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Student's killing puts spotlight on illegal 'vacation rentals'

(News Item #0185, Published: 11/15/09) SunTimes.com

That's how long the $1.2 million house at 1752 N. Rockwell was on the market before it became a weekend rental, a party house and a crime scene. 

Maybe you've heard the story. College-age kids rented the sleek, uber-modern Humboldt Park pad -- fireplace, rooftop deck and fancy fireplace included -- for a Halloween bash. But it turned into a murder scene when a neighborhood gang-banger allegedly crashed the party, got tossed out, returned with a TEC-9 semiautomatic pistol and started shooting in the wee hours of Nov. 1.

DePaul University student Frankie Valencia was shot dead. His friend Daisy Camacho took a bullet in the neck and survived. Two members of the Maniac Latin Disciples face murder charges. 

The tragic, random bloodshed has shined a spotlight on a local real estate trend fueled by the slumping home sales market: condos, two-flats and even vacant McMansions being rented a day at a time like motel rooms. 

People who know about these things say the "vacation rental" issue once was a "downtown issue" that has slowly trickled into the neighborhoods. Some homeowners facing foreclosure and folks who can't unload condos are willing to rent their places for a day or week at a time just to make extra cash, local real estate watchers say. 

Ald. Brendan Reilly (42nd) already had plans to revive an ordinance regulating so-called vacation rentals in his downtown ward, where some high-rise condo buildings include units rented by the day.

But following Valencia's murder, some aldermen say vacation rental regulations should be enforced citywide. 

"There has to be accountability," Flores said.

Chicago developer Anthony Mazzone designed and built the luxury home on Rockwell where Valencia was murdered and its elegant twin next door. 

In nearly two years, Mazzone hasn't been able to sell either of them.

He turned to Elite Chicago Rental, a Bucktown clearinghouse for posh vacation rental homes all over the city. The group offered to manage, market and rent the place for a split of the profits from renting one of the homes.

The company furnished the place, advertised it online and has leased it while it has been on the market. 

"We work with a lot of developers and help homeowners generate revenue. It's hard to find someone to rent a million-dollar home for a year," Elite owner Mandy Calara said. "This helps carry a property until times get better."

The guy who rented the Rockwell house found it listed on Elite's Web site, which boasted 4-bedroom luxury with "style and sleek written all over it -- from the exterior to the interior. ... Located in a serene family neighborhood." 

Before putting up the cash -- $1,100 plus a $200 cleaning charge for two nights -- the renter, who asked not to be identified, checked out the corner of Humboldt Park where the home shimmers on an otherwise bland stretch of Rockwell.

It seemed like the perfect place. Spacious and clean with minimalist decor, elegant dark hardwood floors, striking rooftop views of downtown and plenty of street parking for guests. On the night of the party, dozens of costumed revelers, many of them DePaul students, showed up, according to witnesses and people who saw surveillance footage. 

It was a nice party ... until things went terribly wrong. Uninvited gang-bangers. Semiautomatic pistols. Gunshots. Blood spilled in the gangway. 

"What we witnessed firsthand was a tragedy. The worst-case scenario," Ald. Manny Flores (1st) said of the shooting. "If you're in a residential community, you don't expect the property next door to be used as a hotel or a place people use to hold special events."

Trouble with vacation rentals in Wrigleyville and Lincoln Park already had inspired two North Side aldermen, Tom Tunney (44th) and Vi Daley (43rd), to begin crafting a companion ordinance to Reilly's proposed regulations for downtown high-rises. 

Valencia's murder, Flores says, might make it time to call neighborhood vacation rentals what they are -- illegal. 

There is no city license for renting vacation property, and there's plenty of debate on whether current zoning laws allow vacation rentals. 

Reilly contends that without his proposed ordinance, it's illegal to rent condos by the day because the practice isn't established in city code.

But folks in the vacation rental business insist they're lawful and legitimate landlords.

"We get leases like any other landlord, and there is no mention in the city ordinance regarding the length of the lease," said Jim Herring, president of the fledgling Chicago Vacation Rental Association and owner of the China Guest House in Lincoln Park. "We are legal, and we've been operating legally all along."

Flores says he's inclined to outlaw vacation rentals in residential neighborhoods unless significant controls are placed on the unregulated businesses. 

It's difficult tell how many vacation rentals are scattered around Chicago. A quick Google search turns up downtown high-rise units, Wrigleyville mansions, Lincoln Park walkups, Bridgeport apartments and River North flats going for $200 to $1,335 a night. 

What's clear is vacation rentals can be a real moneymaker. 

Elite Chicago Rentals dedicates most of its Web site to daily-rate luxury rentals. And Herring says he makes a living by booking short-term renters at his eight properties, including the sailboat he rents like a hotel room.

Herring says vacation rental units are preferred by many international travelers and are an important alternative for locals who need a house while making major renovations to their own home or to host out-of-town guests in a neighborhood without nearby hotels. 

"If the city is so shortsighted to restrict or eliminate vacation rentals, it's shooting itself in the foot," Herring said. 

Still, the money that people are making on vacation rentals and the potential nuisance they can cause on residential streets haven't gone unnoticed by city leaders. 

Tunney said he has had to shut down a few vacation rentals near Wrigley Field after neighbors complained. 

"There are problems with them, and the city doesn't have teeth in an ordinance to control them," he said. "Right now, they don't have business licenses. There's no zoning for a vacation rental. So they're illegal."

Tunney said he hopes new regulations could be in place by next spring.

"Something horrific happened at one of these things, but we're not trying to be reactionary," he said. "We don't want to put people out of business. We want to work with them so the city can make sure they are licensed and safe. We want to get it right."

If that costs a little extra cash or adds a few extra headaches for brokers and property owners, Mazzone says he's OK with that. 

"I have two children of my own. Someone's child got shot at one of our properties. Of course, we had nothing to do with it. But that hits home," he said. 

"I don't know what the answer is but if there's a way to prevent anything like this from happening again, I'm all for it. It might cost us the houses, but at this point I really don't even care."

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