Skokie, Evanston Move To Restrict Short-Term Rentals

More Chicago suburbs are tightening regulations on short-term rentals.

Skokie officials passed an ordinance Monday setting up a pilot program to ban new investor-owned short-term rentals in the village. And the Evanston City Council is considering passing tighter regulations to cap the number of short-term rentals in the city.

The changes add to a growing list of local governments aiming to clamp down on the number of vacation rentals offered through apps like Airbnb and Vrbo. Neighbors have complained that dedicated vacation rentals create noise, disruptions and drive up costs in an already strained housing market.

Skokie’s ordinance, passed Monday in a 5 to 1 vote by the Board of Trustees, sets up an 18-month test period that will limit new short-term rentals and place fees and regulations on existing ones.

The rules prohibit new short-term rentals for investor-owned homes, while allowing existing investors to register to maintain their rentals. New licenses at owner-occupied short-term rentals will be allowed, but the ordinance caps the number of licenses to one per block. The rules also set a minimum of five consecutive nights per stay and limit hosts to only 18 total bookings over the 18-month test period.

The rules require owners of existing short-term rentals to register by April 1 in order to keep their license, and the regulations take effect May 1. The rules set a $1,200 license fee for new and existing short-term rentals, and require operators to pay a registration fee of $2,400 for owner-occupied units and $3,600 for non-owner-occupied units. Operators who violate the rules could be fined up to $1,500.

Community Development Director Johanna Nyden said during Monday’s meeting the ordinance would give the village more power to address violations. Nyden said Skokie has 75 to 90 active short-term rental units.

“We have no teeth right now,” she said. “The real problem is we don’t have these enforcement tools to address. We can only suggest right now.”

Village Trustee Gail Schechter voted against the ordinance, arguing the limits were arbitrary. Schecter told The Real Deal she would have liked to collect more data on who owns rental properties and the existing demand before limiting them.

“We’re ostensibly doing the pilot to collect the data, but I feel like we should have used data to decide how we’re regulating this,” she said.

In Evanston, where a moratorium is currently in effect on new short-term rentals, city officials are proposing overhauling the rules to set a hard cap on the number of short-term rentals in the city and incentivize units owned by the occupant or by city residents, rather than by outside investors.

The City Council will consider the proposal at its meeting on Monday, after it was discussed and amended at the Jan. 12 meeting.

The proposal would limit the number of short-term rental licenses in the city to 1 per 100 rental units and change the definition of a short-term rental to a rental lasting less than one year, up from less than 30 days. It would also require that new offerings be at least 600 feet from other short-term rentals. Currently, 135 active short-term rentals are in the city, city staff said in January.

City officials also proposed a rule requiring the property manager of short-term rentals to live within three miles of Evanston, in an effort to ensure rentals are being operated by Evanston residents. Council members considered creating a hard requirement that short-term rental operators be city residents, but the city’s attorney said during the January meeting that it may open the city up to lawsuits.

Bobby Burns, the 5th Ward council member and a member of the Housing and Community Development Committee, told The Real Deal that Evanston’s rising housing costs are pricing out residents, and he’s opposed to outside investors using the limited housing supply for vacation rentals.

“I don’t feel comfortable with people that are only using it to make a profit, who don’t live in Evanston, who don’t necessarily have a strong commitment to Evanston,” he said, “because of how limited we are in terms of land and units that could be used for affordable housing.”

In Glen Ellyn, a full ban on short-term rentals is facing a legal challenge from an Airbnb operator in the village. A federal judge in December blocked the city from enforcing the ban against Blakelick Properties, the company suing the village, while allowing the ban to be enforced against other short-term rentals while the lawsuit plays out. The ban took effect in January for other properties, after it was initially paused by the judge and then delayed by the village board.