Chicago has no business prohibiting you from renting out your home — for a year or a night

For many Chicago residents, the ability to offer their homes as short-term rentals is a lifeline, a way to earn extra money.

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A proposed ordinance would further limit the ability of people to rent out their homes for a single night, including on Airbnb.

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For many Chicago residents, the ability to offer their homes as short-term rentals is a lifeline, a way to earn extra money. But not if Mayor Lori Lightfoot has her way. She wants to make it much harder for you to rent out your home.

An ordinance Lightfoot has proposed, which the City Council is expected to vote on in September, would ban single-night home rentals. It also would ban parties in short-term rentals. And it would end a city policy that allows people to rent out their homes on Airbnb and similar platforms while their registration applications await the approval of city bureaucrats.

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These rules would be in addition to the severe restrictions on short-term rentals that then-Mayor Rahm Emanuel signed into law in 2016. The Liberty Justice Center and the organization I work for, the Goldwater Institute, are challenging that ordinance for violating Chicago homeowners’ constitutional rights.

Lightfoot says the city needs more restrictions to prevent people from using short-term rentals as “party houses,” which can bother neighbors. But it’s not apparent that party houses have been a major problem — nor would these extreme measures address the problem even if it existed.

Chicago already has a general noise ordinance and an even stricter noise rule for short-term rentals. The city also has laws restricting parking, littering and every other type of nuisance a party might create. So if short-term rentals are being used for disruptive parties, the city can simply enforce its existing rules against the offenders. And if a particular house has a recurring problem, the city can revoke the owner’s permission to have short-term rentals there. That way, the city would target the actual problem, instead of punishing the many innocent, responsible homeowners who rely on short-term rentals to help pay their mortgages and property taxes and otherwise make ends meet.

Besides, there’s little evidence that short-term rentals have created any party house problem. From the time the original ordinance took effect in 2016 through early December 2019, Chicago’s 311 line received 356 calls related to short-term rentals, and only 128 resulted in any complaint form being filed. Of those complaints, only 40 resulted in enforcement action by the city. And of those enforcement actions, only 14 involved properties that were actually licensed for legal short-term rentals. Those 14 enforcement actions occurred at just nine addresses.

Even that overstates the problem. The complaints about three of those nine properties weren’t based on nuisances but on violations of city rules, such as owner absence or rental in a prohibited building.

So nearly three years after the city began licensing and registering short-term rentals, only six properties had any nuisances that the city deemed worthy of enforcement action. That hardly justifies banning single-night rentals for all Chicago property owners and denying Chicagoans vital income at the worst possible time.

So what’s really behind the push for these new restrictions?

Short-term rentals have various opponents with various motives, including NIMBYs and anti-gentrification activists who don’t like the idea of outsiders in their neighborhoods. But the biggest force behind short-term rental restrictions, in Chicago and nationwide, is the hotel industry, which wants to prevent competition. That’s why Chicago imposes a 6% surcharge on short-term rentals in addition to the 4% tax that hotel guests pay. And it’s no wonder the industry would renew its efforts now, as it suffers during the COVID-19 pandemic. Hotel reservations have fallen, and because home-sharing offers a safe and affordable alternative, the hotel industry wants to make them illegal.

It’s unfortunate that hotels are struggling, but it’s not Lightfoot’s job to protect them from competition. Instead, it’s her job to ensure that laws against nuisances are enforced — and to protect the right of property owners to rent out their homes as they wish. If the city hasn’t been enforcing noise ordinances as well as it could, she should correct that, rather than sacrifice the rights and income of law-abiding homeowners.

Jacob Huebert is a senior attorney at the Goldwater Institute.

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