Chicago short-term apartment rentals prompt potential security concerns in some tenants

CHICAGO (WLS) -- Could hotel-style living be coming to your apartment complex?

Real estate experts call the practice "blended living," combining traditional apartments with home-share and rental companies. This allows travelers to use apartments in much the same way as hotel rooms.

However some renters told the ABC 7 I-Team they were taken off-guard when they realized that management was allowing temporary clientele to use buildings, stairwells and common areas.

"I live by myself so security is number one for me," said Marie DiStasio.

DiStasio shared videos with the I-Team showing how her building stairwell doors could be accessed by short term renters and travelers who stay on other floors. She's concerned with those guests using the amenity floor of the Old Town Park luxury high-rise where she lives.

"I don't know who is coming in and out anymore," she said. "I had to go through a background check, a credit check and now they are just renting these rooms out by the night. "

It wasn't until after she signed her most recent one-year lease that she said she found out some apartments were being rented by the night.

The I-Team contacted the building management, Onni Group, about DiStasio's concerns. They sent a statement saying its hospitality team receives "extensive professional training" and they "offer 24/7 concierge service in all our buildings, guaranteeing immediate response to any requests from tenants or guests, enabling us to quickly handled anything that may arise".

Onni Group added they've "had no issues at our other properties in other markets."

"Chicago, by most standards of the short term rental operators, is the number one destination," explained Susan Tjarksen, an apartment real estate expert with Cushman & Wakefield.

Tjarksen said people who travel for work and pleasure prefer a home setting opposed to a hotel setting. That, combined with the increased profitability for apartment building owners, is driving demand for short-term and long-term apartment renters sharing the same space.

"These are compatible uses, they don't have to be conflicting. We can now have what I would call blended living," Tjarksen said. "People can live harmoniously together in the same building, having separate needs."

"When I'm alone I'm definitely watching out who is coming in the door behind me, who else might be in the hallway, and locking the door as soon as I get inside," Julia Anderson said.

Anderson is another long-term renter concerned about sharing her building with short-term renters. She and her husband live in a converted church in Wicker Park and said they weren't told about the blended-living arrangement.

But Anderson said there are some conveniences to having short-term rentals in your apartment building.

"When people visit us, they don't necessarily have to bunk with us in the apartment, they can stay right next door. That's really convenient," she said.

The I-Team talked to traditional, long-term renters at the South Loop high-rise Essex on the Park, who said they recently found out about the building's offering of short-term rentals.

"I definitely have security concerns about it, I discussed it with them," Brenda Andrews said. "It hasn't been a problem yet, but is something that could be a problem at some point."

"I'm on the fence about it, I haven't had any problems. So I'm hoping nothing bad happens," said Rueben Flores.

Sonder, the rental agency for the converted church and Essex on the Park, sent a statement addressing Essex only: "In addition to two night minimums and photo-ID verification, every guest who makes a booking at Essex on the Park must pass a criminal background check. We also enforce a no-party policy and have a team on-site throughout the day, including professional security at night."

Oxford Capital Group and Bozzuto Management Company, the building's owner and management companies, sent a statement saying: "As lifestyles evolve with more and more people desiring increased mobility and flexibility, we've seen an increase in demand for short-term housing, particularly in cities like Chicago... we only partner with best-in-class short-term rental providers, such as Sonder."

They added that some of their short-term guests have decided to become long-term residents.

Tjarksen said it's important that property managers have open communication with longer-term residents to make sure their needs and concerns are met.

"Renters who are not used to this type of renting should talk with property managers about what the plan is and what security looks like, such as background checks," she said.

But DiStasio said traditional renters should have been told about this new model change in her building before they signed their current leases.

"I moved in here, built a home here and now strangers are coming in and out of it," she said.

The I-Team asked the city's Business Affairs and Consumer Protection Department about the three buildings in our report.

In a statement they said: "The City of Chicago has a strong regulatory structure in place to ensure that short-term rentals occur in a safe and regulated manner. As new business models enter the marketplace... "

BACP "works to ensure that these models fit within our existing regulations and that neighbors have the opportunity to have their issues addressed," the statement continued.

BACP also said it is working to ramp up enforcement and regulation of short-term rentals, especially as these new models rise up.

FULL STATEMENT FROM ONNI GROUP

At Onni's award winning Old Town Park, we have reserved several floors of our units for our hospitality brand 'LEVEL'. LEVEL is a professionally managed hospitality product, fully owned and operated by the Onni Group. LEVEL offers a full service hospitality experience, targeted at the luxury business traveler, families looking for more comfortable, large spaces, and clients relocating to or within Chicago.

LEVEL's team receive extensive professional training, and our in-house management team are in charge of all aspects of the experience, working in conjunction with our best in class staff at Old Town Park.

As a business, LEVEL has been in operation for over a decade, and we manage multiple mixed-tenancy buildings in Los Angeles as well as Vancouver, and will be launching our next property in early 2021 in Seattle. At both LEVEL and Onni we pride ourselves on offering a best in class experience for all our guests and tenants, and have had no issues at our other properties in other markets. We offer 24/7 concierge service in all our buildings, guaranteeing immediate response to any requests from tenants or guests, enabling us to quickly handled anything that may arise.

We look forward to expanding our offering of both multi-family and hospitality properties in Chicago, and are confident any tenant or guest living on our properties will enjoy the best experience available.

FULL STATEMENT FROM OXFORD CAPITAL GROUP AND BOZZUTO MANAGEMENT COMPANY

We entered into a partnership with Sonder in July 2019. As lifestyles evolve with more and more people desiring increased mobility and flexibility, we've seen an increase in demand for short-term housing, particularly in cities like Chicago.

We have a thorough RFP process whereby we only partner with best-in-class short-term rental providers, such as Sonder, who are as committed as we are to creating extraordinary experiences for every resident in our community.

We have five long term residents who were first introduced to Essex through staying with us at Sonder. Getting to test drive the residential experience before committing to a longer lease is a truly unique experience. From the friendliness of the Resident Experience desk staff to cleanliness of a luxurious community, Sonder guests experience hospitality touch points not just in a one hour tour but throughout their stay.

FULL STATEMENT FROM SONDER

In addition to 2 night minimums and photo-ID verification, every guest who makes a booking at Essex on the Park must pass a criminal background check. We also enforce a no-party policy and have a team on-site throughout the day, including professional security at night.