Petoskey City Council is considering changes to its rental regulations that could impact the availability of affordable housing in the community. During the meeting on July 7, 2025, council members discussed a proposal that would allow hotels to offer subgrade residential units for long-term rentals. This decision has sparked debate among council members regarding its implications for workforce housing.

Council member DeMour raised concerns about the logic behind permitting hotels to rent out subgrade units while simultaneously restricting short-term rentals in the same areas. DeMour emphasized the pressing need for affordable housing and questioned why hotel spaces should be utilized for rentals when there is a significant demand for long-term workforce housing.

In response, city officials explained that the proposal aims to enhance the use of existing hotel spaces, particularly those that are below average grade, such as certain rooms in the Perry Hotel. The intention is to ensure that these spaces are compliant with the new regulations while also addressing the need for more lodging options in the downtown area.

The discussion highlighted a broader concern about balancing the needs for both short-term and long-term housing solutions in Petoskey. Council members expressed differing views on whether allowing hotels to offer long-term rentals would detract from the availability of housing for local workers.

As the council continues to deliberate on this matter, the outcome could significantly influence the housing landscape in Petoskey, particularly for those seeking affordable long-term rental options. The council's next steps will be crucial in determining how these regulations will shape the community's housing strategy moving forward.