Burris said he purchased the house because he is a frequent visitor and there are not a lot of lodging options in the county. It is equivalent to two hotel units and is rated as a five-star STR which, he told the board generates about $200,000 annually to the local economy.

Burris’ point illustrates the findings of the WUPPDR report which found that STRs can have the positive effect of making possible major improvements to substandard or even blighted properties.

Also, the revenue from short-term rental fees can cumulatively be much higher than rent from long-term tenants, enabling a property owner to recover rehabilitation costs and still profit from the enterprise.

The study also found that STRs bolster the visitor economy and may be able to accommodate a number or type of visitors beyond what could be housed in traditional accommodations.

Many permanent residents, while not directly opposed to STRs, associate them with negative neighborhood impacts such as noise and traffic.

Planning Commission trustee Sara Heikkila, who is also the County Zoning Administrator, suggested a public meeting to get input on the question of zoning changes for STRs.

The public meeting is tentatively scheduled for Thursday, March 28.