Chicago Airbnb hosts made $73 million in 2016, despite roadblocks by Chicago City Council, hotel lobby

Chicago Airbnb hosts made $73 million in 2016, despite roadblocks by Chicago City Council, hotel lobby

The Chicago market has grown to the third largest in the country, accounting for almost all of the more than $73 million in supplemental income in 2016.

Some 8,100 Illinois property owners used the Airbnb app to rent out their space in 2016, taking in over $73 million in that year alone, with almost all of it coming from Chicago. Chicago is now the third-largest Airbnb market in the country after New York and Los Angeles. For many homeowners, the app represents a new and easy way to make extra money – and perhaps pay for what, after multiple tax hikes, are the nation’s highest property taxes.

Consumers like using Airbnb, which in many cases offers cheaper lodging than hotels. This gives visitors to the city more money to spend on shopping, dining and entertainment.

And it’s not just Chicago that’s raking it in. Airbnb brought in about 437,000 people to Illinois, representing a 69 percent increase since 2015, according to Chicago Inno. Homeowners in towns across the state are making extra money hosting people on their property through Airbnb.

Champaign and Urbana homeowners brought in $459,000 in additional income, Galena homeowners earned $274,000, Peoria homeowners earned $121,000, Rockford homeowners earned $127,000 and Carbondale homeowners earned $67,000, Chicago Inno reported.

However, not everyone is happy about the burgeoning short-term rental and home-sharing market – namely, the hotel industry and its partners in the city government.

Through anti-Airbnb legislation, Chicago politicians have sought to help the hotel industry, which has spent thousands of dollars lobbying against Airbnb. Those politicians also want a piece of the action in the growing market and have imposed costly taxes on Airbnb hosts to extract more money from them.

In June 2016, Chicago City Council passed a strict, 58-page ordinance in order to rein in the eight-year-old, startup company. In addition to onerous regulations dictating how many units homeowners can rent out, and on top of the hotel tax, which Airbnb hosts must also pay, the ordinance slaps a special 4 percent tax on homesharers –– which does not apply to hotels, motels or bed-and-breakfasts. And as if that weren’t enough, the law also allows city officials to investigate the homes of Airbnb hosts without a warrant, thereby violating Airbnb hosts’ constitutional right against unreasonable search and seizure.

A federal judge temporarily halted the ordinance in response to a lawsuit nonprofit group Keep Chicago Livable filed on behalf of Airbnb hosts.

And the Liberty Justice Center, or LJC, and the Goldwater Institute have also filed a joint lawsuit, stating that the new ordinance is unconstitutional. The LJC is the litigation partner of the Illinois Policy Institute and has taken up the cause of homeowners who want to use Airbnb without having to comply with the new ordinance.

Chicago politicians should back off from Airbnb and allow both hosts and consumers – and local restaurants and shops hungry for tourism dollars – to benefit from this surging element of the sharing-economy. Not only does Airbnb provide valuable short-term lodging competitive with hotels, it also is bringing in millions in much needed dollars to cash-strapped homeowners who pay among the nation’s highest property taxes.

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