In New Buffalo, the Rental Permit Doesn't Close With the House

On October 19, 2026, New Buffalo City Manager Darwin Watson sent the City Council a memo that fits on half a page. It said Chapter 11 of the city code gives short-term rental permits a twelve-month "redemption period" after a property is conveyed, and that the same window applies after a permit is revoked. His recommendation was to remove it.

The Council put it on that night's agenda as a first reading. The city's 2026 meeting calendar lists the November Council meeting for the 16th. According to the draft ordinance, it takes effect 20 days after enactment or on publication, whichever comes later. If you're buying or selling a house in the City of New Buffalo and the listing mentions rental income, check where this amendment stands before you sign anything. In this city, a rental permit doesn't transfer to the buyer at closing. What the buyer gets is a deadline, and this amendment changes how that deadline works.

The sale ends the permit

Under Chapter 11, Section 11-3 of the city code, a short-term rental permit becomes invalid in three situations. It expires one year after it's issued, it's revoked, or "the property to which the permit applies is conveyed to another party." That third rule is already in effect. Right now, the next sentence gives a new owner a way back: a permit that ends at conveyance "can be renewed so long as the application is submitted within 12 months."

The proposed replacement text in the October 19 packet keeps all three ways a permit can end and drops the renewal sentence.

Everything else in the section stays the same, including the annual inspection, the local agent requirement, and the rule that "no permit shall be issued or renewed unless the owner is current" on property taxes, utility bills and other amounts owed to the city, "regardless of whether they relate to the rental unit." For a buyer, that means a past-due balance on any property they own in the city can hold up the permit on the new one.

Grandfathered rentals have the most riding on this

The timing matters most for one group of homes. New Buffalo adopted a moratorium on new short-term rental applications on May 18, 2020, and extended it until December 13, 2021. Then Ordinance 253 took effect. It banned short-term rentals in the R-1, R-2 and R-3 residential districts, except for units already registered, which were allowed to continue as nonconforming uses. Owners challenged the rules in federal court. On December 14, 2023, the Sixth Circuit affirmed judgment for the city on the substantive due process, takings and Michigan Zoning Enabling Act claims that were appealed.

That means a short-term rental in a residential district today is almost always one that existed and was registered before the ban. No new ones can be created there. The ordinance says the right to operate "is not impaired by any transfer of ownership," and adds that "new owners are responsible for obtaining renewal permits in accordance with the processes provided in Chapter 11."

The ordinance also says when that right is lost. A unit is deemed abandoned if it isn't rented for a short-term stay within 12 months, or if its permit "expires, terminates, or becomes invalid" and no new or renewal permit is obtained within 12 months. After a revocation, the deadline is 12 months or 6 months after the ineligibility period ends, whichever is later. When a permit ends because the property is sold, the zoning ordinance's 12 months and Chapter 11's 12-month renewal window have matched. The October amendment only changes Chapter 11, Section 11-3. Ordinance 253 sits in the zoning ordinance and keeps its own wording. If the amendment is adopted, those two documents will describe the period after a sale differently. A buyer should ask the city and their own attorney how the two fit together for a specific address before the purchase price assumes any rental income.

The city's Master Plan, adopted November 13, 2018, shows how many homes this touches. Its community profile counts 852 of the city's 1,667 residential units as vacant, compared with 887 occupied households, and it attributes part of the city's population loss to homes being converted into summer houses and rentals. In a city where about half the housing isn't anyone's year-round home, the paperwork behind a rental affects pricing on a lot of listings.

Downtown permits are decided one address at a time

Buyers who can't get a permit in a residential district often look downtown. The city's zoning ordinance, effective August 19, 2024, describes the Central Business District along North Whittaker Street as a place for commercial ground floors with homes or offices upstairs. It lists short-term rentals as special uses there, which means each one needs its own permit and hearing. On November 17, 2025, the Council voted 5-0 on second reading to approve a zoning amendment that also changed the use table. It dealt with existing single-family homes in the General Commercial District. Before you rely on any district-wide reading of the table, confirm how a particular parcel is treated today.

Recent decisions show how the case-by-case process plays out:

• 10 N Whittaker Street: On October 20, 2025, the City Council approved a special use permit 5-0 for short-term rental use of the upstairs apartment.
• 105 E Water Street: On February 3, 2026, the Planning Commission recommended it 3-0. The request had been tabled earlier to settle whether more parking was required.
• South Whittaker Street, July 2026: At its July 7, 2026 meeting, the Planning Commission heard two requests to rent dwellings above or behind businesses. It tabled one until more information was provided and voted 5-0 to deny the other.

These decisions mean a mixed-use building downtown doesn't come with rental rights just because of its location. Each permit depends on a hearing, the parking available and a vote. Unlike the grandfathered homes, these permits are also bound by the same Chapter 11 rule that a permit ends when the property changes hands.

What a permit costs to hold

Whatever the outcome in November, a short-term rental in the city comes with recurring costs, plus charges that apply only in certain situations. The city's fee schedule lists these:

• $75 short-term rental registration
• $300 City Service Fee for a homestead property, or $1,300 for a non-homestead property
• $200 inspection
• When they apply: $200 for a complaint inspection, and $100 or $200 late registration and reinspection fees, depending on tier
• For a new special use application: $600 regular or $750 commercial

Chapter 11 also requires a local agent, a person who lives within 20 miles of the city limits. An owner can serve as the agent only while living within that distance. The agent has to inspect the unit at least once a month and keep the checklists for two years. Each bedroom needs a smoke alarm, and the unit needs carbon monoxide detectors and fire extinguishers. The owner also has to send the city a reservation summary every time the property is rented. Under Ordinance 253, a year without those summaries counts as conclusive evidence that a grandfathered rental has been abandoned. For a seller, those summaries are the paper trail showing the rental has stayed active.

The township next door paused new rentals too

New Buffalo Township surrounds the city, and its board has also restricted short-term rentals. According to WSJM, the Township Board of Trustees approved a one-year moratorium on new short-term rental properties in late October 2026 and scheduled a town hall on the issue for November 9 at the township public safety building at 18959 US-12. Township Supervisor Michelle Heit told WSJM that rentals are now "popping up in clusters" in residential areas. She said the board wants to write short-term rental rules into the township's zoning ordinance, which doesn't address them now. That's a change from September, when we described the township side of Union Pier as having no cap on rental permits.

So a buyer who learns that a city property's permit ends at closing will find that new short-term rentals are also on hold for a year across the township line.

What to confirm before you write or accept an offer

1. Whether the Chapter 11 amendment was adopted at a second reading, and its effective date. The City Council meetings page posts agendas and packets.
2. The property's zoning district, and whether its rental is a grandfathered nonconforming use or a special use permit.
3. The current permit's issue date and expiration date, since both affect how much time a buyer has after closing.
4. Whether reservation summaries have been filed consistently for the past 12 months.
5. Whether the buyer owes the city anything on any property, because that can block a permit from being issued or renewed.
6. Who will serve as local agent within 20 miles once the seller is no longer involved.

This post is general information about posted city rules and isn't legal, tax or financial advice. Before you rely on rental income in a purchase or sale, confirm how these ordinances apply to your property with the City of New Buffalo and a qualified attorney.

If you're selling a New Buffalo home that has rental history, or considering one that does, Meghan Maddox can help you collect the permit dates, reservation records and zoning details before you agree on a price. Request a Free Home Valuation, and we'll look at the rental permit along with the house.