Two houses, both listed as "New Buffalo, MI." Both a few minutes' walk from the beach. One can hold a short-term rental license indefinitely, renewed every three years without much drama. The other cannot get a new one, ever, no matter how the seller frames the listing or how many summers of Airbnb income the previous owner mentions in passing.

The difference has nothing to do with the house itself. It comes down to which side of a boundary the parcel sits on, a line that never shows up in listing photos and that most buyers never think to ask about because the address reads the same on either side of it.

That boundary is the line between the City of New Buffalo and New Buffalo Township, and if you are shopping for a property here with any intention of renting it, it matters more than square footage.

A City of 2.2 Square Miles, Surrounded

The City of New Buffalo covers about 2.2 square miles. New Buffalo Township wraps around it on three sides and extends north along the shoreline through Union Pier. From the street, the transition is invisible. There is no fence, no change in architecture, no sign that says you have crossed into a different regulatory regime. But you have, and the two sides have built almost opposite rulebooks for short-term rentals.

Here is the shape of that split:

Neither approach is wrong. Both were built by local officials responding to real pressure from residents and property owners. But they produce two very different investment pictures for a buyer who has not done the homework.

What the City Grandfathered, and What It Didn't

New Buffalo's city council imposed a moratorium on new short-term rental licenses in May 2020, then spent a year and a half working out what would replace it. The ordinance that passed in November 2021 drew a hard line: no new short-term rental permits in the city's three residential zoning districts, R-1, R-2, and R-3. New licenses remain issuable only in the central business, general commercial, and Waterfront Marina districts.

At the time the ordinance passed, roughly 150 homes in the city already held licenses, and those were grandfathered in. That detail matters for how you should read a listing. A grandfathered license runs with the property, not the person who applied for it, so a currently-licensed home keeps its rental standing when it sells. An unlicensed home in an R-1, R-2, or R-3 district, on the other hand, cannot pick one up after the fact under the current ordinance, regardless of what a seller's rental history spreadsheet shows you.

If a city listing advertises rental income, the first question is not what the income was. It is whether the license itself is active and attached to that specific address, because in New Buffalo's residential zones, that license is now a fixed and shrinking asset rather than something a new owner can apply for.

The Township Took the Opposite Approach, Then Tightened It

New Buffalo Township never closed the door the way the city did. Short-term and long-term rentals are both permitted township-wide, in any district that allows the dwelling type, under a license required by Chapter 332 of the Township Code. That license runs for 36 months following an inspection by the Building Department and carries a $500 fee.

But the Township made its own adjustment. An amendment adopted March 17, 2025 caps short-term rental licensing at one dwelling unit per parcel. For a buyer evaluating a property with a second unit, a carriage house, or an accessory dwelling somewhere in the Township, including in the Union Pier area, that cap is the number that actually determines the deal. A parcel that looks like it could support two rental income streams on paper can only be licensed for one, and that constraint did not exist before 2025.

The Township's openness to short-term rentals is real, but it is not unconditional openness. It is openness with a ceiling that a buyer needs to check parcel by parcel.

Why Lansing Hasn't Settled This For You

It is tempting to assume state law will eventually standardize all of this. It hasn't, and there is a legal reason the patchwork has held.

Michigan has no statewide short-term rental law. Regulation is left entirely to cities, townships, and counties under the state's home-rule tradition, and the Michigan Supreme Court settled the underlying authority question in Reaume v. Township of Spring Lake, ruling that a municipality can define a short-term rental as a non-permitted use under its own zoning code and exclude it from a residential district entirely.

Lawmakers have tried to override that local control more than once. House Bill 4722, which would have barred outright bans on short-term rentals, passed the Michigan House in 2021 but died without a Senate vote. A follow-up package built around House Bill 5438 stalled in committee in 2024. The latest attempt, House Bills 6026 and 6027, was introduced in Lansing on May 21, 2026 by Representatives Joey Andrews and Matthew Bierlein and would create a statewide registry and let local governments keep regulating short-term rentals as long as those rules stop short of an outright ban. As of this writing, that package remains pending in committee.

The pattern across three legislative sessions is consistent: state preemption keeps getting introduced and keeps failing to pass. Until that changes, whether your specific parcel can be rented short term will keep depending on which local government's ordinance covers it, not on any rule written in Lansing.

What to Actually Check Before You Assume Rental Income

Before you factor short-term rental income into an offer on anything near New Buffalo, walk through this list rather than trusting the listing description:

• Confirm whether the parcel sits inside the City of New Buffalo or in New Buffalo Township. The two are adjacent but governed separately.
• If it's in the city, ask which zoning district the parcel falls in and whether it already holds an active, transferable short-term rental permit. In R-1, R-2, and R-3, no license means no rental income until or unless the ordinance changes.
• If it's in the Township, confirm the property's status under the one-unit-per-parcel cap, especially if the parcel has more than one dwelling on it.
• Ask for the license number itself, not just a claim of rental history, and verify it against the current rental list maintained by the jurisdiction.
• Remember that both a new short-term license in the Township and a transferred license in the city typically require a fresh inspection at the point of sale. Budget time and, potentially, repair costs for that step.

None of this shows up in a photo gallery. It shows up in the ordinance, and it changes the math on what a property is actually worth to you as an investment rather than as a home.

A Few Questions Worth Asking Before You Write an Offer

Does a short-term rental license transfer automatically when a licensed city home sells? The license itself is tied to the property rather than the individual owner, so a home that holds an active city permit keeps that standing through a sale. It is still worth confirming the license is current and unexpired rather than assuming continuity.

Can I buy an unlicensed home in the city and apply for a new short-term rental permit? Not in the R-1, R-2, or R-3 residential districts under the current ordinance. New permits are limited to the central business, general commercial, and Waterfront Marina districts.

Is the Township's one-unit-per-parcel rule likely to change again? It was adopted in March 2025 as an amendment to an existing ordinance, and local rental ordinances in this region have shifted before. Treat the current cap as the operating rule today, not as a permanent guarantee.

Does Union Pier follow the city's rules or the Township's? Union Pier sits within New Buffalo Township, so it follows the Township's Chapter 332 licensing framework rather than the city's residential-zone restrictions.

The property itself will always matter. But in a market where the same town name covers two different rulebooks, the boundary line matters just as much, and it is the kind of detail that only shows up when someone who works this specific stretch of shoreline walks the parcel with you before you write an offer.

If you are weighing a purchase in New Buffalo or anywhere along Harbor Country and want a clear read on what a specific parcel can and cannot do, Wortman Group can walk the zoning and licensing details with you before you make an offer, not after.