The only conclusion reached by audience members and aldermen at the end of last night's joint meeting of License and Housing Committees on Airbnb regulations was that the ordinance wasn't up to snuff. The meeting wrapped after five hours, with co-chairs Joe Moore (49) and Emma Mitts (37) announcing members would recess at 9:00 a.m. today.

“I have no expectations,” Ald. Michele Smith (43) said of this morning's meeting. She'd voiced some of the strongest opposition to the Mayor's most recent proposal, which she said left a giant loophole for property investors to take advantage of.

Attendance: Chairmen Emma Mitts (37), Joe Moore (49), Proco Joe Moreno (1), Brian Hopkins (2), Pat Dowell (3), Sophia King (4), Leslie Hairston (5), Roderick Sawyer (6), Gregory Mitchell (7), Michelle Harris (8), Susan Sadlowski Garza (10), Patrick Daley Thompson (11), George Cardenas (12), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O'Shea (19), Willie B. Cochran (20), Michael Scott, Jr. (24), Roberto Maldonado (26), Walter Burnett, Jr. (27), Ariel Reboyras (30), Scott Waguespack (32), Carrie Austin (34), Carlos Ramirez-Rosa (35), Brendan Reilly (42), Michele Smith (43), Tom Tunney (44), John Arena (45), James Cappleman (46), Ameya Pawar (47)

Few, from Airbnb hosts and advocates, aldermen on the North Side and near downtown, or hotel and apartment interests, made full-throated endorsements of the Mayor’s proposal. The day was marked with disagreement over Airbnb’s compliance with local laws in Chicago and other big cities, BACP enforcement capacity, and aldermanic control over licensing.

Download Mayor’s proposed ordinance.

The meeting got off to an inauspicious start. It was a half hour delayed by regular committee meetings. The hearing site, Room 201A, was already full, with hundreds waiting in the 2nd floor lobby to testify, many wearing peach or teal colored Airbnb shirts. License Committee Chair Emma Mitts then called for the hearing to move to Council Chambers, which was already occupied by the Zoning Committee and only on its first item. She ended up recessing until 1:30 p.m., and swapping rooms with the Zoning Committee. The ordinance under consideration was the fourth version the Mayor’s office proposed, and was given to aldermen a mere 90 minutes before the hearing began. They had been briefed on a different version only 24 hours prior.

The 53-page substitute included changes that capped the number of home-share units in high-rises to six units or 25% of the total units, whichever is less. In two-, three-, and four-flats, only one unit in the building could be put up for rent on home-share platforms (but only if that unit is the primary residence). Those who rent out more than one unit would have to get an operator’s license and have the homes inspected by the city. Single family homes could not be rented out for more than 120 days each year.

“It feels a little bit like we’re building the car while we’re driving it,” Ald. John Arena(45) said of the changes.

The “huge loophole” change Smith opposed was described by Business Affairs and Consumer Protection Commissioner Maria Guerra Lapacek as giving homeowners more “flexibility”, and was borne out of requests from other aldermen. It would create an administrative review process (called “adjustments” in the ordinance) for hosts who would like to rent out additional units. After the meeting wrapped, Smith told Aldertrack that investors with multiple properties could easily abuse the system. “That really eviscerates the ordinance, giving away our residential streets for even less money than we gave away the parking meters.” Ald. Tom Tunney (44) called the adjustments a “quagmire” that would force aldermen to court to fight extra rentals.

Smith told the joint committee that to ward off the further proliferation of rentals, she'd like to see Airbnb subject to the same regulations currently imposed on nail salons and barber shops. Applicants must apply for special use permits and face review from the Zoning Board of Appeals.

“I think everybody agrees there needs to be regulation. What we basically want is for the proposed ordinance to be delayed so that it can be written responsibly,” one testifier, Sandra Madsen, said nearly four hours into the hearing. The entire audience, made up of both Airbnb renters and Airbnb proliferation opponents, applauded. Madsen said she didn’t want the ordinance to be “rushed through and unenforceable.”

Others testifying said the process was opaque and that there were too many questions left unanswered by city and Airbnb. Ald. Brian Hopkins (2) and Brendan Reilly (42) expressed doubt Airbnb would adhere to stricter regulations, or that BACP could enforce them.  

Reilly initially complimented BACP on adjustments to the Mayor’s first proposals from January, and on enforcing regulations on bad apple hosts, but said that work was undone by the substitute.

“With your help we were able to crack down on some illegal renters,” Ald. Reilly said to Commissioner Lapacek, but “it was a major resource strain, not only on your department but on the Chicago Police Department as well.” He said it would be difficult to apply that effort to other violations with the $160,000 appropriation BACP would get from extra fees on rentals. Lapacek said it would be enough for “at least two staff.”

“I don’t blame you for lack of resources,” Reilly continued. “The mayor spends $10 million enforcing ordinances they have on the books and they’re still losing the battle. This is not a criticism of you, but I’m very concerned. The ordinance is only as good as the enforcement behind it.”  

Ald. Pat Dowell (3) voiced similar concerns, and asked how long it typically took BACP to rescind a license. Lapacek said “It could take, 8 months, a year.”

“When it comes to Airbnb and problems in the neighborhood, we need an immediate response, and I’m not feeling that we’re going to get that with just 8% of $2 million earmarked,” Dowell said.

“Everything you could do is not enough,” Ald. Hopkins said of BACP’s enforcement capacity. He, like Smith, mentioned rules governing barber shops and nail salons. “You’re overwhelmed by the scope of this problem, as are we.”

Reilly and Smith both criticized Airbnb for not shutting down the accounts of bad actors in other major cities, or for opening data up for examination.

Airbnb advocates, not speaking to specifics of the Mayor’s proposal, lauded the financial and tourism benefits of the service, and agreed bad actors–like those who allowed 20 or 28 guests in a single apartment near Wrigley Field, or guests who disturb neighbors with loud parties–should be kicked off the platform. One issue most agreed on, they were in favor of more funding for programs to address homelessness, funded by an added 4% surcharge on bookings.

“We both want to support homelessness program, we both want to promote tourism, we want to craft regulations that distinguish between the use of one’s home and commercial activity,” Jillian Irvin, Airbnb’s Director of Public Policy testified, but opposed the Mayor’s substitute ordinance. “Airbnb does want to be regulated, but we cannot support regressive regulations that will cost middle class Chicagoans millions in extra income.” She said listings have saved more than 900 Chicago renters from eviction, and hosting is growing fastest on the South Side.

As Chairman Moore worked through a thick stack of pink slips, alternating between proponents and opponents of the Mayor’s ordinance, one audience member yelled, “I mean, what time does this end?” Some aldermen left the meeting at about 5:00pm, anticipating a recess.

“I have been a little concerned that maybe we’re talking to ourselves,” one Airbnb host testified. Aldermen, including Chairman Moore, Susan Sadlowski Garza (10), and James Cappleman (46) perked up, and said they were. “Are you sure? Really? Commissioner?” she said to Lapacek, who had been talking to Ald. Sadlowski Garza. “The last two speeches were completely lost on you. You were talking through the whole thing.” Lapacek, visibly annoyed, said something about testimony being “very compelling,” and returned to the box where other administration officials sat.   

Other members of the Mayor’s office of Intergovernmental Affairs and Lapacek could be seen lobbying some of the day’s most vocal opponents, including Aldermen Smith and Reilly, on the floor until the meeting wrapped.

“I’m sure there’s going to be some changes made,” Ald. Mitts said, but didn't hint at whether she believed another substitute would be introduced this morning, or whether the issue might be tabled until some kind of middle ground could be reached.