Peru council approves short-term rentals ordinance that mayor says ‘protects the citizens’

Short-term rentals and bed and breakfasts now may be allowed in Peru as long as they are approved on a case-by-case basis through a special use permit.

More than a month of discussions had passed since the Peru City Council received a special use permit request for a short-term rental property at 4 Center Place by Francisco Sandoval, prompting weeks of discussion between city officials and residents.

Corporate Counsel Scott Schweickert provided the council with a proposed ordinance pertaining to short-term rentals and bed and breakfast establishments that was approved Monday.

“We slowed this down six weeks ago. Now we have rules, regulations, it’s fair to the people that want to do this, but it’s also fair to the residents that live there,” Schweickert said. “They will be notified, a metal sign will be put in the yard.”

The ordinance identifies short-term rentals as “a dwelling unit that is offered for rent to guests for a period of less than 30 consecutive days at a time.” The most common short-term rentals include Airbnb and Vrbo.

I think this is going to be fair and good. It will probably be a living breathing thing and we’ll adjust as we go. But, I think it protects the citizens of Peru and that’s important.”

—  Peru Mayor Ken Kolowski

The ordinance outlines numerous requirements for an operator to obtain a license to run a short-term rental or bed and breakfast, including a $250 application fee, a $50 deposit for a lawn sign for notice of a public hearing, and at least $500,000 of liability insurance through a provider or a hosting platform.

After an operator submits an application to the city, he or she will be referred to the city’s Planning and Zoning Commission, and a date for a public hearing will be set, according to the draft ordinance. Once the public hearing is scheduled, the city will mail a notice to the properties within 200 feet of the subject property.

If the application is approved, the operator will be required to pay a $150 inspection fee every year before license renewal.

Peru Mayor Ken Kolowski said if the city is notified of any problems, they have a strike system in place that will allow them to pull the license.

“This is why we took our time with this, in case we get phone calls. They will get a strike or get pulled instantly,” he said.

Schweickert said the city will get an occupancy tax from the short-term and bed and breakfast rentals. They will require the establishments to use a hosting site, such as Airbnb or Vrbo.

“All those websites put together a host transaction report where you check all of your bookings and your proceeds and stuff you get through the website,” Schweickert said. “And then you have to file monthly tax returns just like our hotels do and pay the appropriate tax based on their gross transactions.”

Sandoval’s special use permit was approved unanimously to its next phase. Alderman Tom Payton was not present during the vote. Kolowski said Sandoval still has to go through Planning and Zoning Commission back to the council and then the inspection process before operating.

The ordinance amending Peru’s code of ordinances to provide for the licensing and regulation of bed and breakfast establishments and short-term rentals and an ordinance approving a text amendment to the city’s zoning ordinance relating to special use for bed and breakfast establishments and short-term rentals in certain zoning districts were approved 7-0.

“I’m glad we took our time with this. I appreciate the effort and work Attorney Schweickert put into this,” Kolowski said. “I think this is going to be fair and good. It will probably be a living breathing thing and we’ll adjust as we go. But, I think it protects the citizens of Peru and that’s important.”