A proposed ordinance filed this week by Aldermen Joe Moore, 49th, and Ameya Pawar, 47th, and backed by Mayor Rahm Emanuel, for anyone who rents their living space for up to 90 days a year would have to register with the city. Described as “a free and simple online process” this move will help regulate the vacation rental service by collecting applicable hotel taxes and a 2% fee as well as requiring a $1 million liability insurance policy. No special licenses or city inspections of premises would be required.
The service has grown considerably, but some aldermen say that it represents an unfair competitive advantage to hotels, or in some cases, Airbnb rentals can simply just be a downright nuisance to some neighbors. There is an estimated 4,500 Airbnb hosts in the city, although it is estimated that only 200 have obtain the $250 license to operate.
The proposed ordinance is a vital step making the registration process simple for hosts, while setting accountability at the same time. Proposed fines for violators of $1500 to $3000 per offense and possibly up to six months in jail in certain circumstances. An Airbnb spokesman said that the ordinance was “an important first step” but added that Airbnb was “perplexed why someone staying on a couch on the South Side of Chicago would be taxed at a higher rate than someone renting out the penthouse of the Four Seasons.”
With growing concerns from the hotel industry, which has seen rising competition from vacation rental services like Airbnb, and also recently faces an increases in taxes, hotel operators are looking for a way to maintain a competitive edge.
Sherwin L. Sucaldito, REALTOR®, GREEN, ABR, CRPM
The Institute of Luxury Home Marketing
Green REsource Council, GREEN
Accredited Buyer’s Representative , ABR
Certified Residential Property Manager, CRPM