Most people who fall for a cottage in Michiana Shores assume the town works like its neighbors. Rent it out a few summer weekends, cover the taxes, keep the place in the family. That assumption is wrong, and it is wrong in a specific, written-down way that shows up in the town's own zoning code.
Under Michiana Shores' base zoning, renting out a secondary residence is not a gray area. It is banned outright, on the books, as a "tourist home" use. The only way around that ban is a formal Special Use approval, granted case by case, house by house, through a public hearing process. If you are buying with rental income already penciled into your math, that math depends on a permit you do not yet have.
The Zoning Line That Surprises Buyers
The town's own council minutes lay out the starting position in plain language. The zoning code, in the section governing residential districts, treats short-term rental of a secondary home as a direct violation unless the owner has gone through the town's approval process. Town Council minutes from April 2020 describe it this way: rental of any secondary residence "is not, and has not, been a permitted use in Michiana Shores," and is called out explicitly as a "tourist home" violation under the zoning code's residential district section.
That is the default. Everything else, the Airbnb listings you might see for a Michiana Shores address, the VRBO calendar someone is already running, exists because that particular owner cleared a specific hurdle the town built in 2020 and revised again in 2023.
How a "No" Becomes a "Yes"
The town created a path out of the default ban with Ordinance 2020-02, which established what it calls the Short-Term Rental Permit Safety and Security Program. Getting a property from "not permitted" to "permitted" runs through the Board of Zoning Appeals first, then the Town Council, before a single guest ever books a night.
| Step | What Happens |
|---|---|
| Special Use application | Owner files a BZA Special Use request with the Building Commissioner, along with a filing fee and required attachments |
| BZA hearing | Owner must appear in person to answer questions from the Board of Zoning Appeals |
| Town Council review | If the BZA approves, the decision goes to the Town Council for a second hearing, and the owner must appear again |
| STR Permit application | Once approved, the owner files a separate annual Short-Term Rental Permit application |
| Annual renewal | The permit is not permanent. It renews every year through the Building Commissioner |
None of this happens quickly, and none of it happens automatically because a house is pretty or has water views. A buyer who closes assuming they can list the property the following weekend is planning around a process the seller may never have started.
What the Permit Doesn't Let You Forget
Clearing the Special Use hurdle does not mean the rules disappear. The permit comes with operating conditions that stay in force for as long as the owner keeps renting, and the town enforces them with real consequences. The short-term rental application spells out several of them directly:
- Three citations in a calendar year, from the Town Council, the Building Commissioner, or the Town Police Chief, and the permit is automatically suspended for twelve months
- A single instance of illegal activity at the property skips the three-citation grace period entirely and triggers immediate suspension
- No renting to any group under age 25 unless someone older than 25 is the named responsible party
- No parking of RVs, campers, or watercraft by short-term renters
- Fireworks are banned for renters at all times, with violations carrying a $1,000 fine
- No parking on the roadway at all, for anyone, because the streets are narrow enough that fire trucks and emergency vehicles need the full width to get through
That last rule is not specific to renters. It applies town-wide. But it matters more for an STR owner, since a guest who does not know the local norm is the owner's liability, not just an inconvenience.
The Name on the Map Isn't the Whole Picture
There is a second piece of local knowledge that shapes how much sense an STR investment makes here, and it has nothing to do with permits. Despite the name, Michiana Shores does not have lots that sit directly on Lake Michigan. Public beach access comes through shared stops like Beach Stop 37, which the town maintains jointly with the neighboring Village of Michiana across the state line, rather than through private lake frontage attached to individual homes.
That distinction is worth sitting with before anyone prices a rental around lake views or beach-out-the-back-door marketing. Homes here sit on wooded lots, many of them shaped by the town's own tree preservation rules, within walking distance of the water rather than directly on it. The premium buyers pay in Michiana Shores is a premium for quiet, mature trees, and proximity, not for private shoreline. If a rental pro forma assumes lakefront-level nightly rates, it is pricing something the property does not have.
The Golf Cart Detail That Trips Up Cross-Border Buyers
One more piece of Michiana Shores' regulatory texture matters if part of the appeal is the golf cart lifestyle that many Harbor Country towns share. The town revised its golf cart ordinance in April 2026, and the current version requires every cart operated on public streets to be registered with the town, driven only by a licensed driver, and carrying a $100 biannual registration fee that covers a two-year period with no proration for partial years.
The detail that catches new owners off guard is what happens at the border. Michiana Shores registration does not carry over into neighboring Long Beach. If you plan to drive your cart across that line, Long Beach requires its own separate two-year registration under its own rules. Two adjoining towns, two separate systems, and no shortcut between them. It is a small thing, but it is the kind of small thing that a buyer only learns about after they have already bought the cart.
What This Means If You Are Underwriting Rental Income
None of this means short-term rental income is impossible in Michiana Shores. Owners are doing it today, under permits the town has approved. What it means is that the income is conditional on a process, not guaranteed by the deed. A buyer comparing a Michiana Shores cottage to a similar property in a town with by-right short-term rental should treat that difference as a real cost, measured in hearing dates and renewal paperwork, not a formality to handle after closing.
For sellers, the mirror image is just as important. If your property already holds an approved Special Use permit and a clean STR history, that is worth stating clearly and early, because it removes the single biggest question a rental-minded buyer will have before they make an offer.
A Few Direct Questions
Does an approved Special Use permit transfer to a new owner when the property sells? The town's process treats the Special Use approval as tied to the property and its use, but a new owner still needs to complete a separate annual STR Permit application under their own name. Buyers should confirm the status of any existing permit directly with the Building Commissioner before assuming it carries forward without paperwork.
Can I apply for Special Use approval before I close on the house? The application process runs through the Building Commissioner and requires the applicant to appear in person at both the BZA and Town Council hearings, so most owners pursue it after closing, once they hold title to the property being reviewed.
Is there a faster path if I only want to rent occasionally, not full-time? The ordinance framework governs any rental of a room or unit for less than thirty consecutive days, regardless of frequency, so occasional rentals fall under the same Special Use requirement as year-round operations.
Michiana Shores rewards buyers who do the homework before they fall for the cottage. If you are weighing a purchase here, whether the plan involves rental income, a golf cart, or simply a quiet street under old trees, Shoreline Advice can walk you through what a specific property's permit history actually allows before you write an offer. Request a free home valuation and let's talk through what the numbers, and the paperwork, really say.
