Chicago Parties On Despite Closing Of Bars And Restaurants

While COVID-19 virus cases and deaths continue to soar, the city’s endless big-party nightlife scene still is rocking and rolling.


Chicago’s restaurants and bars currently may be closed to indoor business because of the pandemic, but huge downtown weekend parties of 60 to 80 people have shifted underground and outside the city’s regulatory reach to bargain-rate hotels and vacation-rental residences, warned 42nd-Ward Ald. Brendan Reilly.


“Huge groups. Totally unregulated. No masks. No distancing. Spreader events,” Ald. Reilly told the Chicago Sun-Times.


Apparently, a few enterprising hotel operators have turned the big-party crowd into a business model—profiting off of the closure of bars and restaurants. Insiders also report that some North Side vacation-rental owners with large “party units” are raking in thousands of dollars a month in rental fees.


After an appeal to the Illinois Hotel & Lodging Association by the city’s Business Affairs and Consumer Protection Commissioner Rosa Escareno, hotel owners say they are beefing up anti-party security measures.


This past summer, the Chicago City Council approved a new round of regulatory measures to combat the use of the city’s more than 9,000 licensed short-term vacation rental units as “party houses” and nests for the breeding and spread of the pandemic.


In March, during the early phase of the COVID-19 pandemic the City Council moved to suspend single-night bookings in short-term vacation rental units. Recent updates to the law extend the ban on singe-night stays for the near future and require a minimum rental period of two consecutive days. Other changes include:


  • Tougher prohibition on excessive loud noise and/or vibrations generated from within the rental unit, in any private open space adjoining the rental, or on the adjacent public way.

  • Enhanced penalties of $5,000 to $10,000 if the maximum occupancy limit for the rental units is exceeded.

  • Operator license suspension/revocation if the rental unit is involved in two or more separate incidents of illegal activity or objectionable conditions, in any combination, during a 12-month period.

  • Owners who list homes and apartments as vacation rentals on popular booking sites such as AirB&B, VRBO and HomeAway now must submit their registration information directly with the city as opposed to just sharing them with the respective home-sharing platforms.

  • An increase in the annual owner registration fee to $125 from $60 per unit. A graduated license fee also is paid by the intermediators—the platforms that list and advertise vacation-rental units.

These reforms to the city’s Shared Housing Ordinance became effective on October 17th, however some changes will not go into effect until April 1, 2021.


The reforms should help the Department of Business Affairs and Consumer Protection track violations and help prevent rule-breaking vacation-rental unit owners from renewing their licenses.


Along with the new regulations, future vacation-rental unit owners and managers need to keep the following points in mind before venturing into the world of shared housing:


  • Owners must purchase homeowner’s fire, hazard and liability insurance, and general commercial liability insurance with limits of not less than $1-million per occurrence, as mandated by code.

  • Short-term vacation rental guests pay a 23.4% sales tax on their stay. Hotel clients pay a 17.4% tax.

  • There will be ongoing housekeeping costs, including the maintenance of guest registration records, provisions of soap, towels, linens, plus cleaning and sanitizing of the vacation rental unit after each guest departs.

  • If the unit is subject to restrictions by a homeowner association or board of directors, owners must document that the association or board has not adopted bylaws prohibiting the use of short-term vacation rentals at the property.

  • The unit may be inspected by the City of Chicago Department of Buildings. Additional costs to the owner may be created in the form of building code violations, notices and/or fines.


For a full copy of the Shared Housing Ordinance, visit:

www.chicago.gov/city/en/depts/bacp/supp_info/sharedhousingandaccomodationslicensing.html.


For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.

“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”

 

Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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