The increasingly nasty fight over Airbnb in Chicago will continue at least another month.
An ordinance to regulate the service cleared a committee vote last week but aldermen declined to hold a full vote until they could review some of the mayor's 11th-hour changes. At issue are revisions in the ordinance that would curb the practice of “Airbnb on steroids,” as a recent Trib editorial dubbed it:
But a group of aldermen say the [original] ordinance strips away essential zoning protections for residential areas and fails to address other crucial side effects of the home-sharing business — namely the impact of hosts who rent out multiple units, throughout most of the year, operating as de facto hotels. This Airbnb-on-steroids disturbs neighbors, reduces long-term housing options for local apartment renters and threatens property values.
The mayor’s new proposal includes caps on the number of units in a building that could be rented short-term and requires hosts who rent out single-family homes to be present during rentals. In doing so, he lost the support of Airbnb.
“You shouldn’t model an ordinance based off what the fringes are doing,” says Christopher Nulty, an Airbnb spokesman. “The current [proposed] ordinance punishes the majority of people … and we’re concerned about the impact on the large number of hosts who use this as a tool to make extra money.”
So how many Airbnb hosts are really just renting out a spare room to make a buck, and how many are running something akin to a commercial rental business? The answer is complicated, because Airbnb rarely makes its numbers public. But data from Inside Airbnb—a website that scrapes data from the site—show that 57.7 percent of all Airbnb listings in Chicago are of whole houses or whole apartments, as of May 4.
Nulty says Inside Airbnb data is inaccurate. “Whenever you get third-party data, it’s not going to be as accurate,” he says, though he did not provide any specific data or reasons to dispute the numbers in this report. The company has sparred with Inside Airbnb on many occasions, and the owner of the site, self-proclaimed data activist Murray Cox, has been critical of Airbnb’s effect on cities. Cox, 43 and a New York resident, says he created the site to simply make it easy for people to see that data for themselves.
In an internal Airbnb survey, 82 percent of Chicago hosts report they are sharing their primary residence, Nulty countered. But the self-report survey could be complicated by the fact that it’s technically illegal right now (due to a 2011 ordinance) to operate a non-owner-occupied vacation rental without a license. In an op-ed last week, four aldermen said that over 70 percent of Airbnbs in their wards were not owner occupied.
Cox acknowledges that some “entire home” listings may be posted by folks who rent out their place while they are on vacation or out of town, so he developed a more specific statistic—the multi-lister. That’s a host who has multiple “entire home” listings, which provides a conservative estimate of how many commercial-style listings are on the market.
Of 5,964 total listings in Chicago this month, 958 were entire homes posted by multi-listers, Cox says. That’s 16 percent of all listings—not an insignificant number. Airbnb is growing at a fast clip in general (about 57 percent more listings this year than last) but the 958 number is up 65 percent from last year, outpacing overall growth. Cox says that’s an indication that commercial hosts are gaming the system.
“There are 958 [such] listings, compared to 3,444 whole house listings, which comes out to about 28 percent,” Cox says. “In comparison, New York had 19 percent for a long time … Then it jumped down to 10 percent.”
To some the Airbnb regulation fight may look like a Goliath vs. Goliath story—the hotel lobby and NIMBYs in wealthy neighborhoods sparring against a $24 billion company—but there is plenty at stake for the Davids out there. In major cities like Los Angeles, New York, London, and even the company’s home city of San Francisco, residents, activists, and politicians have argued that unregulated Airbnbs can exacerbate housing affordability problems.
A report by NYC real estate site The Real Deal last year suggested that by taking much-needed rental units off the market, Airbnb causes rents in Williamsburg to be between $30 to $70 higher each month. (Airbnb disputed that analysis, saying the effect is lower—about $6 per month in New York, $19 in San Francisco—based on a study that it funded itself.) Considering that, as my colleague Whet Moser often points out, many Chicagoans are spending the majority of their income on housing, this could become another flashpoint in the battle over gentrifying neighborhoods.
On the other hand, Airbnb says it makes housing more affordable for hosts who can use Airbnb income to pay rent or mortgage. And Nulty says that the company has previously removed “so-called commercial listings” from the platform in order to improve user experience. However, the approach to such purges is different in each city—and in an interview on WBBM 780 this Sunday, two alderman accused Nulty and Airbnb of "backsliding" on promises to do so in Chicago.
“We’re not dismissing concerns about affordability in the city," Nulty says. "That should be part of what is addressed in the ordinance. But enforcing the law … has to be up to the city itself."