The City Council’s License and Housing Committees have set a tentative date to hold a joint hearing on a proposal from the Mayor’s Office to regulate room-sharing companies like Airbnb in Chicago.
That potential date, Tuesday, May 17, is not set in stone, however, because negotiations over how to amend the ordinance the mayor originally introduced in January are still ongoing, a City Hall source told Aldertrack yesterday, explaining that a meeting will only be held this month if both sides can agree on the changes. The two committees would have to issue a notice by this Friday if the plan to hold the meeting moves forward, per Open Meetings Act rules.
Meanwhile, former 4th Ward Alderman Will Burns joined 1871’s Tom Alexander yesterday for a Q&A on Airbnb’s legislative agenda at the tech incubator’s Merchandise Mart headquarters. Burns left City Council earlier this spring to lobby on behalf of the company as its director for the Midwest region.
Burns said the company is still in the middle of negotiations with City Hall about the “components of an amendment” to the mayor’s ordinance, which would require hosts to register their units with the city online, and for Airbnb to supplement that registry directly with the city. Under the original plan, the city would impose a 2% surcharge on the booking of any shared housing unit, bed and breakfast or vacation rental. Mayor Emanuel has since floated the idea of doubling that surcharge to increase the expected revenue, about $2 million, to pay for affordable housing and homeless initiatives.
“Airbnb wants to be regulated…we want to pay taxes like the hotels do,” said Burns, explaining that Chicago has the opportunity to set the benchmark nationally for how the industry should properly be regulated. He said that hasn’t been the case in other big cities like San Francisco (where the company originated), New York City or Los Angeles, where the company has seen a significant amount of legislative pushback.
“There is a built-in level of support for us,” Burns said. Referencing an internal poll Airbnb conducted of Chicago residents, Burns noted that 70% of Chicagoans have no problem with one of their neighbors participating in Airbnb; 68% said the city should pass regulations that would allow for the business to grow; and 71% said they would vote for an alderman who voted for regulations to support its growth.
“Our number one objective is that we want people to be able to host, we want people to be able to earn money, and we want an opportunity for this company to be legal, and for the folks who are doing this work to know that they can do it without someone trying to shut them down,” Burns explained.
Most of the people in the crowd were either hosts or renters on the platform, making it a noticeably pro-Airbnb event. Burns frequently touted statistics on the economic benefits of the company and its ability to help drive tourists to neighborhoods outside the city’s central business district. He described the Stevenson Expressway, which separates downtown from the South Side, as a “Berlin Wall”, saying more needs to be done to get tourists to explore sites beyond McCormick Place and Navy Pier.
And at one point, when asked about horror stories and safety issues that have infrequently impacted renters and listers on home-sharing service sites, Burns equated those stories to “opposition research” during an election, which prompted a warm response from the crowd.
Yesterday’s talk came on the same day as the American Hotel & Lodging Association (AH&LA) released its own study on the room-sharing economy in Chicago.
The study, which was conducted by Penn State University’s School of Hospitality Management, found that more than half of Airbnb’s Chicago-area revenue, about $29 million, comes from operators who list their properties for rent more than 180 days a year. The data is based on analytics provided by Airdna, which tracks Airbnb revenues and operations and provides pricing and revenue data to Airbnb operators. Data on shared rooms or units, as well as “unique units” like boats, tree houses and tents, were excluded from the study.
The research was bankrolled primarily by the American Hotel & Lodging Educational Foundation, and disputed Airbnb’s claim that their platform is a gateway to the city’s underserved neighborhoods and a tool to help struggling homeowners make ends meet. The research noted the top five zip codes with the highest number of units and revenue are located downtown or on the city’s North Side:
60657 – Lakeview, Boystown
60611 – Magnificent Mile, Streeterville
60614 – Lincoln Park, Sheffield, Old Town Triangle
60610 – Old Town, Gold Coast
60622 – Wicker Park, West Town
Burns argued yesterday that most hosts make $5,000 on average per year. A significant percentage of those hosts rely on Airbnb rentals to supplement their income and pay their rent or mortgage, he said.
“We should be in the business of helping people make more money,” Burns added, mentioning the record property tax increase he approved last fall before vacating his seat on the Council. “I voted for that. I’m guilty as charged,” he said, with a slight chuckle.