Rental Investment Guide

Saugatuck

Short-term & long-term rental regulations, fees, and investor resources for Allegan County, Michigan.

Updated May 2026
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City Hall
269-857-2603
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Directions
102 Butler Street, Saugatuck, MI 49453
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City Website
www.saugatuckcity.com

Area Overview

The City of Saugatuck sits on the south side of the Kalamazoo River where it meets Lake Michigan, in northwestern Allegan County. With roughly 900 year-round residents, the city expands many times over each summer as Chicago, Grand Rapids, and Detroit visitors crowd Butler Street, Oval Beach, and the Kalamazoo Lake harbor. Housing stock is dominated by older single-family cottages and Victorian homes, much of it inside the City’s local Historic District [1].

Short-term rentals are heavily regulated. Under Ordinance 240229-B (adopted February 29, 2024) and Chapter 99.5 of the City Code [2], every STR requires an annual City license and a fire inspection — and six residential (R-1) zoning districts are now subject to firm permit caps totaling 100 licenses [3]. A 2026 amendment (Ordinance 260209-A) adjusted renewal timing, the application window, and limited enforcement discretion [4]. STR licenses do not transfer with property sale [3]. Long-term rentals (31+ days) are not subject to a separate City registration program — they’re governed by state landlord-tenant law and the City’s zoning ordinance [5].

Quick Status Summary

Short-Term Rentals CAPPED

Annual license required for any rental under 31 days. The license fee is $540, plus a fire inspection, with a $175 reinspection fee on failure [3]. Six R-1 residential districts are now hard-capped at 100 total licenses combined (67 / 10 / 7 / 11 / 3 / 2); the City is still accepting applications in other zoning districts [3]. Licenses are non-transferable — a buyer cannot inherit a seller’s license [2].

Long-Term Rentals ALLOWED

No City registration program for long-term rentals (31+ days). LTRs are governed by Michigan landlord-tenant statute and the City’s underlying residential zoning [5][6]. Verify the parcel is in a district that permits dwelling use; for ADU-only rentals, see Special Regulations.

Rental Regulations

1 Where STRs Are Allowed (Zoning)

STRs are permitted citywide where they meet Chapter 99.5 licensing standards [2] — but six R-1 residential districts are hard-capped, and ADU-only STRs need special land use approval [3].

Capped R-1 districts (no new licenses until an existing one expires or surrenders):

  • Community Residential R-1: max 67 licenses
  • Peninsula West R-1: max 10
  • Maple Street R-1: max 7
  • Peninsula South R-1: max 11
  • Peninsula North (Duneside) R-1: max 3
  • Peninsula North (Riverside) R-1: max 2

Other zoning districts are not capped and continue to accept applications [3]. The full zoning map and capped-district boundaries are on the City zoning map PDF.

City of Saugatuck — open Zoning Map PDF

Click the seal to open the 2024 City of Saugatuck Zoning Map (PDF).

🗺 Zoning Map (PDF)📄 Chapter 99.5 (Code Library)📞 Planning & Zoning Dept
2 Registration & Permit Process

Submit a completed STR License Application — paper application — to City Hall at 102 Butler Street with the $540 annual fee [3]. Renewals use a separate renewal form and must be filed at least 30 days before the current license expires; renewing late forfeits cap-district eligibility if the license lapses while a cap is in effect [3].

New license applicationSTR License Application (PDF)
Renewal applicationSTR Renewal Application (PDF)
Submit toCity Hall, 102 Butler St., Saugatuck, MI 49453
License term1 year from issuance
Renewal deadline≥30 days before expiration [3]
TransferabilityNon-transferable; void on ownership transfer (limited prior-approval exceptions in Chapter 99.5) [3]
For investors: A buyer of an STR-active property in a capped R-1 district cannot inherit the seller’s license. Unless they qualify for the limited transfer exception under Chapter 99.5 (prior City approval required), the buyer must wait for an available license through the City’s annual notification/issuance policy [7].
📄 STR Application (PDF)📄 STR Renewal (PDF)📞 Call City Hall
3 Fees & Penalties

Saugatuck STR fees are flat (not per-bedroom). The same $540 applies to renewal as to a new license [3].

