Property owners sue City of Dearborn over short-term rental restrictions
Several individuals and companies that own short-term rental properties in Dearborn, Michigan, have filed a federal lawsuit against the city over its recently imposed short-term residential rental ordinance.
The lawsuit, filed on Jan. 8 in U.S. District Court for the Eastern District of Michigan, seeks a jury trial. The lawsuit asks the court to declare the ordinance "void and unenforceable" and halt any enforcement of the rules, along with unspecified relief and damages.
The Dearborn City Council voted July 15 to allow residential rentals of less than 30 days only in specific areas of the downtown business district. Under that rule, short-term rentals are prohibited within the single-family residential neighborhoods.
The restrictions under city ordinance 24-1845 took effect Jan. 1.
The plaintiffs in the lawsuit claim they all own properties outside of the business district, with locations that include those on Prospect Street, Audette Street and Brewster Street. The plaintiffs are Sultan Bzeih, Bruno Morabito, Antonia Morabito, Samir Alley and Ali Srour, along with limited liability companies known as 1817 Vernon, Empire Realty Management, Xerola Management, 3313 Detroit, 3833 Brewster and Korte Property.
The ordinance, if enforced, "would effectively ban the use of all plaintiff's properties as short-term rentals," the lawsuit said.
If the property owners are forced to cancel pending bookings and remove their listings from third-party services such as Airbnb, the lawsuit claims, their property values, along with potential rental income returns, are diminished.
The plaintiffs argue that even if such a rule goes into effect, it should have exempted properties that were already operating as short-term rentals.
The city council meeting, when the vote happened, included public comments from dozens of residents. One woman complained of "daily disruptions," and another man said the short-term rentals have been a better return on his investment than long-term rentals.
"We believe that limiting short-term rentals to commercial areas, like our downtown districts, will protect housing stock for residents, including long-term renters; alleviate noise and other nuisances in quiet neighborhoods; and still offer options to those seeking to book or profit from short-term stays," a city spokesperson said in the summer.
Now that the matter has gone to court, the city said Tuesday, "We would not have a comment on pending litigation."
The above video originally aired on July 15, 2025.