“A law that was designed to fail”: Aldermen want more enforcement of Airbnb-like vacation rentals

More than a year after the city implemented rules designed to regulate short-term rentals, some aldermen are calling for stronger enforcement and more regulation.

“This is a law that was designed to fail,” Alderman Brendan Reilly (42nd) told Crain’s.

The City Council passed the short-term rental ordinance in June 2016, responding to complaints about Airbnb. Hotels pushed for regulations to level the playing field, joined by landlords and condo boards that claimed short-term rentals were turning their buildings into illegal hotels.

Officially launched in August 2017, the program limits vacation rentals in buildings and requires hosts who want to rent out their condo units or apartments to register with the city.

In August, the city notified 2,400 Airbnb hosts it would not renew their licenses, saying they failed to provide required information like addresses, according to the Chicago Tribune. Airbnb spokesman Christoper Nulty told Crain’s the firm has been working with city officials to provide the information they need to enforce the rules.

The rules allow landlords or condo boards to place themselves on a “prohibited buildings list,” where vacation rentals are banned. Yet a Crain’s check of Airbnb shows units available for rent in more than a few “prohibited buildings” among the 8,000 Chicago listings.

Alderman Michele Smith (43rd), a vocal critic of Airbnb, said she plans to introduce a proposal that would raise more money for enforcement by increasing home-sharing licensing fees. She wants to end the practice of allowing hosts to rent their units while their licenses are pending, which happens when the city is compiling information about them or considering renewing a license.

Chicago is hardly alone in trying to regulate Airbnb and other home-sharing companies. New York’s attempts to crack down on the industry recently led Airbnb to strike back with a lawsuit. [Crain’s] — John O’Brien