Nonprofit Sues City of Chicago over Constitutionality of Shared Housing

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Keep Chicago Livable and others have filed a class action against the city of Chicago to challenge the constitutionality of the city’s controversial Shared Housing Ordinance, a measure set to go into effect on December 19, 2016 that purportedly aims to regulate “the phenomenon of home sharing on internet sites,” such as Airbnb, HomeAway, FlipKet and others. The plaintiff, a non-profit formed by Chicago residents, says the new law, while appearing on its surface to be merely regulatory, is actually a de facto ban on the use of online home sharing services, which “violates the constitutional rights of Chicagoans” to communicate freely and anonymously on the internet and use their own private property.

Described by the Chicago Tribune as “dizzyingly complex,” the Shared Housing Ordinance, the complaint alleges, violates the Stored Communications Act by calling for third-party internet service providers to share with the city users’ personal information, transactional histories and other sensitive data without a search warrant. Additionally, on an economic level, the lawsuit says the law creates a trap for unwary renters who may not know that Shared Housing Ordinance rules call for fines of between $3,000 and $5,000 per day per violation, penalties that are “buried inside 57 pages of dense and impenetrable legalese” city authorities knew regular citizens would never read nor understand.

The proposed class covered by the lawsuit is made up of two subclasses: hosts and guests.

The proposed host subclass includes:

• All Chicago residents who own or lease property in the City of Chicago who list their property or a room therein online on platforms such as Airbnb, VRBO, TripAdvisor and similar sites to engage in transient occupancy in exchange for consideration

The proposed guest class includes:

• Anyone who has ever been a guest of a Chicago resident who owns or leases property in the city and who posted a listing on any of the aforementioned online accommodation sites