Annual STR license fee$540
Fire inspection (initial)Included in license fee
Failed reinspection fee$175 per reinspection [3]
Operating without a valid licenseOrdinance violation under Chapter 99.5 — civil penalties + injunctive relief [2]
False reporting about an STRCode violation under Chapter 99.5 [2]

Michigan Use Tax applies to rentals of 31 nights or less; the guest pays. Owners are responsible for collection/remittance when not using a platform that does it for them [2].

📄 Ordinance 240229-B (PDF)📄 2026 Amendment 260209-A (PDF)
4 Inspections & Safety Requirements

Every STR is inspected by the Saugatuck Township Fire District before a license is issued, and the Fire District sets the maximum occupancy based on its inspection [3]. Occupancy is capped by ordinance at 2 persons per bedroom plus an additional 2 per finished floor, not to exceed 12 total persons [3].

Other safety requirements under Chapter 99.5 [2][8]:

  • Rental insurance: required for all STRs.
  • Good Neighbor Guide must be displayed inside the rental — it covers noise, trash, parking, fireworks, and emergency contacts.
  • Trash: at least one outdoor garbage container and one recycling bin; if occupancy is 6 or more, at least two garbage containers.
  • Fireworks: the license holder must prohibit use by occupants and visitors.
  • Advertising: every listing (Airbnb, VRBO, print, web) must include the City-issued license number.
📄 Good Neighbor Guide (PDF)📄 Ordinance 240229-B (PDF)🚒 Saugatuck Township Fire District
5 Operating Rules (Occupancy, Quiet Hours, Parking, Visitors)

STR operators are bound by Chapter 99.5 [2], the City’s amended noise ordinance (240229-C) [9], and the Good Neighbor Guide [8] in addition to standard Michigan property law.

  • Occupancy ceiling: 2 per bedroom + 2 per finished floor, never more than 12 total [3].
  • Visitor limit: up to 1.5× the maximum occupancy, allowed only between 7:00 AM and 11:00 PM [3].
  • Noise: ordinance 240229-C updated quiet-hour and decibel definitions to give the public a clearer threshold [9].
  • Trash placement: follow the Good Neighbor Guide for set-out and pickup days [8].
  • Advertising: license number must appear in every listing [3].
  • Fireworks: use by guests/visitors is prohibited; owner is responsible for enforcement [3].
📄 Noise Ordinance 240229-C (PDF)📄 Good Neighbor Guide (PDF)
6 Local Agent / 24-Hour Contact & Complaints

License holders must designate a local agent who can respond to ordinance violations within 2 hours [3]. The agent’s name and phone number are public in the City’s BS&A property record and in the quarterly STR roster [3].

📞 24/7 STR Hotline🌐 Online Complaint Portal🔍 BS&A Lookup
7 Permit Caps, Recent Changes & Notification Policy

The City rebuilt its STR framework in 2024 and re-tuned it in early 2026.

  • February 29, 2024: City Council adopted Ordinance 240229-B, replacing the prior STR certificate framework with annual licensing, fire inspections, and the modern Good Neighbor Guide [2].
  • February 29, 2024: Companion Ordinance 240229-C clarified the City’s noise rules to give residents and operators an objective threshold [9].
  • 2024-2025: R-1 caps phased in (67/10/7/11/3/2 = 100 licenses total in capped districts) [3]. Existing STRs in those districts retained eligibility so long as they continued renewing on time.
  • February 9, 2026: Council adopted Ordinance 260209-A, which adjusted license renewal date, application window timing, a one-time amnesty provision for license holders, and enforcement discretion [4].
  • Ongoing: At least once a year the City publishes a Short-Term Rental License Notification and Issuance Policy describing when caps have openings and how the City selects from applicants [7].
⚠ Investor takeaway: In capped R-1 districts, you should not underwrite a Saugatuck STR play around the seller’s current license. Most R-1 STR licenses do not convey on sale; the buyer must either qualify for the City’s limited transfer exception or wait for a slot through the annual notification process. Confirm cap availability before signing.
📄 STR License Notification & Issuance Policy (PDF)📄 2026 Amendment 260209-A (PDF)
1 Where LTRs Are Allowed (Zoning)

Long-term rentals (31+ days) are permitted wherever the underlying zoning district allows dwelling use under Chapter 154 (Zoning Code) [5]. Unlike short-term rentals, LTRs are not licensed by the City, do not pay an annual fee, and are not subject to the R-1 caps that restrict STRs.

