Saying she doesn’t
believe the rules impinge the constitutional rights of homeowners and others
wishing to share their homes with guests through Airbnb and similar websites, a
federal judge has refused to bar the door to a new Chicago ordinance regulating
so-called home-sharing arrangements in the city.
On March 13, U.S.
District Judge Sara Ellis sided against a group of homeowners and others who
had either listed property through Airbnb, VRBO or other home-sharing sites, or
stayed as home-sharing guests through the
popular sites, denying their request for an injunction blocking the city’s
regulatory ordinance from taking effect.
Judge Ellis noted
throughout her opinion her doubts concerning the ability of the plaintiffs in
the case to either demonstrate how the ordinance trespasses on their
constitutional rights, or how they would suffer irreparable harm, should the
city’s rules be allowed to take effect.
And, the judge
said, she believed the “balance of harms” leans in favor of the city, which,
she said, had a legitimate interest in “putting into place a more orderly
system for the home sharing industry.”
peddlers who hawk their goods but are lawfully subject to a regulation as to
where they sell those goods, the City may lawfully subject home sharing to
regulation without implicating the First Amendment because the (ordinance)
regulates conduct - the temporary rental of property in exchange for money -
instead of speech,” Ellis wrote.
the ordinance had landed in federal court in late 2016, when the group known as
Keep Chicago Livable and plaintiff Benjamin Wolf stepped forward as the first
to challenge the ordinance. Other plaintiffs, including owners of single family
homes and condominiums and apartment tenants, joined their names to the legal
action. Other named plaintiffs include Susan Maller, Danielle McCarron,
Antoinette Wonsey, Monica Wolf and one other man, identified only as John Doe.
asserted the city’s rules violated the constitutional rights of those seeking
to rent homes, condos, apartments or rooms through the home-sharing sites.
alleged they had already been harassed by neighbors, police officers, city
employees, condo associations and landlords, among others, and feared their
plight would grow worse, should they be required under city rules to publicly
identify themselves and register the properties.
complaint, Keep Chicago Livable and other plaintiffs specifically alleged the
ordinance’s requirements would trample hosts private property rights and
freedoms of speech, association and due process.
“The Shared Housing Ordinance, which purports to attempt to
regulate the phenomenon of home sharing on internet sites such as Airbnb,
HomeAway, FlipKey and VRBO, in fact operates as a de facto and in some cases
outright ban on the use of internet home sharing services, and violates the
constitutional rights of Chicagoans to speak and communicate freely and
anonymously on the internet, to use their own property, to have privacy, and to
not be subject to arbitrary and discriminatory enforcement of the laws,” the
Supporters of the ordinance, which was approved last summer, said
the rules were needed to strengthen the ability of the city to police
short-term rentals of condos, apartments and homes in the city’s neighborhoods
and high rises. Supporters said the regulations arose in response to complaints
from neighbors of the rented properties who said the short-term tenants
disrupted their neighborhoods or their buildings, and threatened public safety.
The hotel and motel industry had also complained, saying the
home-sharing platforms, like Airbnb, enabled building owners to essentially run
small hotel operations using otherwise vacant homes and apartments,
sidestepping city hotel regulations.
The ordinance had
been scheduled to take effect in December, but the city postponed that date to
give the court a chance to rule on the plaintiffs’ injunction request.
In the meantime,
the Chicago City Council amended the ordinance, to address some of the
plaintiffs’ complaints, including removing a provision which had claimed the
power to force home-sharers to give city officials access to their records,
including guests’ personal information, without a warrant.
plaintiffs continued their legal action, asking the judge to block the amended
ordinance, as their attorneys asserted the remaining rules still violated home
sharers’ constitutional rights.
however, disagreed, indicating she believed the city would ultimately prevail
on the key questions of whether the ordinance violated home sharers’ free
speech, association and due process rights.
Home sharers had
argued the home sharing process was fundamentally different from hotels, or
even apartments, as home sharers obtain a number of social and intangible
benefits, going beyond mere profit, from the home sharing arrangement.
sided with the city in declaring she believed the process of listing a property
on Airbnb and similar sites was a commercial act, so listing a property on such
platforms falls under the category of “commercial speech,” which is more open
to government regulation.
appeared to hint the property owners could find more success in their arguments
against the “maximum caps” provision of the ordinance, which limits the number
of properties in certain buildings that can be listed on home-sharing sites.
But the judge said, to date, the home sharers had not presented any arguments
to persuade her they would prevail on that point, either.
challenge fails at this stage because they have not provided the Court with an
explanation for why the maximum caps provision is vague in all of its
applications,” the judge said. “Instead,
they themselves make only vague references to the simplicity of the argument
and how it needs no further explanation. But such a conclusory explanation does
not suffice to carry Plaintiffs’ burden of demonstrating likelihood of success
on the due process claim.”
are represented in the action by attorneys Shorge Kenneth Sato, of Shoken Legal
Ltd., of Chicago.
city is represented by attorneys with the City of Chicago Department of Law.