Villa Park staff recommends keeping most short-term rentals restricted; board asks for more data

On Feb. 10, 2025, the Village of Villa Park Committee of the Whole heard a staff presentation and public comment on short-term rentals, including listings on Airbnb and VRBO, and discussed enforcement, taxation and potential regulatory responses.

Community Economic Development Director Mark McLaughlin told trustees that short-term rentals (STRs) are accommodations provided in buildings normally used as residences and “are not hotels,” and that Villa Park’s zoning already allows lodging for stays of less than 30 days in specific commercial and mixed-use districts while prohibiting lodging in most residential and lower-intensity commercial districts. McLaughlin said staff had surveyed 13 similar municipalities in the region and found 11 prohibit STRs, one allows them with a license, and one allows them only in a historic district.

The presentation emphasized taxable treatment and enforcement limits. McLaughlin said Illinois law requires STRs to pay the hotel operators’ occupation tax (HOOT) and that hosting platforms such as Airbnb and VRBO may collect and remit the tax to the Illinois Department of Revenue (IDOR) on behalf of hosts. Using a set of assumptions—$100 per night, a 5% HOOT rate and a 55% platform occupancy rate—staff estimated roughly $979 (rounded to $1,000) in annual HOOT revenue per STR, compared with about $150,000 in HOOT receipts last year from the village’s two hotels.

Staff outlined four general policy options: keep the current regulations and rely on complaint-based code enforcement; create a licensing program with inspections and fees; expand allowable districts (including creating special uses in residential areas); or actively recruit traditional, branded hotels to increase HOOT revenue. McLaughlin said staff recommendation was “Do not create a licensing program now. Do not expand it into residential districts,” adding that the village is not on a major tourism body of water and staff would prefer encouraging a hotel over managing numerous STRs.

Trustees and residents described mixed experiences. Trustee Kumar said she lives next to a short-term rental and described repeated neighborhood nuisances—trash cans left out, an open garage and late-night disturbances—and said she “likes the code the way it is at this point.” McLaughlin explained enforcement is primarily complaint-driven, that village staff can investigate and pursue adjudication if an owner does not stop lodging, and that locating STR addresses on hosting platforms can be difficult because many platforms do not show the exact address until a reservation is made.

Several residents who spoke urged caution about an outright ban and described positive experiences. One resident who identified herself as Amanda, saying her unit is an accessory dwelling on her property, said operating through Airbnb was “a wonderful experience for us” and that she used guest screening to reject reservations when concerned. Leslie Allison, another resident, said Villa Park listings had a 4.9 out of 5 rating on Airbnb and argued STRs bring visitors who spend at local restaurants and shops. Other commenters cautioned about investor-owned portfolios and urged the village to consider enforcement burdens, insurance and inspection requirements used in other municipalities.

Trustees asked staff to return with specific follow-up information. Requests included the number of hotel rooms in town and occupancy data, whether IDOR or hosting platforms can provide itemized HOOT remittances tied to Villa Park addresses, and the potential staff time and cost to run a licensing/inspection program so the board could assess a reasonable fee. McLaughlin agreed to provide those figures and to pursue contact with IDOR and hosting platforms if the board wishes.

No ordinance change or licensing program was proposed or voted on at the meeting. The Committee of the Whole did not take regulatory action; the item remained a discussion topic and staff will supply additional data for future consideration.