By Julia Cardi
jcardi@detroitnews.com
A group of short-term rental owners in Dearborn is suing the city over sweeping restrictions that went into effect Jan. 1, banning short-term rentals in the city’s residential areas, alleging the ban is unconstitutional.
City Council passed zoning changes in July 2025 that ban short-term rentals in residential zones and in single-family homes. Members said the restrictions were meant to prevent nuisance concerns some residents have had about short-term rentals, including noise, maintenance issues and parking congestion. Officials also cited concerns that short-term rentals contribute to increasing the cost of housing in Dearborn because they’re not in the available home supply.
City Council in September expanded its changes from only allowing short-term rentals in Dearborn’s downtown districts to also allow them in areas zoned as community business and general business districts.
But the federal lawsuit filed Jan. 8 by five individual property owners and six LLCs that own property in Dearborn in the U.S. District Court for the Eastern District of Michigan contends the ban on short-term rental properties in Dearborn’s neighborhoods violates their constitutional right to due process and amounts to an illegal seizure of their property.
The property owners and LLCs also allege that the ban violates the Michigan Zoning Enabling Act, and unlawfully interferes with contractual obligations the rental owners have with future guests and the platforms they list their properties on.
The property owners argue the city’s restrictions based on officials’ contention that short-term rentals have created public nuisances violates the owners’ due process rights because the city has effectively declared all short-term rentals to be public nuisances without proof.
“Defendant cannot, consistent with due process, arbitrarily and capriciously ban Plaintiffs’ legitimately protected property interests in the continued use of Plaintiffs’ Properties as short-term rentals,” wrote the owners’ attorney, Roger Myers.
“Likewise, Defendants cannot, consistent with due process, impose such a burden all other current and future property owners in the City on the basis of potential nuisance conditions that may exist and which can be effectively remedied by the City through abatement of its Enforcement ordinances.”
Myers couldn’t immediately be reached for comment.
A spokesperson for Mayor Abdullah Hammoud declined to comment on pending litigation.
But Dearborn City Councilman Robert Abraham said he believes the city is on solid footing based on the authority given to Michigan municipalities when it comes to zoning.
“We’re not in a position to reverse the ordinance based on litigation,” Abraham said, though he made clear he was giving his own opinion and not speaking on behalf of the city. “But obviously, if the courts find that we are not correct in following the law, obviously we will adhere to the court’s findings.”
The lawsuit also alleges Dearborn’s short-term rental restrictions amount to an illegal seizure — legally known as a “taking” — without fair compensation under the Fifth Amendment by interfering with owners’ constitutional right to lease their property and include others on their properties on a short-term basis. The owners also argue the short-term rental ordinance will decrease their property values and significantly reduce the income they can earn from renting them out on a short-term basis.
Dearborn has approximately 50 to 70 short-term rentals, Hammoud, the mayor, estimated last year. Other Michigan cities have also passed restrictions on short-term rentals in specific areas, including Ann Arbor, Holland and Mackinaw City
Samir Alley, one of the lawsuit plaintiffs, owns three short-term rentals in Dearborn. He worried last summer that he may have to sell his properties if the city imposed zoning prohibitions. He said the income generated from renting out the properties pays for the maintenance and property taxes on the homes. He couldn’t be reached for comment on Friday.
The lawsuit asks the federal court to declare Dearborn’s short-term rental ordinance void and unenforceable, to mandate its repeal, to award attorneys’ fees and costs and “any other further relief as is just.”
