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Rahm Amends Airbnb Ordinance As Debate Rages Ahead Of Council Meeting

By Ted Cox | May 13, 2016 5:22pm
 Rentals like this Airbnb property in Wrigleyville would be subject to different rules from those offered through HomeAway and VRBO.
Rentals like this Airbnb property in Wrigleyville would be subject to different rules from those offered through HomeAway and VRBO.
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Screenshot/Airbnb

CITY HALL — The Emanuel administration hurried through changes Friday in its proposed new regulations for home-sharing services like Airbnb, as debate raged on both sides of the issue.

 

In an apparent bid to appease all sides, Emanuel proposed tightening some regulations, loosening others and dropping entirely the maximum number of days a property could be rented out and not be licensed.

But Ald. Michele Smith (43rd) immediately rejected the 11th-hour tweaks as "ill-considered" and "a big blunder."

That was after Smith joined Aldermen Brian Hopkins (2nd) and Brendan Reilly (42nd) in publishing an op-ed piece in the Sun-Times deriding "the folksy label of 'house sharing'" and suggesting it "has morphed into big business dominated by non-owner-occupied 'investment properties.'"

 Mayor Rahm Emanuel continues to tinker with a home-sharing ordinance in the face of criticism from firms like Airbnb and aldermen.
Mayor Rahm Emanuel continues to tinker with a home-sharing ordinance in the face of criticism from firms like Airbnb and aldermen.
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DNAinfo/Ted Cox

Reilly has previously sought for the city to simply enforce an ordinance he passed in 2011 calling for all rental rooms to be licensed.

The Chicago Bed & Breakfast Association lined up behind the aldermen, calling for a vote scheduled Tuesday in a joint City Council meeting to be put off, and siding with Hopkins' call to issue licenses for anyone renting a unit more than 15 days a year. Mayor Rahm Emanuel's proposed licensing for those that rent out units for more than 90 days.

"The original concept of this law is to allow homeowners to rent out their home a few nights a year or maybe while they are on vacation," said Ray Reiss, president of the B&B association. "If you are running a business out of your home for upwards of 90 days a year, it will impact your neighborhood."

Yet Philip Minardi, spokesman for Expedia, which books trips online including housing, lined up behind Airbnb competitors HomeAway and VRBO, calling them "traditional vacation rental sites [that] have been offering vacation rentals in the Chicagoland area for over two decades and have been a responsible and important part of the city’s travel and tourism economy." Not coincidentally, he added, Expedia owns HomeAway and VRBO.

The Emanuel administration played to that distinction Friday in releasing an amended ordinance for consideration building on its original new rules for home sharing. It put the onus for reporting to the city on rental agencies instead of the local property owner, while setting aside those who rent more than one property.

According to mayoral spokeswoman Shannon Breymaier, "intermediaries" like Airbnb, which handle the financial transactions for the hosts, would have to register its available properties on a monthly basis and would also have to provide insurance. By contrast, "advertised platforms" like HomeAway, which do not handle the entirety of rental transactions, would have to provide rental data to the city, while its rental properties would be subject to "an updated 'vacation rental' license."

While generally dismissing attempts to "deputize the platforms" to police the rentals, Minardi said he welcomed the distinction drawn between Airbnb, which handles the entire transaction, and HomeAway and VRBO, which advertise them. "HomeAway is not against regulations," he said.

Smith, however, called the compromise's mix of more regulation and less "a betrayal of Chicago's neighborhoods." She said it "would create an infestation of on-site rentals on side streets" in neighborhoods.

"This is not the answer," Smith said. "This is a big blunder and will prove very, very costly down the road."

Under the mayor's latest proposal, those who rent more than one unit would be subject to "a new 'shared housing unit operator' license," Breymaier said, intended to weed out "bad-apple actors."

Emanuel's amended ordinance would continue to call for a 4 percent surcharge, with the estimated $2 million raised going toward enforcement and providing housing to the homeless.

It will also put teeth in the ordinance through a "one strike and you’re out” policy for "certain egregious conditions like drug trafficking, prostitution and gang activity, and a 'three strikes and you’re out' rule for conditions that cause a disturbance, such as noise or exceeding occupancy limits."

Single-family, multi-family and multi-unit buildings would be subject to varying regulations intended to guarantee the integrity of neighborhoods. Yet Smith felt they would only serve to push rentals onto side streets, where they'd face fewer regulations.

Fines would go as high as $5,000 an offense, along with possible license revocation. Hosts would also need to observe standard hotel non-discrimination policies toward renters.

Even so, Smith said, "I do not understand what the rush is." Comparing it to Mayor Richard M. Daley's infamous parking-meter deal, she suggested it was being pushed through before it could be fully debated.

Minardi joined Reiss in echoing that. "It's kind of frustrating the city is trying to push this through as quickly as it has," he said, advocating a delay to next week's expected vote.

Minardi said the city doesn't want to make the regulations so Draconian or needlessly complex that they drive hosts underground — and end up earning no tax revenue whatsoever.

A joint meeting of the City Council's Housing and License committees is scheduled to debate the amended ordinance Tuesday ahead of Wednesday's meeting of the full Council.

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