East Dundee board moves to add short‑term rentals to hotel tax code and create registration/inspection process

Staff presented proposed updates to the village’s hotel/short‑term rental code to prepare for anticipated boutique lodging and rental units in redevelopment areas. Caleb (staff) said the changes would allow the village to collect hotel tax on short‑term rentals, require platform collection at point of sale where possible, and establish a registration and inspection program for those units.

Caleb explained the project’s practical steps: revise the ordinance to explicitly include short‑term rentals, work with the Planning, Zoning and Historic Commission to create a permissible use where necessary, and design a registration application and inspection checklist. He said, "we are trying to... add short term rentals online... companies like Airbnb, Vrbo... we would have to add specific language that village attorney and I have been working on." The staff recommendation includes inspecting short‑term units on a three‑year cycle similar to standard rental inspections but allows the board to require more frequent checks if desired.

Trustees discussed marketplace effects, inspection burden on small owners, and statutory limits on municipal hotel tax rates (staff noted a typical 5% municipal limit under state statute). Several trustees supported immediate action to have rules in place as demand grows; others urged modest inspection standards designed for residential properties rather than hotel‑level requirements to avoid shutting down small operators.

The board directed staff to draft an ordinance and a new registration application and to return with the proposal at a future meeting. Staff will also confirm statutory rate limits and best practices for platforms collecting taxes at point of sale.