Tomorrow, City Council’s License and Housing Committees will consider a substitute ordinance from Mayor Rahm Emanuel to create new regulations for short term rental companies like Airbnb in Chicago.

Under the amended proposal, the type of registration or license required will change depending on the type of platform used to rent the unit. According to Shannon Breymaier, a spokesperson for the Mayor, the breakdown would be:  

  • “Intermediaries” like Airbnb would be required to produce monthly reports regarding rental activity to the city and local alderman. These businesses would have to also provide insurance on behalf of their hosts and remove units in violation of city rules. Units booked through an intermediary would be required to register as a “shared housing unit.”
  • For “advertising platforms” like HomeAway, which collect a fee for units listed on the company’s platform, the city would face similar regulations as intermediaries: the company would have to provide unit registration data from the city, and remove homes from listings that aren’t licensed. Units booked through an advertising platform or offline (e.g. newspaper ads) would be subject to an updated “vacation rental” license.
  • A new “shared housing unit operator” license would be created for hosts who rent more than one shared housing unit. This license would provide the city with an additional tool to enforce against bad actors by allowing suspension or revocation action against an operator’s license and all the operator’s units registered units if there’s a violation in any unit.

Mayor Emanuel’s new plan calls for doubling the surcharge to 4% on the booking of any shared housing unit, bed and breakfast, or vacation rental. A majority of the money would help pay for city-run homeless and affordable housing initiatives. Up to 8% of the approximately $2 million in revenue raised from this surcharge will pay for enforcement and administration.

And “to address quality of life concerns” raised by several North Side aldermen, who represent neighborhoods with the highest concentration of Airbnb rentals, the ordinance would set limits on the number of allowable units within buildings.

  • For single family homes: “only primary residences–when the host is present–can be listed or licensed, and egregious conditions like large parties would be subject to heightened penalties.”
  • For multi-family homes (2-4 units): one rental per building would be allowed.
  • For multi-unit buildings: the building owner, condo board or homeowners association would be in charge of setting the limit of units. They would have to inform the city of those limits. So-called “Guest sites”, or extra units within buildings for family and friends that are not advertised as primary residences, are not subject to the restrictions.

The owner of any home-sharing unit found facilitating “egregious conditions” such as drug trafficking, prostitution, and gang activity would face a $5,000 fine for each day found in violation, in addition to losing the privilege of renting out that unit. The plan also calls for a three strikes rule for other types of disturbances to surrounding neighbors, like noise or exceeding occupancy limits. “The City will have the right to suspend or revoke a registration for certain types of offenses, including if the continued rental would pose an imminent threat to public safety,” an email from Breymaier says.