Short-Term Rentals Reeled in by Chicago Suburb St. Charles

St. Charles is preparing to bring order — and revenue — to its Wild West short-term rental market.

City officials this week outlined a plan to regulate and tax Airbnbs, Vrbos and other short-term rentals, which currently operate without oversight or city revenue collection, in the suburb roughly 45 miles west of downtown Chicago, the Daily Herald reported. The move follows growing concern about the impact of rentals on neighbors and the lack of enforcement tools.

Mayor Clint Hull said any standards must be enforceable, with clear authority to revoke or deny registrations if operators fail to comply.

Community Development Director Russel Colby pitched a registration program run through the city’s website, requiring hosts to disclose property details, ownership information and manager contacts. Operators would also agree to abide by occupancy limits, parking rules ans noise and trash regulations. Violators could face suspension, revocation or denial of renewal.

While staff have not proposed a registration fee, fines would be levied against unregistered hosts, escalating with repeat offenses. The city also plans to tap AirDNA, a third-party analytics firm, to track operators and calculate expected tax revenue.

City staff estimate more than $70,000 in tax revenue went uncollected last year. Under the proposal, short-term rentals would be subject to the same hotel tax as local lodging operators: 6 percent of 94 percent of gross rental revenue. Currently, the tax is self-reported and largely unenforced, leaving the city blind to the scope of the market.

Officials said they identified 47 active short-term rentals in St. Charles, with 44 listed on Airbnb and the rest on Vrbo. With demand for alternative accommodations still strong post-pandemic, more properties could surface once the city builds a formal tracking system. Enforcement measures and bans have been considered in locales across the country since short-term rentals’ pandemic boom.

Elsewhere in the Chicago area lawmakers have addressed issues with short-term rentals. Highland Park blocked a timeshare plan for “fractional ownership” of Michael Jordan’s former estate, and Chicago aldermen squabbled over whether to lower the threshold of ward-wide bans on short-term rentals if enough residents sign a petition.

— Eric Weilbacher