Changes approved by Skokie trustees Tuesday could make short-term rentals more appealing to residents looking to gain some extra income by listing their homes on platforms like Airbnb and VRBO.
The 18-month pilot program, adopted in February, aims to regulate these types of short-term stays within the village to improve safety standards and halt outside investors from turning available affordable housing into dedicated vacation properties.
But based upon resident feedback collected during the first six months of the initiative, many former short-term rental hosts found the village’s program to be overly restrictive and costly – current fees range from $3,650 for owner-occupied short-term rentals to $4,800 for investor-owned units, per village documents, well above those mandated by several neighboring municipalities.
Now, officials are backtracking on these restrictive mandates in the hopes that more lenient rules will compel short-term rental operators to comply with program requirements.
Trustees voted Sept. 8 to advance the following modifications for the remainder of the program:
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- Reduce the fee structure for short-term rentals to a total of $550: a $400 registration fee per dwelling unit and a $150 operator rental license fee.
- Reduce the five-night stay requirement to one-night. Hourly and part-day rentals will remain prohibited.
- Remove the limit of 18 stays per property during the pilot period. Listings may be rented out more frequently than once a month for the 18-month pilot.
- Data collected from the pilot period will be assigned to one or more commission advisory Boards for review in the future.
Officials clarified these adjustments will only apply to owner-hosted properties, where homeowners are present for the full duration of a visitor’s stay.
Policy revisions will not apply to owner-occupied properties (homeowners who vacate their housing during a visitor’s stay) or investor-occupied rentals (owners do not live at their properties).
According to Skokie’s Community Development Director Johanna Nyden, of the two current short-term rental listings in full compliance with the village’s licensing standards, neither is an owner-hosted property. The village currently has no registered investor-owned listings, she said.
Participation in the program requires operators to submit a formal application to determine eligibility, attend operator training, provide a notice to surrounding neighbors, pass a property inspection and pay all applicable fees, village documents confirm.
Nyden told trustees at the start of the pilot, officials located 129 active short-term rental listings, 119 of which did not go on to submit an application to apply for a village rental license.
Of the 10 that did, five met the requirements for participation in the program, but only two went on to become fully licensed. As of August, Nyden said 54 non-compliant operators are still in active use in Skokie.
“The simplest way to describe it is a little bit of a whack-a-mole because [operators] can delete their listing, the tool that we use to find this might see a [short-term rental] STR one week, then the next week it doesn’t,” Nyden said.
“The universe we do see getting smaller as time goes on, but this is where we’ve gotten to.”
Next steps will include focusing “more heavily on enforcement,” she added, with extra tools to locate active listings in use and a “pretty broad range of time to spend on enforcement” over the next six months.
No new investor-owned rentals can enter the application process at this point in the program, and only existing units will be allowed to continue operating if they were already registered or were in the process of doing so before Jan. 16, according to village documents.
Several trustees at the Sept. 8 Board meeting questioned village staff’s modification recommendations for the program, citing enforcement challenges and the lack of a plan to reimburse compliant operators for prior fees paid.
“I think that’s terribly unfair,” Trustee Lissa Levy said to Nyden.
“I know that you have spent many, many hours working on this, and I’m grateful for that, but it doesn’t incentivize people who are early adopters and going through this process in good faith…and then later owner-operators can come in and have a much reduced fee.”
“I would also respectfully take issue with the notion that we can’t have a commission, the housing subcommittee, or the plan commission…to look into the pilot thus far,” Trustee Gail Schechter added.
“I voted no on this pilot when we adopted it in February because the research shows that STRs are commercial enterprises, by any other name, that use residential stock as hotels for people who want a convenient bed for a night or two…the new proposal from staff comes to us unfiltered through any commission or community discussion.”
Schechter then offered an amendment to the suggested rental modifications, mandating an advisory committee’s review of future collected pilot data. The motion later passed in a 5-1 vote, with Trustee Alison Pure Slovin dissenting.
Trustees also pushed to amend the owner-occupied clause in the recommendation to only apply to hosted properties where operators are actively present during visitor stays.
“The ability to enforce owner present and owner not present [stays] is very difficult,” Village Manager John Lockerby informed the Board.
“We can try to work through that, but if the individual says that they’re going to be there, but they’re not there, they’re at their vacation weekend, it’s very difficult for the village employee to be able to [track] that.”
“I think with some creativity we can figure that out,” Skokie Mayor Ann Tennes interjected.
“There can be spot testing, I think maybe the ordinance gets tightened up so that, you know, you [break the rules] twice and you’re out.”
Officials ultimately voted 5-1 to approve modifications to the pilot, with Trustee Schechter casting the sole vote against implementing changes to the program.
“I think there’s still a lot of room for us to learn about what to do and how to do it,” said Trustee Keith Robinson.
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“I like the recommendations that we have on the Board…we’ve learned some information, I don’t think it’s bad to have some action steps in between as we move forward.”
Modifications to the pilot program will come back to the Village Board for final approval at an undetermined date, officials confirmed.