Luxury Tree House Spurs Municipalities and Owners to Review Regulations for Tree Houses and Short-Term Rentals
A nearly 200 square-foot Schaumburg
luxury tree house available for rent on Airbnb for
$195/night (complete with a fireplace, air conditioning, full size bed and twin
sleeping loft, kitchenette with sink, microwave, fridge, wifi, and HDTV (with
HBO, Showtime, Cinemax, etc.)) recently
made headlines and reminded communities and property owners to review local
regulations governing tree houses and short-term rentals. The owner’s Airbnb
listing reports that he is permitted to rent a room in his home, and grant
guests use of the tree house, in accordance with local zoning laws; however,
going forward, the Village of Schaumburg is now considering new
zoning regulations pertaining to setbacks, size, location, and height of
tree houses in the rear yard.
While renting a room in your
house might be allowed in Schaumburg, such activity might be prohibited in
other communities’ home occupation restrictions for commercial activity in
residential neighborhoods. Other regulations targeting transients may limit
uses in residential districts to “permanent
resident purposes.” Communities should review their local zoning
regulations to consider the impact that sometimes extravagant tree houses might
have in a residential area. Additionally, as sites like Airbnb increase in
popularity, local regulations for short-term rentals may be increasingly
appropriate where regular commercial transient activity might erode the
residential character of a neighborhood.
In
addition to zoning regulations, there may be tax implications for short-term
rentals to consider. The Cook County Assessor’s office, which is in the midst
of reclassifying
bed-and-breakfasts from residential to commercial property, is reportedly
evaluating the property tax
implications of the Schaumburg luxury tree house. Additionally, the Illinois
Hotel Operators’ Occupation Tax imposes a tax on the occupation of renting,
leasing, or renting rooms to person for living quarters for periods of less
than 30 days. This state tax is imposed in addition to whatever local
hotel taxes are imposed. Anecdotally, Airbnb
users simply are not paying the required taxes, but short-term lessors should
be cautioned to review their local regulations because the Airbnb terms of service squarely place
responsibility for compliance with zoning and tax laws on the user creating the
listing. As Airbnb increases in popularity, local governments will need to
develop strategies to ensure they are recovering the hotel taxes that are due,
at least so local hotels are not put at an unfair disadvantage.
Post authored by Daniel J. Bolin, Ancel Glink
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