Hosts and residents say neighborhoods with Airbnb listings are seeing an impact. But safety and gentrification fears linger.
Zafar Mawani, a property manager in the South and West sides, spent $50,000 and over a year renovating his four-bedroom East Garfield Park house, adding a bar, a porch, window treatments and Victorian-era-style modern home decor. Anxiously awaiting the arrival of his first Airbnb guest last summer, he was dismayed when she was put off not by the home, but the neighborhood.
His block, at West Adams Street east of California Avenue, is lined with brick houses ranging from well preserved to cheaply renovated. On the other side of California Avenue, a parked police car silently flashed its lights on a recent morning. Mawani, a property manager and real estate agent, stresses the area’s safety and warmth, thanks to the growing sense of neighborliness.
His neighbor, Ruby Taylor, came over to speak with the guest to assuage her concerns. She still canceled, but “the fact that Ruby Taylor came to talk to my guests shows the kind of people who live here,” he said.
In this West Side neighborhood, things have changed over the last few years: Houses have changed hands, prices have increased, and the faces on the block are becoming more diverse, he says. Despite some skeptical tourists, he adds, nearby areas within 10 minutes’ drive to the downtown Loop are quickly emerging as hotspots for visitors booking on short-term rental platforms.
Tereza Vetvickova, a recent guest from the Czech Republic at Mawani’s East Garfield Park property, considered price, appearance and distance to a conference she was attending at Merchandise Mart. She said she and her colleagues were “a bit surprised” by the neighborhood, “but we didn’t feel unsafe.”
With over 8,000 listings in Chicago, Airbnb’s fastest growing areas are now the South and West sides, where the number of listings grew 20.5% and 5.1% in 2018, respectively, according to data provided by AllTheRooms.com. Hosts and residents say the activity reflects ongoing economic revitalization.
Airbnb claims its platform creates a $345 million economic impact in Chicago, and that guests to the city spend $171 a day at neighborhood small businesses, based on combining guest spending and host earnings from a 2017 survey. Company spokesman Ben Breit says the South Side is particularly fast growing due to the lack of hotels in areas like Bridgeport and Woodlawn.
Mawani sees his six Airbnb listings in East Garfield Park, South Shore and Oak Park as not only income streams, but investments in neighborhood renovation. He says the areas were already undergoing an economic renaissance, but his landscaping projects inspired a better appearance and ambience. “We may not have turned the block, but we may have reinforced the change,” he said.
James Craig, a neighbor near Mawani’s South Shore house on East 74th Place, says the block has improved “dramatically” since the renovations showed residents that improvement is possible.
“I’ve seen my neighborhood go from beautiful to hell. … It was like the neighborhood was losing its essence,” Craig said, referring to the changes since the 1970s. But the environment has improved especially since 2005, and he wants tourists to witness it.
“Everyone wants to keep the neighborhood clean now. They start working with police instead of against police. Everyone wants the neighborhood to be nice and safe,” he said. “People can from come out of town and say, ‘It’s beautiful here.’”
Forming an identity
Elisa Davis, a lawyer who lives across the street from Mawani’s East Garfield Park property, says the block has matured from “pre-cute-neighborhood-name West Side” when she moved in 2009 to a community with its own identity. And the couple of Airbnb listings on their block are a good sign, she says.
Nowadays, neighbors look out for each other. Rather than complain about a party that Mawani’s guest hosted, she says she alerted Mawani because she thought he’d want to know.
Neighbors now feel more motivated to pick up trash on the block and spruce up their homes. “I’m thinking I need to clean up, put plants out and change the front door, with this beautiful house across the street,” Davis said. “I am inspired to beautify my house.”
Mawani also notes his Airbnb work has created jobs in cleaning and construction. Andrea Junco, who struggled to make ends meet as a part-time lunchroom cook in nearby public schools, says she enjoys the freedom and more frequent hours of working as a cleaner and manager for Mawani’s properties. It’s also opened some work opportunities for her college-aged daughter.
“Before this job, we were tight on money. Now we’re more flexible,” said Junco, whose husband does construction on Mawani’s future listings. “I enjoy more what I’m doing now. No one tells me how to do my job.”