If a parcel is in a residential district (R-1A, R-1B, etc.) and the dwelling use is established, an LTR lease of 31+ days is allowed by right. For mixed-use, commercial, or non-conforming parcels, confirm the residential use is permitted (or grandfathered) with the Director of Planning & Zoning before leasing.

City of Saugatuck — open Zoning Map PDF

Click the seal to open the 2024 City of Saugatuck Zoning Map (PDF).

🗺 Zoning Map (PDF)📄 Chapter 154 Zoning Code📞 Planning & Zoning Dept
2 Registration & Permit Process

The City of Saugatuck does NOT operate a separate long-term rental registration or licensing program. Long-term rentals — leases of 31 days or longer — require no City application, no annual fee, and no City inspection. (This contrasts with neighboring Saugatuck Township and Douglas, both of which DO register LTRs separately; do not confuse them.)

LTR landlords are still subject to:

  • Michigan landlord-tenant statute (MCL 554.601 et seq.) and the summary proceedings act for evictions [6].
  • The City’s underlying Chapter 154 zoning rules — residential use must be permitted on the parcel [5].
  • The City’s general noise, nuisance, trash, and parking ordinances (these apply to any occupant, owner or tenant) [9].
  • The Michigan Truth-in-Renting Act and security-deposit rules under state law [6].
📄 MI Tenants & Landlords Guide (PDF)📄 Chapter 154 Zoning Code📞 Confirm with City Hall
3 Fees & Penalties
LTR registration feeNone — no City LTR registration program
LTR inspection feeNone — not required by City
Operating an unlicensed STR (lease shorter than 31 days)Chapter 99.5 violation — civil penalties + injunctive relief [2]

The 31-day threshold is strict: a single lease shorter than 31 days converts the rental into a short-term rental and triggers the full Chapter 99.5 licensing requirement, including cap-district eligibility checks [2].

4 Inspections & Safety Requirements

The City does not inspect long-term rentals. Owners are still responsible for compliance with the Michigan Residential Code (smoke detectors, GFCI in wet areas, egress windows, etc.) and any open code-enforcement matters on file with the Saugatuck Township Fire District or the City Building Department [10].

Practical pre-lease checklist for LTR owners:

  • Working smoke detectors on every floor and in/near each sleeping area.
  • Functioning CO detectors if the home has any fuel-burning appliance or attached garage.
  • No open Building Department permits or stop-work orders on the property (check the BS&A property record).
  • Lead-paint disclosure (federal) for any home built before 1978 — applies to most older Saugatuck cottages.
🔍 BS&A Property Lookup📞 City Building Dept
5 Tenant Rights & Eviction Resources

Michigan landlord-tenant relationships are governed by the Truth-in-Renting Act (MCL 554.631 et seq.) and the summary proceedings act (MCL 600.5701 et seq.). The State Bar / Legislature publishes a free Practical Guide for Tenants and Landlords covering leases, deposits, repairs, and the eviction process [6]. These statewide rules apply in Saugatuck and are not modified by City ordinance.

📄 MI Tenants & Landlords Guide (PDF)🌐 MI Renters’ Rights (AG)

Special Regulations

Saugatuck has a city-level Historic District Commission, an Accessory Dwelling Unit pathway with specific STR rules, and reliance on the Kalamazoo Lake Sewer & Water Authority. All three matter when buying or renovating a Saugatuck rental property.

★ Historic District Commission (HDC) Review

Most of downtown Saugatuck and large portions of the surrounding residential neighborhoods sit inside the City’s Local Historic District [1]. Exterior alterations — siding, windows, roof, porches, paint color in some cases, signage, fences — generally require a Certificate of Appropriateness from the HDC under Chapter 152 [11] before the Building Department will issue a permit. Plan extra calendar time for any renovation aimed at supporting STR licensing or LTR habitability upgrades.

🌐 Historic District Commission📄 Chapter 152 (Historic District Code)
★ Accessory Dwelling Units (ADUs) & STR Use

ADUs are allowed on residential lots with an existing single-family home, and they are NOT counted toward the R-1 STR caps [3]. There are two compliant ways to use an ADU as an STR:

  1. Rent both units together under one STR contract. No special land use approval required. Both units must hold their own STR licenses.
  2. Rent the ADU independently while the owner lives in the main home. Requires special land use approval from the Planning Commission under Section 154.092(J) [3]. Owner must reside on the property; ADU must hold its own STR license.

