Airbnb disputes Emanuel’s claims about 4 percent surcharge

SHARE Airbnb disputes Emanuel’s claims about 4 percent surcharge

Airbnb says a proposed surcharge would generate just $950,000 a year to fight chronic homelessness — less than half of the city’s estimate — because of additional restrictions in the pending rules. | Getty Images

Mayor Rahm Emanuel’s stalled plan to tax and regulate Airbnb would generate just $950,000 a year to fight chronic homelessness — less than half of the city’s estimate — because of all of the safeguards tacked on to appease recalcitrant aldermen, the company has concluded.

Emanuel initially proposed a 2 percent surcharge on the booking of any shared housing unit, bed-and-breakfast or vacation rental.

He doubled it to 4 percent at the behest of Aldermen James Cappleman (46th) and Ameya Pawar (47th) to create a “dedicated revenue source” that would generate at least $2 million a year for homeless services.

But that was before a steady stream of amendments aimed at appeasing aldermen whose wards have been inundated with home-sharing patrons and the bachelor party atmosphere they sometimes bring.

Now Airbnb has prepared an analysis of how the restrictions would have affected surcharge revenue in the past year.

In a memo obtained by the Chicago Sun-Times, the company claims that the proposed requirement that single-family homeowners be present at all times during home-sharing would have cost the city $646,000 last year.

The company said another $347,000 would be lost to Emanuel’s plan to allow only one home-sharing listing in two- to four-flat buildings and only six units or 25 percent, whichever is less, in larger residential buildings.

Airbnb said a 4 percent surcharge with no such restrictions would have generated $1.9 million based on company bookings over the last year. Under Emanuel’s revised plan, the annual take would be just $950,000, the home-sharing giant said.

Read more about efforts to regulate Airbnb in Chicago

Mayoral spokeswoman Shannon Breymaier said Airbnb “hasn’t shared this analysis” with the city. “We encourage them to share the data behind this analysis along with information about their general operations with the City, City Council and the public,” she wrote in an email.

Airbnb has said the company cannot go along with requiring homeowners be present, limits on the number of units that can be shared, or allowing building associations to limit or ban the sharing.

“We oppose the substitute ordinance as currently drafted because it creates new barriers for Chicagoans to share their homes and will make it harder for similarly situated families to supplement their incomes and stay in their homes,” Jill Irvin, director of public policy for Airbnb, told aldermen in early May.

“Don’t misunderstand. Airbnb does want to be regulated. But we cannot support excessive regulations that will cost middle-class Chicagoans millions in extra income.”

Emanuel’s plan to regulate and tax Airbnb cleared one legislative hurdle in early May but not another after the latest in a seemingly endless parade of changes failed to please both sides.

One day after a marathon hearing drew a standing-room-only crowd, the City Council Committees on Housing and License and Consumer Protection approved the mayor’s plan 17 to 9 — a close vote by Emanuel standards.

That vote occurred even though aldermen had only just been given copies of what Housing Committee Chairman Joe Moore (49th) sarcastically called the “substitute to the substitute to the substitute” ordinance, and appeared to be confused about exactly what they were voting on.

After the vote, Moore declared his intention to hold the ordinance in committee for even more tweaks and not call for a vote on the City Council floor.

“There’s no rush. Let’s take a breather. When everyone has a chance to really examine this, they’ll realize it strikes a pretty good balance of very competing interests,” the chairman said then.

On that day, Emanuel scoffed at Airbnb’s threat to file a federal lawsuit on grounds that federal law prohibits the city from regulating internet platforms in a way that holds the company responsible and liable for the behavior of home-sharing hosts.

“This just may be the kind of storm and fury before an ordinance as a way to try to grab leverage,” the mayor said then.

Emanuel’s plan to slap a percent surcharge on home-sharing bookings has set the stage for a sharing economy showdown similar to the one brewing between the taxicab industry and Uber and Lyft over a plan to license ride-hailing drivers.

The Airbnb fight features, on one side, homeowners who say they want and need the right to supplement their incomes by listing their homes or rooms on Airbnb.

On the other side are high-rise residents whose say their quality of life has been greatly diminished by home-sharing invaders and the rowdy behavior they sometimes bring.

During the committee meeting, aldermen from across the city demanded to know how the Emanuel administration planned to implement the data-sharing requirements of the ordinance within 150 days and enforce a requirement that the owners of single-family homes be present during all rentals.

The answers they got from city attorneys and Business Affairs and Consumer Protection Commissioner Maria Guerra Lapacek were not reassuring. That’s in part why Moore made the call to slow down and take a little more time.

That will give Emanuel time to make even more changes.

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