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As Chicago crafts new rules for Airbnb, city isn’t listening to users

By   /   May 6, 2016  /   News  /   No Comments

Before writing new rules that affect 4,500 Airbnb hosts across the city of Chicago, you might expect city officials to hear what those people have to say.

But some hosts say they’re being shut out of the political process, and have had to fight to get a hearing with elected officials who are planning to vote later this month on new citywide regulations for short-term rentals and room-sharing like those offered by Airbnb, VRBO and other websites and apps.

One of those hosts is Valerie Landis, who told Watchdog that she’s spent the last few weeks trying to get a meeting with her Alderman, Brendan Reilly. After attending a local meeting on Wednesday night, she said other hosts in the city have had similar trouble.

Photo provided by Valerie Landis

VIEW WITH A ROOM: Valerie Landis, an Airbnb “Superhost” in Chicago, has spent the last few weeks trying to get a meeting with her aldermann to discuss new roomsharing regulations. After attending a local meeting on Wednesday night, she said other hosts in the city have had similar trouble.

“Shame on the city for not listening to their people about our experiences and why Airbnb is actually good for the community,” Landis said in an email to Watchdog.

In frustration at calling the alderman’s office to little or no result, Landis took to social media and tweeted at Reilly throughout the day on Wednesday. (Watchdog also called Reilly’s office to see why he would not speak with Landis or other Airbnb hosts in his ward. He did not respond)

Finally, a breakthrough — sort of.

Landis got a response from one of Reilly’s staffers on Wednesday night. She was told a meeting could be arranged if she would stop posting on social media, though as of Thursday afternoon she has yet to be given a specific date and time to meet with the aldermann.

In the event that she never gets the chance to tell her story to city officials directly, here it is:

Landis has lived in Chicago for 13 years and owned property in the city for nine of them. She says Airbnb has provided a source of income as she’s worked to launch her own business focused on women’s health care and has helped her pay off debt.

Among the 4,500 hosts in Chicago, Landis stands out. More than 60 people have rented her space since she launched her Airbnb account in June 2015 and she’s accumulated overwhelmingly positive reviews from guests — enough to earn a “Super Host” designation from Airbnb.

Those accolades haven’t helped her win a hearing with her local elected officials — officials who could vote later this month to make it harder for people like Landis to make a living through the short-term rental business.

Under new regulations proposed in January by Chicago Mayor Rahm Emmanuel, all Airbnb hosts would have to register with the city and get a license. The new regulations also increase taxes on short-term rentals and would set a cap on how many days per year a space could be rented. Hosts who want to rent more than 90 days per year would be classified as a bed and breakfast, something that requires a more expensive license and additional inspections by the city.

Failing to register with the city or exceeding the 90-day limit would carry fines of up to $3,000 per offense and could land the host in jail for up to six months.

READ MORE: Chicago’s proposed regulations could mean jail time for some Airbnb users

The ordinance is scheduled to go before the city council’s Committee on Licensing and Consumer Protection on May 17.

Image via Wiki Commons

CITY OF BIG GOVERNMENT: New regulations for short-term rentals in Chicago would mean higher taxes and could send landlords to jail for six months if they step out of line even once.

Aldermann Joe Moore, who represents the city’s 49th ward and authored the ordinance, says the new rules will make it easier for the city to track short-term rentals  and protect the quality of life in Chicago’s neighborhoods.

“The proposed ordinance will make it easier for hosts who periodically rent out their living space,” he said in a statement.

Landis couldn’t disagree more. The proposal will make it harder for both hosts and guests, she said.

By limiting the number of days a residence can be rented out, it essentially caps how much income a host can make through Airbnb or other short-term rental applications.  It also means fewer options for guests, who might not be able to stay with a “Super Host” like Landis if she’s already exceeded the number of allowed rental days in a year – or who might have a harder time finding available short-term rentals in the city, period.

Reilly, who represents the 42nd Ward where Landis lives, is pushing for even tighter regulations. He told the Chicago Sun-Times in January that Moore’s proposal would “unleash Airbnb to potentially wreak havoc on the quality of life in neighborhoods across Chicago.”

“The benchmark of 90 nights a year is far too high,” he told the paper. “You’ll see a lot of nightly vacation rental unit owners leasing out their spaces 89 nights a year to avoid becoming licensed and regulated. That’s a major flaw.”

More recently, he signed a letter asking the city’s Department of Business Affairs and Consumer Protection to crack down on Airbnb hosts, echoing a call from the city’s hotel industry to do the same.

What he’s not doing, though, is meeting with his constituents who have concerns about the new rules.

Photo from Chicago City Council

TOO MANY DAYS: Alderman Brendan Reilly told the Chicago Sun Times that he thinks a 90 day limit for Airbnb rentals is “too high.”

Marcus John Marlow, another Airbnb host who lives in the 42nd Ward, says he has not been able to get a response from Reilly’s office, either.

Like Landis, Marlow is a “Super Host” with spotless reviews from dozens of guests who have stayed at his apartments in The Loop and the city’s Streeterville neighborhood. He has lived in Chicago for seven years and has been renting space over Airbnb for the past three.  He told Watchdog that he believes the city is listening to the people who will be affected by the new rules, but isn’t doing enough to alleviate concerns.

“My sense is that these proposals are being met with a fair amount of skepticism from the constituents,” he said. “People are concerned about their lives being controlled.”

The proposed ordinance might also make it more expensive to rent rooms in Chicago.

Airbnb already collects a 4.5 percent hotel tax on rentals in Chicago, and hosts’ earnings are subject to the city’s income tax. The new proposal would add another 2 percent to the tax for short-term rentals.

Moore says the higher taxes will generate $1 million in annual revenue, which the city plans to use to reduce homelessness.

According to Airbnb, Chicago’s 4,500 hosts accommodated more than 165,000 guests from July 2014 to June 2015. Those stays generated more than $33 million in income for the hosts, and an estimated $152 million in direct spending by guests in local restaurants, stores and shops.

“People are excited to stay downtown and so close to the city loop to live like a local,” Landis said. “I help educate guests where to shop, spend money, sightsee, eat, dine and spend their time. I promote local businesses and restaurants they would otherwise never know about.”

Landis says she and other Airbnb hosts in the city will continue their efforts to get local officials’ attention and explain their concerns with the proposed regulations. Regardless of what the city decides, room sharing is here to stay, she says.

“Alderman Reilly is being short-sighted about this kind of progress that helps his constituents, pays his taxes (ie: his salary), and assists the middle class hard-working citizens,” she said.

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Eric Boehm is the national regulatory reporter for Watchdog.org. He lives in St. Paul, Minnesota. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and Fox News. He was once featured in a BuzzFeed listicle. Follow him on Twitter @EricBoehm87 and reach him at [email protected]