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Chicago Aldermen Looking to Regulate Airbnb Hosts

Posted by Hannah Raissa Marfil on Oct 07, 2015 07:10 AM EDT
Airbnb'S Value Estimated At $10 Billion After New Round Of Investments more big
SAN ANSELMO, CA - APRIL 21: The Airbnb website is displayed on a laptop on April 21, 2014 in San Anselmo, California. Online home-rental marketplace Airbnb Inc. is about to receive more than $450 million in investments from a group led by private-equity firm TPG. The new investments will value the startup at $10 billion, significantly higher than some publicly traded hotel chains. (Photo : Justin Sullivan/Getty Images)

A group of Chicago Aldermen are calling on the city to regulate property owners who rent their homes through Airbnb without a license.

Aldermen Michele Smith, Brendan Reilly and Brian Hopkins sent a letter to Maria Guerra-Lapacek, the Department of Business Affairs and Consumer Protection Commissioner requesting for the city to take action over unlicensed home rentals, reports Chicago Real Estate Daily.  The Aldermen stated that more than 3,000 homes and condominiums in Chicago were listed as vacation rentals through Airbnb.  However, fewer than 200 vacation rental licenses were issued by the city.  The license allows people to rent their homes for short periods and requires homeowners to pay a fee to the city.  It also mandates them to secure other requirements such as insurance, as well as conforming to specific health and safety standards. 

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Alderman Smith wrote, "It's a quality of life issue and a revenue issue.  In residential areas, people intend to live among neighbors, not next to a hotel. Entire three-flats have been converted to vacation rentals, and those have been used for frat parties or bachelorette parties, not really appropriate for the area."

The Chicago Real Estate Daily report also cited how Aldermen Reilly and Smith asked Guerra-Lapacek during a budget hearing held at the city hall Friday, October 2, to step up the city's efforts to enforce the vacation rental license regulations.  Apart from the Alderman's request, Chicago's hotel industry have reportedly launched a formal request to the Department of Business Affairs and Consumer Protection over the same issue.  Hotel industry representatives stated that Airbnb renters have "unfair advantage over hotels" who are required to pay taxes and comply with a long and strict list of city regulations. 

Meanwhile, Commissioner Guerra-Lapacek acknowledged the "illegal vacation renters" issue and the "lack of compliance" over the city's vacation rental license regulations, states DNA info.  During the city hall budget hearing, Guerra-Lapacek blamed the lag in enforcement to "lack of manpower."  

In the report, DNA info also made mention of Alderman Reilly's suggestion to do a "crackdown" on widespread illegal rentals.  He stated that such properties, when properly licensed and taxed, could bring in around $1.5 to $2 million revenue to the city. 

The commissioner said that the department would look into the issue carefully.  

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