Proposed Regulations Spur Debate On Airbnb In Chicago

(CBS) -- The city of Chicago wants to crack down on nearly 5,000 Airbnb hosts in Chicago. Those are residents opening up their homes to strangers visiting the city.

But while the mayor proposes new changes many say his proposal doesn't go far enough, reports CBS 2's Audrina Bigos.

For six months, Airbnb host Valerie Landis has opened up her home. It's an extra source of income.

"It's really been a Godsend and a blessing," she said.

Guests rent a room and bathroom for about $125 a night.

"I literally had maybe one or two days I didn't have guests," she said.

Like Valerie, most Chicago Airbnb hosts don't have licenses and don't pay taxes like hotels. So, now, Mayor Rahm Emanuel wants hosts to register their units with the city and buy liability insurance. Guest would have to pay a two percent surcharge and Airbnb would have to get a rental license so the city can regulate it.

43rd Ward Alderman Michele Smith says the mayor's new proposed ordinance doesn't go far enough.

"What we've seen is property owners purchasing several condos or purchasing a three flat and turning it into essentially into an unlicensed mini hotel," Smith said. "That brings with it frat parties, big bachelor parties, bachelorette parties where every weekend these units, which three or four people might live in, are occupied by up to 15 people for a weekend."

The Illinois Hotel and Lodging Association also wants the mayor's proposal toughened up, saying in part, "The decision to not enforce licensing has resulted in an unregulated, illegal market that is equivalent to 17 large hotels."

Alderman Smith wants each unit to be licensed and follow city fire and safety guidelines and occupancy limits.

Valerie disagrees.

"What I do in my own home is my own business," she said.

Airbnb says the two percent surcharge on middle class families makes no sense when hotels aren't faced with the same fee. The company wants a level playing field.