This is the only pathway that adds new STR keys in a capped R-1 district without waiting for the cap to open.

🌐 ADU & STR rules (City page)📞 Planning Commission
★ Sewer, Water & Property Records

City water and sewer are provided by the Kalamazoo Lake Sewer & Water Authority (KLSWA), a joint authority serving Saugatuck, Douglas, and parts of Saugatuck Township [12]. Tap fees, connection requirements, and outstanding water bills (which can attach as liens) should be confirmed with KLSWA before closing on any rental purchase. For tax history, assessor data, permit history, and the current STR-certificate field for a parcel, use the Saugatuck BS&A site [13].

🌐 KLSWA — sewer & water🔍 BS&A Property Lookup

Official Resources

Ordinances
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Ordinance 240229-B — STR License Ordinance
Adopted 2/29/2024; codified at Chapter 99.5
📜
Ordinance 260209-A — 2026 STR Amendment
Renewal date, application window, amnesty, discretion
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Chapter 99.5 — Short-Term Rentals (Code Library)
Codified ordinance
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§ 99.57 — STR Standards & Regulations
Operating-rules section
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Ordinance 240229-C — Noise Ordinance Update
Quiet hours & decibel definitions
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Chapter 152 — Historic District Regulations
HDC review for exterior alterations
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Chapter 154 — Zoning Code
City zoning ordinance (ADUs, R-1 districts)
Forms & Applications
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STR License Application (PDF)
New annual STR license — submit to City Hall
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STR Renewal Application (PDF)
File ≥30 days before expiration
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Good Neighbor Guide (PDF)
Required to be displayed inside every STR
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STR License Notification & Issuance Policy (PDF)
How the City fills capped-district openings
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Quarterly STR Roster — Feb 2026 (XLSX)
Active STR list with responsible parties
Maps
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City of Saugatuck Zoning Map (PDF, 2024)
Capped R-1 districts highlighted
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Allegan County GIS Parcel Viewer
Parcels, utilities, sewer, tax info
Portals & Lookups
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BS&A — Saugatuck Property Lookup
Tax, permit, STR certificate, local agent
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Host Compliance — STR Complaint Portal
Online complaint intake
Contact & Directions
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24/7 STR Complaint Hotline
269-442-4845
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Saugatuck City Hall
269-857-2603 — 102 Butler St.
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Allegan County Sheriff — Non-Emergency
269-673-3899
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Directions to Saugatuck City Hall
102 Butler St, Saugatuck
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City of Saugatuck Website
Main municipal site
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Planning & Zoning Department
Zoning verification, ADU questions
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Saugatuck Township Fire District
STR inspections & fire-safety
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Kalamazoo Lake Sewer & Water Authority
Sewer, water, tap fees
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Allegan County Environmental Health
Septic & well evaluations (county-wide)

Property Tax Treatment

i
Important for investors: A property used as a rental in Michigan is generally classified as non-homestead, which is taxed at the full local millage rate (no Principal Residence Exemption). Short-term rental income may also be subject to the Michigan Use Tax on transient accommodations. Consult a CPA before underwriting any deal — these are not opinions, they are starting points for your own tax research.
📊
Michigan Property Tax Guide
PRE, millage, transfer rules
🏛
Michigan Treasury
State tax info

Explore Rental Guides — Allegan County

Every municipality in Allegan County. Click any to view its rental guide — or request one if it’s not yet live. View the Allegan County hub →

STRs Allowed
STRs Capped/Limited
STRs Heavily Restricted
STRs Not Allowed
Unverified
Guide Coming Soon

Looking at a property in a different county? View all Southwest Michigan rental guides →

Looking at a property in Saugatuck?

Saugatuck STRs work — but only if you understand which R-1 cap district your parcel falls in, whether a license can transfer, and whether the HDC will green-light your exterior plans. I help investors and second-home buyers pressure-test deals against Saugatuck's actual rules before they're under contract.

