The village of Oak Park may soon require residents to have a license to rent out their homes and condominiums through Airbnb and other rental platforms. The potential action would be largely in response to the shooting that occurred during a party May 24 at an Airbnb rental on South Lombard Avenue, resulting in one person sustaining a non-life-threatening injury.
Village Manager Cara Pavlicek spoke of the growing trend of renting Airbnb properties for uses unrelated to lodging and called the shooting a “public safety incident” during the first reading of the potential ordinance at the July 19 village board meeting.
“Recently over the summer, we’ve seen a growing trend of Airbnb properties not being really rented for, say, the tourism industry or a family member coming to stay in the community but rentals for parties,” said Pavlicek.
As currently written, the ordinance would require Airbnb hosts to get the same type of license as bed and breakfast operators for an annual fee of $350.
Historically, the village has had essentially no authority to regulate Airbnb rentals and the village board was widely receptive to granting itself regulatory authority by requiring hosts to have licenses to rent, so long as hosts have the opportunity to provide input regarding the ordinance.
As vacation rentals by owner and rental platforms began gaining traction in Chicago and the surrounding communities “close to 10 years ago,” the village elected not to license Airbnb rentals, allowing for the “free market to take effect and evolve,” according to the village manager.
Oak Park later added the requirement that Airbnb pay into the village’s hotel and motel tax, also known as the transient occupancy rental unit tax, which is four percent on the gross rental receipts of a hotel, motel or transient occupancy rental. Airbnb applies the tax through their platform and turns the money over to the village.
The idea to have Airbnb hosts weigh in on the ordinance came from Trustee Lucia Robinson with support echoed by Trustee Chibuike Enyia.
“Because we don’t license, we don’t know who the Airbnb [hosts] are,” said Pavlicek.
Pavlicek suggested the village host an open invitation townhall meeting for anyone who chooses to participate.
Development Customer Services Director Tammie Grossman told the board that staff would put out notices, host the meeting over Zoom and ask Airbnb owners to voluntarily identify themselves and work with the village.
“We can also communicate with Airbnb directly,” said Grossman.
Trustee Jim Taglia noted the large source of revenue Airbnb provides the village, sharing that Oak Park had seen almost 16,000 nights of lodging through the company in 2019 at an approximate nightly rate of $125.
“That’s a lot of individuals renting units,” Taglia said. “What is the primary concern of the village when we look to regulate and license it.”
Echoing Pavlicek, Grossman told Taglia the concern was born out of the South Lombard Avenue shooting. In that late night incident, witnesses reported 15-20 young people leaving what may have been a graduation party. Multiple shots were fired and police recovered 22 shell casings from the street.
Grossman added that in other instances the village has received complaints of Airbnb guests parking in undesignated spaces, people overcrowding in rentals, loud noises and unclean guests.
Regulating rentals also allows the village to inspect rental homes and condominiums for potential safety and health issues, according to Grossman.
Trustee Ravi Parakkat wanted to know if Airbnb has created impact on the affordability of living in Oak Park, to which Grossman replied that she thinks it has posed “somewhat of problem.”
“People are holding on to condos, for example, that maybe they could put back into the market or maybe they could rent on a traditional lease on a more affordable rate,” she said.
Having a number of vacation rentals, Grossman said, is also helpful but communities need to strike a balance between long-term and short-term rentals.
“I think this licensing and regulation will help us figure out what the right balance is,” she said.
Trustee Arti Walker-Peddakotla said “there has been a number of studies that have come out” that have found Airbnb to have a similar effect on communities as gentrification in that an increased number of short-term rental units causes overall rental rates to grow, pushing out low-income and middle-income long-term residents.
Walker-Peddakotla told the board she would support increasing the tax collected from Airbnb, stating that it is smaller than that of other Illinois municipalities.
She called “excessive” the portion of the ordinance that requires property owners looking to rent their homes to provide the village proof of homeowners insurance or host protection insurance in the amount of at least $500,000. Walker-Peddakotla suggested making the amount proportional to home value, the possibility of which Grossman said she’d research.
The ordinance will return to the board for a second reading, typically two weeks after the first. Adoption of the ordinance usually occurs in the same meeting as the second reading.