This sign was allegedly posted in front of Olufemi Davies’ Evanston residence just hours after she received a continuance at a City hearing about her alleged zoning violation. (Photo attached as an exhibit to federal complaint)

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Last week a federal court judge issued a temporary restraining order prohibiting the City of Evanston from prosecuting Evanston resident Olufemi Davies for alleged violations of Evanston’s zoning ordinances arising from the short-term rental of her home. The federal lawsuit also seeks monetary damages from the City.

The dispute illuminates the broader question of whether the City’s zoning ordinances allow Evanston homeowners to rent their property for short periods of time, often on websites such as vacationrentals.com, airbnb.com and vrbo.com. Short-term rentals are nothing new, but with the economic downturn and the growing number of online marketplaces, they have been on the rise in communities across the country. A cursory internet search turned up at least 14 Evanston properties listed for short-term rentals, including a “historic mansion” on the lakefront for $4,000 per week.

“My client is not the first person in Evanston to do this but appears to be the first person prosecuted,” said Evanston attorney Jeffrey Smith, who is representing Ms. Davies.

City officials and lawyers have declined to comment, citing the pending lawsuit. Eighth Ward Alderman Ann Rainey, who has been involved in the matter since early June and in whose ward Ms. Davies lives, also declined to comment.

The Lawsuit

Ms. Davies owns a single-family home on the 1500 block of Dobson Street in Evanston. Beginning in May 2012, she has rented it out for short stays on vacationrentals.com. According to Ms. Davies’ signed affidavit, before doing so, she allegedly contacted City personnel about the need for any permits or licenses and was told there were none. After renting out her home in May, however, neighbors complained she was operating an “illegal hotel.”

Ms. Davies allegedly spoke to City officials again and was told the rental activity required no permit and that no Evanston ordinance forbade the activity.

In early June, Ald. Rainey allegedly made inquiries, and on June 15, the City served a citation to one of Ms. Davies’s guests, stating that Ms. Davies was operating a “rooming house” or a “lodging establishment” in violation of the zoning code and ordering her to cease those operations immediately, according to the written notice obtained by the RoundTable. The guests who were present when the citation was delivered requested and received a refund from Ms. Davies.

The citation also advised that she could appeal the determination to the Zoning Board of Appeals (ZBA). A separate administrative hearing on the citation was set for July 12.

In the interim, Ms. Davies continued to rent out her house. She submitted a rental registration form to the City and it was accepted.

At the end of June, according to documents filed in federal court, a family of six adults and an infant was staying at Ms. Davies’ home in order to attend a nearby wedding when Evanston police arrived in response to a neighbor’s complaint. Ms. Davies refunded their rental fee as well.

On July 12, prior to the hearing, Ms. Davies filed an appeal with the ZBA. Under Evanston’s zoning ordinance, an appeal filing stays all further actions. The citation hearing was continued to Aug. 30 in order to give the ZBA an opportunity to consider the appeal.

Ms. Davies’ complaint alleges that at the July 12 hearing, the City’s attorney said the City would continue to prosecute Ms. Davies for ordinance violations. The complaint further alleges that within hours after the hearing, the City placed a sign on her front lawn (see photo) that stated the homeowner was cited for “operating an illegal lodging establishment” and warned that the property was being “monitored by police.” This caused her great embarrassment, the complaint alleges, and loss of rental income.

The complaint also alleges that the City’s actions violated due process by attempting to enforce and punish Ms. Davies before she received any hearing. Corporation Council Grant Farrar argued against the claim in federal court, but Judge Milton Shadur granted Ms. Davies a temporary restraining order effective until Aug. 30.

The Next Step

The ZBA will hear Ms. Davies’ appeal on Aug. 21.

“I expect that the ZBA will look at the law the same way we did and say, ‘This may be something that the City of Evanston wants to regulate, but as of now, it does not,’” said Mr. Smith.

He said it is clear there are gaps in the City’s zoning ordinances.

“My client is not running a hotel, she’s not running a motel, she’s not running a B&B, she’s not running an inn, she’s not running a rooming house,” said Mr. Smith. “She’s renting out her own home which is something that right now, every homeowner in Evanston has the right to do.”