Judge to Decide Legality of Chicago’s Home-Sharing Rules

CHICAGO (CN) – A lawyer representing Chicago argued in court Tuesday on behalf of the city’s new ordinance regulating online home-sharing services like Airbnb, saying the city has every right to regulate business activity.

A lawsuit was filed last November seeking to strike down the shared-housing ordinance for violating the Illinois Constitution, claiming several provisions go against the plaintiffs’ rights to privacy, due process and equal protection.

Attorney Erin McLaughlin, representing Chicago, reiterated in court Tuesday that the city wants to dismiss the remaining seven counts of the complaint because the ordinance, passed in September 2016, stands up to the rational basis review.

The four Chicago residents who filed the Cook County lawsuit take issue with the warrantless searches of their property allowed by the law, as well as the requirement that a rental property be their primary residence.

Other counts in the complaint argue against rules regulating the amount of rental units in a building, noise levels, and fees and taxes that are imposed on home-sharing rentals but not hotels.

One count against a provision allowing the inspection of guests’ personal information was dropped in February after the city amended the ordinance to remove the provision.

“In all cases the court can decide the claims are not viable as a matter of law,” McLaughlin said of the remaining counts.

Mentioning that the city worked with Airbnb in laying out their rules, she added that “our ability to regulate business activity is well established.”

The ordinance was designed to preserve the character of Chicago’s residential neighborhoods, promote full-time residency, and “prevent entire buildings from being turned into de-facto hotels,” McLaughlin argued.

“This is just a regular business regulation,” the attorney said, adding that “all we have to do is show that there is some conceivable basis for the policy.”

“They are simply quibbling with the approaches the city has decided to take,” McLaughlin said of the plaintiffs. “They don’t get to dictate the measures the city uses.”

And neither does the court, she added.

“This really devolves into separation of powers,” Cook County Circuit Court Judge Sanjay T. Tailor said at Tuesday’s hearing. “Isn’t that a line the legislature is entitled to draw without the court second guessing it?”

Jacob Huebert, the plaintiffs’ lead attorney with the Liberty Justice Center, said the ordinance is “not reasonably designed” and the plaintiffs should be able to present their case against it before it’s thrown out.

“An ordinance cannot be unreasonably overbroad,” he said, adding that there are aspects to the city’s new rules that don’t make sense.

“Who gets to rent and who doesn’t has nothing to do with the public’s health, safety or welfare,” Huebert argued.

The plaintiffs claim that treating the rental caps in larger apartment buildings differently, issuing fees that aren’t issued to hotels, and implementing noise rules that are more vague than those applied to homes and hotels shows that the regulations are irrational.

“Does the city have to anticipate every single scenario?” Judge Tailor asked.

McLaughlin said no, it doesn’t, and it has every right to pass general laws.

A different lawsuit was filed a few weeks earlier than the one in question on behalf of the same plaintiffs, but was removed to federal court where it was voluntarily dismissed.

Yet another complaint was filed in federal court around the same time, led by home-sharing host advocacy group Keep Chicago Livable.

A preliminary injunction in that case was denied and a motion to dismiss it is currently pending.

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.

Tailor is expected to issue a written opinion on the city’s motion to dismiss the entire Circuit Court complaint within 60 days.

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