Airbnb vs. Chicago
But as in many cities globally, hosts have been caught between the fraught relationship between Airbnb and Chicago. Controversial city ordinances in 2016 and 2017 required vacation rental platforms and their hosts to register and pay for a city-approved license, enabled fines for license violators, and allowed property owners to ban hosting in their buildings. Hosts also now pay 23% in taxes including a special 6% surcharge, which the city says goes toward helping the homeless and victims of domestic violence.
In all, the city government has earned over $11 million from Airbnb-related taxes, registration fees and violation fines since 2016. Chicago charges intermediaries such as property managers $10,000 a year plus $60 a year per property, and Airbnb and HomeAway pay the same amount per 1,000 listings on their respective platforms. The city has slapped $295,000 in fines since 2016 on hosts who failed to obtain a license, delist, print their license number on their website or provide accurate information, according to data obtained May 14 from the Administration Hearings Department.
Through an automatic tax collection agreement, Airbnb sent $3.2 million from hosts’ earnings to the city in 2017 and $8.2 million in 2018.
Leila Mendez, a Lower West Side host in Pilsen, says she is frustrated by the ordinances and new taxes, which have halved her income. When hosts pull out due to slimmer margins, it hurts the local economy, she says.
“When [tourists] stay in someone’s home, they go downtown, but they also eat in the neighborhood where they’re staying and become interested in other neighborhoods,” she said, adding that local business owners would thank her when they learned the foot traffic came from her guests.
“It’s terrible that Airbnb and the city allowed this to happen,” she added.
Airbnb often highlights events like Lollapalooza in which South Side hosts on average earned $465 over the four-day festival last year. But pinpointing the home-sharing network’s long-term benefits on local economies is less clear.
Researchers at Purdue University found Airbnb is not the economic driver in majority black neighborhoods that it is in majority white neighborhoods. In their study, which analyzed restaurant traffic and employment in some U.S. cities, they found Airbnb activity in Chicago’s nonwhite neighborhoods did not lead to a statistically significant improvement in new jobs created. They also found guests more often leave reviews with negative perceptions of safety in predominantly black neighborhoods.
“People just assume digital transformation means we all can benefit equally,” said Mohammad Saifur Rahman, associate professor at Purdue University’s Krannert School of Management and the paper’s coauthor. “They’re virtually equally accessible for all of us, but … our local realities are very different. The benefits we get from digital transformation are very unequal.”
Fears of crime, gentrification
Airbnb has received flak as neighbors complain about noise and parties from guests. Aldermen in the 13th and 23rd wards near Midway Airport have shut down short-term vacation rentals in several precincts altogether, while over 2,000 buildings citywide have banned the activity. Recent shootings at Airbnb parties in Logan Square and North Lawndale and a Lincoln Park SWAT standoff have added to jitters.
Shorge Sato, a host and real estate attorney who runs host activist group Keep Chicago Livable, plays down the horror stories as media hype. “The reason we enacted these ordinances was the parties and noise, but the data shows zilch,” he said, noting Airbnb claims the property damage incident rate is 0.004%. “Technology is getting better to stop parties and vet guests.”
The concerns over Airbnb are different for Byron Freelon, board president of the Woodlawn Chamber of Commerce. He says his South Side community — which Airbnb says is among its fastest-growing Chicago neighborhoods with 83 active listings — welcomes small entrepreneurs and the development associated with hosting, but voices concerns about future gentrification and rental unit availability.
“I don’t think Woodlawn is at that point yet,” Freelon said. “The chamber wants to see robust economic development in the neighborhood, but we want to see long-term residents open up businesses and thrive.”
Craig, on the other hand, says the activity is transforming his block into his grandmother’s version of South Shore. “Now people care for each other’s lawns, picking up each other’s paper,” he said. “I want to be here to witness the day when everything is back to normal again, where you can sit on the porch again, and you have no problem with enhancing the property or inviting your friends.”
Mayor Lori Lightfoot, inaugurated in May, has not yet clarified her stance on short-term rental hosting. Mendez hopes she removes the 6% surcharges and supports the Airbnb movement. “It would help the city because it’s a good way to build tourism. But we’ll see how strong she is,” she said.
Airbnb hosts’ long-term success, Mawani says, is tied to their commitment to investing in the neighborhood. “Prosperity is dependent on a virtuous cycle. The more we do on the block, the more guests want to go there,” he said. “It would create a positive impact on our community.”