‘This is the future’: Crystal Lake residents, officials ready to take up Airbnb debate

When Tim and Gale Stegenga first found out the house next door would be used as an Airbnb at the end of the summer, they said they didn’t know what to expect.

But the very first renters raised concerns, said Tim Stegenga, who lives on College Street in Crystal Lake.

“They were four young men, tattoos everywhere,” Stegenga said. “They’d come back at 1 or 2 a.m. The day they checked out, the cleaners took out maybe five garbage bags full of beer cans and alcohol bottles. So that’s what was going on there for four days: They were drinking nonstop.”

Stegenga did not call the police over the issue, but since then, he and his wife, as well as neighbors, have been frustrated by the idea of short-term tenants living next door and have brought their concerns to the city.

Their concerns led city staff to propose establishing criteria similar to how bed-and-breakfasts are regulated in the city – a maximum of six guests and at least 250 feet required from any other tourist homes.

But a majority of the members of the Crystal Lake Planning and Zoning Commission said they would be interested in an outright ban on short-term rentals.

Some City Council members, though, were more amenable to allowing, if not encouraging, the businesses.

The Crystal Lake City Council is currently reviewing and refining language for its city ordinances, and city staff and elected officials hope to codify language later this month that lays out where Airbnb-style rental units will be allowed or if they should be allowed at all, city planners said.

As short-term rental homes and apartments have become more common over the past few years, municipalities in the suburbs have taken different approaches to regulating them.

Within McHenry County, rental homes are allowed under certain conditions in Cary, McHenry and Woodstock, but are banned in Algonquin, according to information prepared by Crystal Lake city staff.

Currently, short-term rental homes are not regulated by the city, city planner Katie Rivard said. There were about eight current listings for Crystal Lake as of January.

One of those listings, a home in the 200 block of College Street, is the one adjacent to the Stegengas.

The owners of that home, who live in Arizona – city officials also said they have business in Milwaukee – declined to comment for this story.

The city wants to be proactive addressing concerns and establishing criteria for what is allowed, Rivard said.

“They’re operating under their own guidelines,” Rivard said at the latest Planning and Zoning meeting. “So we want to be proactive to address concerns and establish criteria.”

Criteria the city could consider include a “three-strikes” policy on ordinance violations and buffer requirements between tourist homes or bed and breakfasts and regular neighborhood homes, Crystal Lake Director of Community Development Katie Cowlin said.

Don Barkley of Crystal Lake argued that there needed to be more transparency from the city about its rules and about who was purchasing homes for short-term rental use. He and his wife, Karen, were concerned about their home’s resale and property value if their neighbors were Airbnb homes.

“I’m being penalized,” Barkley said. “Someone from Arizona bought the home across the street and turned it into an Airbnb. That’s a problem.”

Stegenga criticized the city for the lack of oversight and suggested it should collect permitting fees.

A letter from more than a dozen residents on College Street was sent to city officials on Sept. 2, citing concerns about the short-term rental there.

To date, Crystal Lake police have not fielded any calls or complaints about Crystal Lake addresses listed on Airbnb, including the house on College Street, Cowlin said.

Crystal Lake eventually could become a tourist destination with more amenities such as Three Oaks Recreation Area, but the city is not there yet, Planning and Zoning Chairman Jeff Greenman said. He supported, at best, “incredibly restrictive” regulation on such home uses.

“I think, within single-family residential areas, there is absolutely an expectation that the person who owns the home lives there,” Greenman said. “That’s why they moved to that area.”

Greenman said that he was concerned about the possibility of buyers scooping up dozens of homes around the city for rental purposes, while other commission members added that the variety of issues that could arise by encouraging more short-term rental homes made regulation inefficient or ineffective.

“I wouldn’t want a rental home next to me unless someone was living there full-time,” commission member Bob Atkinson said. “There are parking issues, major liability issues. I really struggle with having it anywhere in the city.”

Several City Council members, however, expressed the opposite opinion, and argued for the right of a homeowner to run a business out of their house as long as they were good neighbors.

“I am begging for short-term rentals in Crystal Lake,” City Council member Mandy Montford said. “I am screaming this from the mountaintops. We need a solution. This is the future.”

Currently, there is a lack of options for people who are hoping to stay in Crystal Lake for a few weeks or months, either because they need a place to stay while they look for more permanent options, or had to take care of a family member in hospice for an extended period, Montford said.

Whether Crystal Lake is currently or becoming a tourist destination, there is a long history of Crystal Lake utilizing homes for short-term rentals, particularly along the lake, council member Ellen Brady said.

“If you think about beach cottages on the north shore [of Crystal Lake], people came there in the summer and rented them the rest of the year,” Brady said. “Nobody occupied those homes in the winter [historically]. What is wrong with a company owning a home or multiple homes? We live in a free economy.”

Montford dismissed the idea of “kegger parties and wild nights” as something one might see in Chicago or Miami, but not Crystal Lake, arguing that rentals are held to a higher standard and kept in good condition due to the need for a continual strong reputation to maintain the business.

Airbnb banned parties starting in August 2020, which it codified into permanent policy last June, the company said at the time. The language forbids “disruptive parties” and “party house properties” as part of the rules, the company said. It has suspended more than 6,600 customers from Airbnb In 2021 for attempting to violate the party ban.

Council member Cathy Ferguson said it didn’t matter what people did within a home, as long as it was legal and accepted by the homeowner.

“I’m sorry, but people are allowed to drink alcohol,” Ferguson said.

Correction: A previous version of this story misattributed comments about potential parking and liability issues posed by Airbnb rentals. This story has been corrected to reflect that the comments were from Planning and Zoning Commission member Bob Atkinson. The story also originally misquoted two paragraphs regarding comments about Crystal Lake’s history of utilizing homes for short-term rentals. Those comments were made by Crystal Lake council member Ellen Brady. The story also incorrectly attributed a quote about the possibility of people purchasing homes in Crystal Lake because of the potential cashflow to Planning and Zoning Commission member Natasha Teetsov. She did not say that.