Schedule a Consultation Call (269) 235-9910

Sources & Downloads

  1. 1
    City of Saugatuck — Historic District Commission https://www.saugatuckcity.com/historic-district-commission.html
    Local Historic District established 1981; HDC meets first Thursday at City Hall.
    Verified: 2026-05-11
  2. 2
    City of Saugatuck — Ordinance 240229-B (STR License Ordinance) https://www.saugatuckcity.com/uploads/1/3/3/9/133977444/ord_240229-b_short-term_rental_license_ordinance.pdf
    Adopted 2/29/2024; codified as Chapter 99.5. Establishes annual licensing, occupancy, advertising, trash, insurance, fireworks, and non-transferability rules.
    Verified: 2026-05-11
  3. 3
    City of Saugatuck — Short-Term Rentals page https://www.saugatuckcity.com/short-term-rentals.html
    Authoritative summary: $540 annual fee, $175 reinspection, 30-day renewal lead-time, cap counts for each R-1 district, occupancy formula (2/bedroom + 2/floor, max 12), 1.5× visitor rule (7am-11pm), 2-hour agent response, ADU rules, non-transferability.
    Verified: 2026-05-11
  4. 4
    City of Saugatuck — Ordinance 260209-A (2026 STR Amendment) https://www.saugatuckcity.com/uploads/1/3/3/9/133977444/ord_260209-a_short_term_rental_licensing_amendment.pdf
    Adjustments to renewal date, application window, one-time amnesty, enforcement discretion.
    Verified: 2026-05-11
  5. 5
    City of Saugatuck — Chapter 154 Zoning Code (Code Library) https://codelibrary.amlegal.com/codes/saugatuck/latest/saugatuck_mi/0-0-0-4355
    City zoning ordinance — residential districts (R-1A, R-1B, etc.) where dwelling use is permitted by right.
    Verified: 2026-05-11
  6. 6
    Michigan Legislature — A Practical Guide for Tenants & Landlords (PDF) https://www.legislature.mi.gov/publications/tenantlandlord.pdf
    Statewide landlord-tenant law, leases, deposits, eviction process.
    Verified: 2026-05-11
  7. 7
    City of Saugatuck — STR License Notification & Issuance Policy (PDF) https://www.saugatuckcity.com/uploads/1/3/3/9/133977444/short_term_rental_license_notification_and_issuance_policy.pdf
    Annual notification process for filling openings in capped R-1 districts.
    Verified: 2026-05-11
  8. 8
    City of Saugatuck — Good Neighbor Guide (PDF) https://www.saugatuckcity.com/uploads/1/3/3/9/133977444/copy_of_good_neighbor_guide__2_.pdf
    Required-display tenant-facing guide for STRs (noise, trash, parking, fireworks).
    Verified: 2026-05-11
  9. 9
    City of Saugatuck — Ordinance 240229-C (Noise Amendment) https://www.saugatuckcity.com/uploads/1/3/3/9/133977444/ord_240229-c_amendment_to_noise_ordinance.pdf
    Updated noise ordinance providing clearer quiet-hour and decibel rules.
    Verified: 2026-05-11
  10. 10
    City of Saugatuck — Building Department https://www.saugatuckcity.com/building.html
    Permit history, code-enforcement, Michigan Township Services contractor info.
    Verified: 2026-05-11
  11. 11
    City of Saugatuck — Chapter 152 Historic District Regulations (Code Library) https://codelibrary.amlegal.com/codes/saugatuck/latest/saugatuck_mi/0-0-0-4138
    Local Historic District requirements; Certificate of Appropriateness needed for exterior changes.
    Verified: 2026-05-11
  12. 12
    Kalamazoo Lake Sewer & Water Authority https://klswa.com
    Joint sewer-water authority for Saugatuck, Douglas, and parts of Saugatuck Township.
    Verified: 2026-05-11
  13. 13
    BS&A Online — City of Saugatuck https://bsaonline.com/?uid=126
    Parcel records, property tax, building permits, and active STR certificate field by address.
    Verified: 2026-05-11
How this guide is produced. This rental guide is researched and drafted with assistance from Claude, an AI model made by Anthropic, working from the official municipal sources linked in this page. AI can make mistakes — any fact that would materially affect a purchase or rental decision should be verified against the official source cited above and confirmed directly with the municipality. See an error? Email a correction.