Real Estate

Detroit cracks down on Airbnb rentals

Short-term rentals now banned in some downtown areas

The city of Detroit, Michigan, recently voted to ban Airbnb in some of the city’s zones and is now sending out cease and desist letters.

Back in November, the Detroit City Council approved of new restrictions as part of a general update to its zoning code, according to an article by Tom Perkins for Detroit Metro Times. The update went into effect Tuesday, and makes it illegal for property owners in the city's R1 and R2 zones to rent out rooms in a home or apartment.

From the article:

The new language specifically prohibits home occupations in R1 and R2 zones, and states that, “Use of a dwelling to accommodate paid overnight guests is prohibited as a home occupation; notwithstanding this regulation, public accommodations, including bed and breakfast inns outside the R1 and R2 Districts, are permitted as provided in Sec. 61-12-46 of this Code" (subsection of 61-12-392).”

Airbnb explained there are 430 hosts in Detroit, of which 50% rent out an extra room in their apartment or home, the article states. The majority of these homes are located in R1 and R2 zones.

Airbnb spokesperson Ben Breit claims this latest change will take money from many middle class residents who rely on the extra income to pay for their homes.

From the article:

“We're very disappointed by this turn of events. Airbnb has served as an economic engine for middle class Detroiters, many of whom rely on the supplemental income to stay in their homes," he says. "We hope that the city listens to our host community and permits home sharing in these residential zones.”

This news comes just as Airbnb hosts experienced a major win from the housing industry. Hosts can now use the income they earn in short-term rentals when applying for a mortgage refinance from certain lenders, including Detroit’s own Quicken Loans. To read more about that, click here.

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