More Residents Challenge Chicago’s Home-Sharing Rules

CHICAGO (CN) – A second lawsuit was filed Tuesday challenging Chicago’s new ordinance regulating home-sharing services like Airbnb, this time under state-law claims.

Following a federal lawsuit filed last week, a group of the city’s residents and one property owner currently living in Arizona claim the rules violate their privacy, due-process and equal-protection rights under the U.S. and Illinois Constitutions.

The Liberty Justice Center, or LJC, and the Goldwater Institute filed Thursday’s state lawsuit on behalf of the plaintiffs.

Echoing the federal complaint’s sentiment, LJC said in a statement that, “The lawsuit argues that these rules restricting who can rent out a home on Airbnb or a similar service make no sense. They aren’t designed to protect the public’s health or safety.”

LJC says that instead, the city’s requirements “appear to be designed to protect the hotel industry from competition.”

“The ordinance places onerous rules on people who share their homes with guests and use online platforms to do so,” the group said.

It is “full of legal jargon that few attorneys, let alone homeowners, can understand,” LJC lead attorney Jacob Huebert said at a press conference Tuesday morning.

Among the new regulations set to take effect next week, the ordinance reportedly allows searches of hosts’ homes without a warrant, requires them to keep and report personal information about their guests and themselves, and arbitrarily imposes a 4 percent tax that hotels do not have to pay.

It also arbitrarily limits the number of units per building that can be listed on a home-sharing website and requires that the rental property be a host’s primary residence, according to LJC.

A noise-level requirement says that noise must remain at the level of a normal conversation. But, Huebert said, that level is never defined and “a baby crying for any length of time makes noise louder than a normal conversation level.”

The attorney touts the economic benefits Chicagoans gain from renting their homes to travelers, pointing out that during the Chicago Cubs’ 2016 World Series push, Airbnb hosts made “$2.6 million, all from World Series visitors.”

“It was economic activity in a city that could always use more economic activity,” Huebert said.

According to a study commissioned by Airbnb, Chicago currently has 4,550 hosts in 70 of its neighborhoods who served 165,800 guests last year. The number of hosts in the city has doubled every year since 2009.

Over a 12-month period, Chicago hosts, 25 percent of which make less than $50,000 per year, earned $33.9 million using Airbnb. Huebert says $2.6 million of that went to hosts on the city’s beleaguered South Side.

“I hope that they recognize how this is really hurting people who were counting on this money,” Huebert says.

“These regulations aren’t just detrimental to homeowners, travelers and communities, they’re also illegal under the U.S. and Illinois Constitutions, which require government to treat people equally under the law,” said Christina Sandefur, an attorney at the Goldwater Institute.

Thursday’s lawsuit is asking for a preliminary injunction to block the enforcement of the ordinance while its legality is being determined. The named plaintiffs are Leila Mendez, Sheila Sasso, Alonso Zaragoza and Michael Lucci, who filed their complaint against the City of Chicago and Maria Lapacek, commissioner of the city’s Department of Business Affairs and Consumer Protection.

The federal lawsuit, filed last week by home-sharing advocacy group Keep Chicago Livable and an individual host, also sought a preliminary injunction.

Similar complaints have been filed by residents of Austin, Texas and Santa Monica, Calif.

Airbnb has sued both San Francisco and New York for passing regulations on its services and hosts.

Chicago’s legal department said in a statement, “We intend to vigorously defend this suit and the ordinance it challenges, as we believe the plaintiffs’ legal arguments lack merit.”