Suttons Bay Has Two Rental Permits. Your Address Only Tells You Half the Story.

If you are shopping for a short-term rental in Suttons Bay, the first question your Realtor should ask is not what the house rents for last summer. It is which government regulates it.

That sounds like a formality. It is not. Suttons Bay is both a village and a township, and the two run entirely separate short-term rental programs with different caps, different math, and different odds of ever getting a permit at all. A house two blocks apart from another can fall under completely different rules, and nothing on a listing sheet tells you which one you are buying into. The only way to know is to check the parcel against the actual boundary line, and most buyers do not think to ask until after they have already fallen for the house.

Here is the part that should change how you shop: in both jurisdictions, the rental permit does not survive the sale. Whatever income the current owner is generating dies at closing. You are not buying a rental business. You are buying a house and a fresh application.

Two Governments, One Name on the Mailbox

The Village of Suttons Bay is a small, incorporated municipality with its own council, its own zoning, and its own short-term rental ordinance. Suttons Bay Township wraps around and beyond the village, governed separately, with its own zoning administrator and its own permit system. A property with a Suttons Bay mailing address could sit inside either one, and the rules could not be more different.

Here is how the two compare, side by side:

The village is not accepting new applications at all right now. It capped permits at 45 several years ago but was already sitting on 53 active licenses when the cap took effect, so the village decided to grandfather the excess and let the number shrink naturally as owners sell, stop operating, or let their permits lapse. Until the total drops to 45, no new permit gets issued, no matter how strong your application is or how well the house is set up for guests.

The township took a different path. It runs its own annual cap of up to 150 permits, charges a $200 yearly fee, and opens a defined renewal window each fall, October 1 through February 28. New permits are still possible there. But the rule that trips people up is the same one that trips people up in the village: the permit belongs to the person who holds it, not the address. Sell the house, and the buyer starts over.

Why "Non-Transferable" Should Worry You More Than Any Inspection Finding

Buyers underwrite these purchases the way they underwrite any income property. They look at last year's booking calendar, average nightly rate, and occupancy, and they build a return on that trailing performance. That number is fiction the moment you understand how the permit works.

In the village, a seller can be running a fully licensed, cash-flowing rental right now and you can still be denied a permit the day after closing, simply because the village is not issuing new ones. You would be buying a house that cannot legally operate the way it is being marketed to you, at least not until the license count works its way down to 45. There is no workaround in the ordinance for a buyer who wants to keep the business running exactly as-is.

In the township, the picture is less dire but still requires action. You are not locked out the way the village locks out new applicants, but you are not automatically stepping into the seller's operating history either. You apply as a new operator, inside the October through February window, competing for space under the same annual cap as everyone else. Miss the window, or apply after the township's allotment for the year is spoken for, and you are waiting until the following cycle.

Either way, the number on the seller's income statement is not a number you can rely on. It describes a business that legally ends at closing. What matters is whether you, as the new owner, can get a permit issued in your name, and on what timeline.

The Rule Nobody Mentions at the Open House

Both the village and the township enforce a provision against what the ordinances call keyholing, which is letting short-term guests use a separate, privately owned waterfront parcel for beach or dock access that is not part of the rental property itself. It is a common setup in older Leelanau lake communities, where a cottage owner also holds a small deeded strip of shoreline down the road. If a listing advertises "association beach access" or "shared waterfront," that access needs to be verified against the STR ordinance before you assume guests can legally use it. A pretty photo of a private beach means nothing if the township considers it a use the permit does not cover.

Complaints in both jurisdictions route through a 24-hour hotline operated by Host Compliance, a third-party monitoring service the township and village both use to track violations, which gives enforcement real teeth rather than relying on a neighbor calling the clerk's office during business hours.

How the Rules Got This Tight

The village's ordinance did not start out this restrictive. A 2022 planning study commissioned by the village found 61 operating short-term rentals at the time, representing 13 percent of the village's total housing stock, and recommended the council consider capping the total closer to 25 to protect the year-round housing supply. The council settled on 45 instead, phased in through attrition rather than forcing anyone out immediately, which is how the village ended up temporarily grandfathering 53 permits against a 45 target.

The township's ordinance has its own history. Suttons Bay Township was the first municipality in Leelanau County to adopt a short-term rental ordinance, back in 2016, and it became something of a template for neighboring townships as they wrote their own rules. The township revised its ordinance again in December 2023, expanding it to cover the entire township rather than just the residential zoning district, and adding occupancy limits and a requirement that owners notify neighbors before operating.

None of this is unique to Suttons Bay. Michigan has no statewide licensing system for short-term rentals, and a bill that would standardize the rules across the state, House Bill 4722, has been debated for several legislative sessions without becoming law. Until or unless something like it passes, every township and village in Leelanau County keeps writing its own version of these rules, and buyers keep discovering the differences the hard way.

What to Actually Do Before You Write an Offer

A few habits protect you here better than any amount of listing photos or booking screenshots:

• Confirm the parcel's exact jurisdiction with the county or the local zoning office before you assume village or township rules apply. Mailing addresses cross boundary lines constantly.
• Ask directly whether the seller's current permit is village-issued or township-issued, and treat the answer as informational only. It will not transfer to you either way.
• If the property sits in the village, assume you cannot get a new permit right now and plan your purchase around that reality, not around the seller's current income.
• If the property sits in the township, check where the annual permit count stands and plan your application for the October through February window.
• Review any waterfront or beach access claims against the keyholing rule before counting on them as a rental amenity.
• Budget for Michigan's 6 percent use tax on stays under 30 days as part of your operating math, separate from the local permit fee.

A Straight Answer or Two

Can I just wait and see if a village permit opens up? Possibly. The village cap is being reached through attrition, meaning permits lapse as current holders sell, stop renting, or let their license expire. There is no published timeline for when the count will reach 45.

Does buying a house with an existing township permit help my application at all? Not automatically. The permit does not transfer with the sale, so you apply as a new operator inside the standard window regardless of what the previous owner held.

Is there any chance state law changes this before I buy? It is possible but not something to plan a purchase around. Proposed state legislation has been debated in past sessions without passing, and local ordinances remain the operative rules for now.

If you are weighing a Suttons Bay property with rental income in mind, the permit question needs to be settled before the purchase agreement, not after. Leelanau Living Realty Group works these jurisdiction lines every day, from the village's attrition math to the township's application calendar, and our rental management team can help you understand what a specific parcel can and cannot legally do before you fall for the house. Take a look at the current Suttons Bay neighborhood page to start, or give us a call. Relax. We got this.