Politics

Key City Panel Advances Measure That Would Allow Alderpeople to Block New Short-Term Rentals

Members of the Chicago City Council would have the power to block new short-term rentals from opening in their wards, under a measure advanced Wednesday by a key Chicago City Council committee.

The proposal, authored by Ald. Anthony Napolitano (41st Ward), is the latest effort by city officials to block huge parties that have long been a regular nuisance in some neighborhoods.

With the endorsement of the City Council’s License and Consumer Protection Committee, the measure is set for a final vote by the full City Council on June 18.

The city’s current rules governing short-term rentals have “no teeth,” Napolitano said, and leave alderpeople holding the bag when irate residents complain about being kept up by noisy parties that leave a trail of trash through their neighborhoods.

The only thing alderpeople can do to address those concerns is to call hotlines and reach out to liaisons with the home-sharing platforms, like Airbnb, Napolitano said.

“This just gives you a little more strength in your community,” Napolitano said.

However, Airbnb Chicago Policy Manager Jonathan Buckner called the measure “an over-broad and misguided violation of Chicagoans’ property rights, which would punish responsible homeowners and local businesses who rely on the income from travel on short-term rentals — especially in neighborhoods outside of Chicago’s traditional tourism hubs.”

Jack Lavin, CEO of the Chicagoland Chamber of Commerce, said in a statement the measure would place “overly burdensome restrictions on short-term rental operators.”

“Given the city’s significant financial challenges, we should look for ways to stimulate economic development to help increase revenue, not stifle opportunities for growth,” Lavin said.

Chicago faces a likely budget deficit in 2026 of nearly $1.2 billion, according to the city’s most recent budget forecast, released in August. If the economy worsens significantly, that gap could swell to $1.6 billion, according to the forecast.

Mayor Brandon Johnson said he has not yet taken a position on the measure, which would significantly tighten regulations on short-term rentals that have been in place since 2016.

“This particular measure, quite frankly, I’ll have to look into a little bit deeper,” Johnson said. “But I know that there are a number of alders who mean well and are trying to show up for their particular pocket of the city.”

Just last month, the City Council imposed new rules on home-sharing platforms to require much more information be shared with neighbors, including information on how to reach a host or someone empowered to address complaints.

All existing short-term rentals registered with the city would be allowed to continue to operate, according to the proposal. But property owners who decide to offer their properties for short-term rent could be blocked from doing so by their ward’s alderperson.

That will ensure that the industry isn’t harmed, Napolitano said.

Ald. Brendan Reilly (42nd Ward) said the city needed to cap the growth of short-term rentals in Chicago after the industry expanded as if “on steroids.”

Under the measure, alderpeople could ban new home-sharing rentals one precinct at a time, without City Council approval. A petition drive that collects signatures from 10% of the precinct’s voters could overturn the ban.

Ald. Bill Conway (34th Ward) and Ald. Matt O’Shea (19th Ward) voted against the proposal, which faces an uncertain future once it reaches the full City Council.

Conway said he was concerned the measure would infringe on “private property rights” while O’Shea asked city staff to provide him with an estimate of what the new rules would mean for funding designed to help those experiencing domestic violence.

In 2018, the City Council approved a 2% surcharge on all short-term home rentals to fund shelters and programs for victims of domestic violence, an initiative championed by O’Shea.

Another 4% surcharge on all short-term home rentals funds services for unhoused Chicagoans.

If Napolitano’s measure is approved, that would represent a major expansion of aldermanic prerogative, more than a year and a half after a probe by the U.S. Department of Housing and Urban Development found that aldermanic prerogative fuels segregation in Chicago and violates the civil rights of Black and Latino residents by limiting the creation of affordable housing.

Many housing advocates blame the increasing number of homes and apartments available for short-term rentals for exacerbating Chicago’s affordable housing crisis and fueling gentrification.

Current city rules allow the City Council to ban short-term rentals in each city precinct only if 25% of voters sign a petition and have the support of their alderperson.

Ald. Marty Quinn (13th Ward) and Ald. Silvana Tabares (23rd Ward), who have used that process to ban short-term rentals in every precinct in their wards near Midway Airport, said that process is too cumbersome and should be changed.

“The deck is stacked against families by large investment corporations,” Tabares said.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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