DEARBORN – On Tuesday, in a packed chamber, the Dearborn City Council voted unanimously to pass a new ordinance banning short-term home rentals through platforms like Airbnb and Vrbo in all residential areas of the city — except for the East and West Downtown districts, which will be subject to special regulations.

The ordinance, which will take effect at the beginning of 2026, amends the city’s zoning code to prohibit short-term rentals in single-family homes and all other residential zones. Property owners in the exempted downtown areas will be required to register their rental units, obtain a municipal license and undergo city inspections every three years to ensure compliance with housing standards and occupancy certification.

The changes were approved by five Council members, with Councilmen Ken Paris and Kamal Alsawafy absent. The vote followed a tense meeting where every seat was filled and residents stood lining the walls — a clear sign of the local importance of the issue.

Preserving neighborhood integrity

City officials say that Dearborn currently has dozens of short-term rentals — including both rooms and entire homes — and that the new restrictions are aimed at preserving the character of residential neighborhoods while addressing concerns from residents about noise, parking congestion and other nuisances.

Supporters of the ordinance argue that the growing presence of short-term rentals is driving up housing costs by incentivizing property owners to rent through platforms like Airbnb and Vrbo for higher profits rather than through traditional long-term leases, reducing the city’s rental supply and contributing to higher prices.

Supporters and opponents voice their views

During the public hearing, Nancy Harmon, the president of the Morley Area Residents Association and secretary of the Dearborn Federation of Neighborhoods, said concerns about short-term rentals have frequently been brought up at federation meetings. She read a letter from the federation during public comment at Tuesday’s City Council meeting.

“The daily disruptions to neighborhood life that an Airbnb creates in neighborhoods, such as parking lot activities and security issues, have been mentioned repeatedly at our monthly meetings,” that letter read in part.

In contrast, some property owners objected to the restrictions, saying their rentals provide an important service for out-of-town visitors attending weddings, graduations, work trips or medical treatment — and help cover property taxes, bills and build financial stability.

Critics also argued that the policy punishes responsible hosts along with problematic ones.

Joel Nieman, a resident who said he rents out a room in his Dearborn home, expressed concerns about how the restriction would impact others like him.

“For me and for many others like me, renting a room in our home is not a big business — it’s a necessity,” he said. “It helps me pay my mortgage and bills, and it’s how I can afford to stay in the home in the city that I love.”

He noted that he believes the issue isn’t owners who rent out portions of the homes that they live in, but rather businesses that buy houses to rent without managing the activities happening at these rentals.

“I believe there is a better way forward than an outright ban that would hurt responsible homeowners like myself,” Nieman said. “The problem is not caused by longstanding residents using their homes to supplement their income. The problem is caused by businesses.”

Dearborn, widely known as the capital of Arab American, draws visitors from across the U.S. and around the world. Many prefer short-term rentals for convenience and affordability — especially for stays under a month — rather than hotels, which are often more expensive.

City officials explain the policy

City Council President Michael Sareini said the new ordinance is not intended to punish hosts, but to bring the short-term rental market into line with how the city treats other types of businesses, which are not allowed to operate in residential zones.

He rejected suggestions of selective enforcement.

“We’re not in the business of picking winners and losers,” he said. “We won’t say, ‘You’re fine, you’ve got no violations, you get to keep your license’ — and then revoke it for others. The best way to manage this is through zoning.”

Councilman Mustapha Hammoud acknowledged that the ordinance would disrupt the short-term rental market “overnight”, but said he voted for it reluctantly to curb disturbances stemming from some rental properties.

“It’s hard to vote for something that impacts people’s ability to support their families,” he said. “Compassion matters when we legislate.”

While short-term rentals provide income for many, city officials argue the trend threatens quality of life and raises rental prices, increasing the burden on low-income households.

The ordinance was prompted by resident complaints about homes being rented out for one- or two-night parties that generate noise, traffic and disruptions to neighborhood peace. Dearborn currently has about 75 properties listed on Airbnb, and city officials estimate a third will be affected by the new ban.

Mayor Hammoud: “Short-term rentals are spiraling out of control”

The ordinance is supported by Mayor Abdullah Hammoud.

Our concern has long been that many of these short-term rentals — not all, but many — are getting out of control,” he’d previously stated.

He added that the trend is “exacerbating the affordable housing crisis” at the local, national and even global levels.

Hammoud said another reason for limitations was also preventing big developers from buying homes strictly for business purposes. This, he said, takes the homes away from families who could be moving into the city.