Ald. Michele Smith (43rd) is convinced the vacation rental business in the form of Airbnb and other tech-based house sharing services could “destroy” Lincoln Park as we know it.
Sounds kind of far-fetched when I put it like that, which is probably a giveaway that I’m not entirely buying her argument.
But I do believe she’s correct to the extent she suggests we haven’t entirely anticipated all the ramifications of the new sharing economy when applied to real estate.
Smith is among a group of aldermen urging tougher regulations on Airbnb and its industry brethren than are contained in an ordinance Mayor Rahm Emanuel plans to push through the City Council this month.
“The continued unregulated growth of vacation rentals threatens to destroy some of our residential neighborhoods,” Smith told me Monday.
Smith says she’s concerned that entire residential blocks could be turned into quasi-hotel districts with transient visitors replacing neighborhood residents.
This is a particular concern in areas located close to downtown tourist attractions — such as the Lincoln Park neighborhood she represents, Smith said.
“You never know until it happens to you and your neighborhood,” the alderman said.
Smith was responding to my column over the weekend about how Emanuel now plans to seek a 4 percent surcharge on Airbnb rentals. The resulting revenue would be used for homeless services.
Smith says Emanuel’s surcharge is fine, but that it shouldn’t take the place of meaningful regulation intended to protect residents from “bad operators” who might rent out party houses on quiet residential streets.
Smith also said there “has to be some kind of community control of the sheer number of these in neighborhoods.”
The Emanuel Adminstration argues it is trying to regulate Airbnb and the rest of the house sharing industry, but without choking off its development as some other cities have done. Chicago’s real estate market is also significantly different than in cities such as New Orleans and San Francisco where Airbnb has been regarded as a problem, mayoral aides contend.
The mayor’s ordinance would require house sharing services to register all units with the city. Properties rented out more than 90 days a year would need a city license.
Smith said many property owners in her ward are finding it is easier and more lucrative to rent their properties as short-term vacation rentals than to find tenants for full-year leases.
The alderman was planning to attend a community meeting Monday night about a four-unit apartment building in the 2500 block of North Orchard that is seeking a vacation rental license for three of the apartments.
The City Council began requiring a vacation rental license in 2011 before Airbnb took off, and it is estimated that thousands of rental units on Airbnb aren’t bothering to get licensed.
Smith said there are already other properties on the North Orchard block being rented through Airbnb, although none of them are licensed, she said.
Elizabeth Biddle, owner of At Home Inn Chicago, said her company would manage the bookings and guest stays at the Orchard Street location seeking the license.
She said she expected no opposition based on the company’s track record in the city, which dates to its start as a bed and breakfast reservation service in 2000. At Home Inn Chicago now manages 50 properties in the city, either as vacation or corporate rentals.
“We feel they should all be licensed,” Biddle said of the Airbnb rentals.
Biddle said she doesn’t understand why the city doesn’t enforce its existing ordinance, which requires a special use permit from the city for vacation rentals located in residential neighborhoods.
So far, the biggest opposition to the Airbnbs has come from the hotel industry, which thinks house sharing businesses are providing unfair competition because they don’t have to follow the same regulatory rules.
“This is an issue that is way bigger than the hotel industry,” Smith said.