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Thursday, February 11, 2016

Regulation of Short-Term Rentals

As AirBNB, HomeAway, and VRBO (Vacation Rentals by Owner) become as popular as Uber and Lyft, municipalities are starting to encounter a whole host of new legal issues, particularly in the zoning and building regulatory arena. Neighbor complaints are forcing municipalities to review their current zoning and building regulations to determine (1) whether these uses are allowed, and if so, (2) how they are regulated. Some communities are finding that existing ordinances may not provide simple answers to these questions, leading many to consider amendments to specifically address these short-term rentals. 

If you haven't used one of these short-term rental sites, you may be interested in how they work. AirBNB, VRBO, and HomeAway operate websites that allow guests to reserve a private home, condo, or apartment on a nightly, weekly, or weekend basis. The websites charge a fee or percentage of the rental amount to the property owners who list their private homes, condos, or apartments on their websites. It's sort of like a dating site for property owners and potential guests.

The Village of Lincolnwood, Illinois is considering enacting an ordinance to regulate short-term rentals.  Lincolnwood had received a couple of complaints from residents that neighboring homes had been rented out on a nightly or weekend basis through these websites. The neighbors raised concerns about the business nature of the use in principally residential areas, a variety of safety concerns, and that one of the homes had been rented out to host a large Super Bowl party. 

Other Illinois communities have adopted different approaches to regulating these short-term rentals. For example, the Village of Lincolnshire adopted an ordinance allowing these uses, provided rentals in the residential districts are no less than 3 months in duration and limiting the number of rentals in a 12 month period to no more than 2.  The City of Evanston requires the owner to apply for and obtain a license to rent out a home on a short-term rental basis. The City of Chicago is also considering a licensing ordinance.

Post Authored by Julie Tappendorf


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