Woodstock is looking apply its 5% hotel-motel tax applies to short-term vacation rentals in town operated through sites like Airbnb.

The city has had the tax on the books, but it doesn’t account for the availability of short-term rental services like Airbnb and VRBO.

Proceeds from the tax go to nonprofit organizations aiming to bring more tourism and overnight stays to Woodstock.

City officials estimated in a memo that there are 14 short-term listings in town and estimated the new tax could bring in around $19,000 per year, but acknowledged short-term rental activity can fluctuate.

City officials said they also had a meeting for stakeholders, which they promoted via social media and other efforts.

According to the memo, two short-term rental operators were there, and one of them suggested dropping an exemption for nonprofit organizations housing clients in hotels. The operators weren’t against the tax but were worried the tax could be a first step to more restrictions.

But the city staff wrote that short-term rentals are an important lodging option in town and expected it to stay that way.

Jessica Erickson, the city’s economic development director, said the city contacted every lodging operator registered with them. Woodstock started a business registration program in 2024, but officials conceded it doesn’t have much teeth.

She added that the city sent postcards to commercial addresses when the business registration program began, but Airbnbs aren’t at commercial addresses. She said it was “incumbent” on short-term rentals to make themselves known so they can access resources and information like the community conversation.

Council member Gregg Hanson said he felt the city didn’t do its due diligence in its efforts, saying in part that the social media posts assume everyone is looking at social media, and they might not be. He added that some businesses might not have known they were supposed to register with the city, but other officials disputed that.

Mayor Mike Turner said the city publishes information on every platform and Woodstock does an “excellent” job communicating to outside parties.

Hanson said with 14 people, the city could have sent a letter, but others said the 14 short-term rentals in Woodstock could be owned by just a few operators.

Erickson said there isn’t any registration or licensing process for short-term rentals in Illinois, which she said was similar to rideshare services when they first got started.

“They’re not regulated. We don’t have any regulations for them,” Erickson said of short-term rentals, adding you can find them on Airbnb, but don’t get the address unless you book a night there.

She said the city has a technology source that tells them where registered short-term rentals are, but they didn’t know that beforehand.

Hanson asked about other municipalities in the area, and Erickson said most in Illinois have a hotel-motel tax. She added that Woodstock is proposing leaving it at 5%, but when the tax came into existence, short-term rentals didn’t exist. State law caps the tax at 5%, but home-rule communities can go beyond that.

Hanson suggested Woodstock consider raising its tax while reviewing the ordinance because “we seem to be in a revenue deficit.”

City staff proposed getting rid of a current exemption that allows owner-occupied facilities with five or fewer guest units not to pay the tax.

Hanson said he felt the proposed changes were a major rewriting of the ordinance. Erickson said the changes are about modernizing the language and making sure the tax is paid equitably by all lodging operators. She added that the intent of the ordinance wouldn’t change.

Woodstock has some exemptions to the tax on the books, including nonprofits and government agencies needing to provide emergency shelter.

Hanson said he supports emergency housing, but that social services are being “overrun” in town, and people feel like there’s a lack of good lodging in town. He said he wants to see other communities share in the burden of providing social services.

The city didn’t formally pass anything Tuesday evening, and any regulations would need to come back at a later date. But the council was interested in taxing the Airbnbs in town as well as dropping any exemptions for them.

Woodstock is not the first Chicago-area community to take up regulating short-term rentals in recent weeks.

Arlington Heights recently voted to ban short-term rentals, effective this summer. But village officials said they would revisit the issue if the Chicago Bears move ahead with building a new stadium in Arlington Heights, according to the Daily Herald.