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Airbnb OK With Rental Ordinance Passed By Council Committee

By Ted Cox | June 21, 2016 6:51pm
 Airbnb spokesman Christopher Nulty and attorney Michael Kasper testify before a joint City Council committee on vacation rentals Tuesday.
Airbnb spokesman Christopher Nulty and attorney Michael Kasper testify before a joint City Council committee on vacation rentals Tuesday.
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DNAinfo/Ted Cox

CITY HALL — A joint City Council committee passed a second new vacation-rental ordinance Tuesday, even as Lincoln Park's alderman said the bill would not halt the proliferation of Airbnb units in her ward.

Other opponents of the latest vacation-rental ordinance put forth by the Emanuel administration were irritated by the lateness of the 11th-hour proposal and an accompanying shift in committee assignments, but they couldn't stop it from passing by a voice vote.

Airbnb representatives found fault with the compromise, but pledged to comply with it if enacted.

"My client will comply with the ordinance," said attorney Michael Kasper.

Airbnb spokesman Christopher Nulty added that the firm has "no current plans to litigate" against it.

 Ald. Michele Harris talks with Business Affairs Commissioner Maria Guerra Lapacek at a previous committee meeting on vacation rentals.
Ald. Michele Harris talks with Business Affairs Commissioner Maria Guerra Lapacek at a previous committee meeting on vacation rentals.
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DNAinfo/Ted Cox

A handful of aldermen in the joint Housing and Zoning Committee were eager to tear at it before grudgingly surrendering to the inevitable.

Ald. Michele Smith (43rd) railed at the "unfairness" of provisions that allowed certain residential areas to ban home-sharing rentals by precinct, much like areas voting to go dry to ban liquor sales.

According to Smith, under the latest proposal only six blocks in her ward would even qualify to outlaw home sharing locally, leaving 600 blocks unregulated. She called Lincoln Park "the most saturated area in the city for these rentals," adding that the ordinance would make 9,000 units in her ward eligible, with 500 already listed.

Smith said there were only two productive ways to produce a genuine reform ordinance: limit the number of rentals in an area, and limit the number of commercial rentals.

"This ordinance isn't gonna protect most of the people affected by this," said Ald. Susan Sadlowski Garza (10th). She also took issue with how City Council working groups had debated the issue for a month since it cleared committee and was abruptly pulled back in May, and "now we're doing a whole new ordinance and being asked to vote on it in five minutes."

Business Affairs Commissioner Maria Guerra Lapacek argued that the changes to the ordinance were relatively minor, thus the new ordinance simply substituted for the one that passed a month ago.

Ald. John Arena (45th) wondered why it had been shifted from a joint Housing and License Committee to a joint Housing and Zoning Committee. Arena and Smith are both voting members of the License Committee, but do not have seats on either the Housing or Zoning committees.

"This is an entirely different ordinance," said Ald. Joe Moore (49th), chairman of the Housing Committee. He called it "less of a licensing subject matter and more of a zoning issue."

That prompted Ald. Deb Mell (33rd) to point out to Lapacek that, if the new ordinance prompted a change in committees, that was a substantial change from the earlier ordinance.

According to Lapacek, the latest ordinance would create a $10,000 "intermediary license" for home-sharing rental firms like Airbnb, which handle the entire transaction. Airbnb would also make reports to the city every two weeks on properties it lists.

Commercial interests operating through Airbnb would be called on to get an "operator's license," at $250. Homeowners using firms that simply list the rentals, like HomeAway and VRBO, would have to get a short-term residential rental license.

HomeAway and VRBO, which insist they've been around for decades, endorsed the measure.

"We are pleased to see that HomeAway homeowners will be able to welcome travelers to unique Chicago neighborhoods for years to come," said spokesman Matt Curtis. "As the city progresses, HomeAway looks forward to working closely with the Mayor’s Office and members of the City Council to address lingering concerns around elements of the proposal — in particular, the implications of arbitrary density caps and onerous data-remittance requirements."

Single-family homes and one unit in a two- or four-flat can be rented, but only if the homeowner has confirmed residence through a homeowner exemption filed with the Cook County assessor. Otherwise, they'd need an "administrative review" granting permission through Lapacek's office.

Larger buildings would be limited to a maximum of six units or a quarter of all units, whichever is less.

Kasper argued against that, pointing out it would create a system of "winners and losers" in a 100-unit apartment building where only six would be permitted.

"Who's gonna decide who the winners and the losers are?" Kasper said.

Condominium and homeowner associations could vote to ban home sharing in a building. Other areas, however, would have to go through a petition system with the local aldermen, much like a precinct going dry. That would begin with a petition signed by a quarter of voters in the precinct.

Arena took issue with that as well, pointing out an average precinct with 600-800 voters would have to get 150-200 signatures and likely more if contested by an Airbnb. Even then, he added, existing Airbnb rentals could continue to operate until they have to file for another license, if not longer depending on enforcement.

"It just feels like we're giving people a false sense of control," Arena said.

He extended that to aldermen, pointing out how they were kowtowing to a $25 billion business, Airbnb, just a day after granting concessions to Uber and Lyft on ride-hailing reforms.

"We can't stand up for consumer protection," Arena said. "We always back down to people with money."

The measure passed by voice vote, with only Garza raising her hand in opposition. It advanced to final passage by the full City Council Wednesday.

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