DEARBORN, Mich. (Michigan News Source) – A business that accounts for $1.4 billion in gross domestic product in Michigan is under attack.

Numerous cities in Michigan are banning short-term rentals setting off a dispute over property owner rights and potential disruptions to neighborhoods by rowdy renters.

Neighborhood watch.

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The city of Dearborn banned short term rentals from its residential neighborhoods at a recent city council meeting.

Now, short-term rentals such as Airbnb are not allowed in areas zoned as single family residential neighborhoods.

“That’s the big ticket item,” Hassan Abbas said, senior press secretary for Dearborn’s Department of Communications.

Airbnb said there was economic harm to the community by such bans. Airbnb stated short-term rentals accounted for $1.4 billion in GDP in Michigan in 2024 and added $354.6 million in tax revenues that year in this state.

“Banning short-term rentals in entire neighborhoods violates the constitutional property rights of local residents who rely on sharing their home to pay bills and mortgages, and threatens local businesses that depend on visitor foot traffic, with guests across Michigan spending an average of $622 on goods and services,” Airbnb stated. “Airbnb is committed to continuing to work with local leaders to address legitimate concerns about individual properties, but the City Council’s broad, unjustified ordinance will needlessly harm responsible residents and visitors who support Dearborn’s economy.”

Commercial vs. residential.

Park Township, St. Clair Shores, Ann Arbor, Holland, Mackinaw City and Spring Lake are some municipalities that have also banned short term rentals in residential areas, as Dearborn did.

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“Since 2004, the Michigan Court of Appeals has repeatedly determined that short-term rentals within Michigan communities that are subject to residential, business, and commercial restrictions are prohibited because they are commercial activities that are inconsistent with residential use,” the Hirzel Law firm stated.

The Michigan Court of Appeals has dealt with more than eight cases involving short-term rentals over the past decade, according to the Bloom Sluggett, PC law firm. The 2023 Michigan Court of Appeals decision in Aldrich v Sugar Springs Development found in favor of Sugar Springs Development to set restrictions on short-term rentals.