Chicago, IL Rental Regulations FAQ 2025

Written by: Sanjin Hadziomerovic

Comprehensive FAQs for Short-Term Rental (STR) Regulations in Chicago, IL

Investing in short-term rental (STR) properties requires an in-depth understanding of local regulations. Below is a comprehensive list of frequently asked questions (FAQs) for STR operators and investors to help you navigate the rules in Chicago, IL and stay compliant while maximizing profitability.

1. What is considered a short-term rental in Chicago, IL?

Under Chicago’s Municipal Code, a “short term residential rental” is “a dwelling unit located within the City that is rented as, or held out as being used as, a shared housing unit, bed-and-breakfast establishment, vacation rental, or dwelling units that require a license or registration under this Code to engage in the business of short term residential rental” (§ 4-13-100).

2. Do I need a permit to operate a short-term rental in Chicago, IL?

Yes. Anyone hosting guests for 1–31 days must register as a Shared Housing Operator through the City’s Shared Housing portal and pay a $125 registration fee. If you intend to register more than one unit, you must first obtain a Shared Housing Unit Operator license (fee $250) before submitting additional registrations (Airbnb Help Center).

3. What are the zoning laws for STRs in Chicago, IL?

STRs are treated as dwelling units within the Residential Use Group and are permitted in all residential districts provided they hold the required license or registration. In “restricted residential zones,” only rentals lawfully established—and licensed or registered—prior to the zone’s creation may continue operations, and they remain subject to the district’s parking and setback requirements (Chicago Zoning Ordinance § 17-4-070).

4. Are there occupancy limits for short-term rentals in Chicago, IL?

A shared housing unit may contain no more than six sleeping rooms, and “transient occupancy” is defined as any stay of 31 consecutive days or fewer (Chicago Zoning Ordinance § 17-4-010).

5. What taxes are short-term rental hosts required to pay in Chicago, IL?

Hosts must pay a 4.5 % Hotel Accommodations Tax, a 4 % Shared Housing Surcharge, and a 2 % Domestic Violence Surcharge. Cook County adds a 1 % Hotel Accommodations Tax, and Illinois state hotel taxes may also apply. Airbnb collects and remits all applicable taxes on behalf of hosts (Airbnb Help Center).

6. What are the safety and health requirements for STR properties in Chicago, IL?

Applicants must submit a Quality of Life Plan detailing measures to address noise, waste, and guest behavior. Hosts must carry appropriate insurance and comply with all applicable building, fire prevention, plumbing, mechanical, and zoning codes as enforced by BACP and the Department of Buildings (Shared Housing License Info).

7. How are noise and nuisance complaints handled in Chicago, IL?

If two or more incidents involving illegal activity or objectionable conditions occur within 12 months at a rental—or on adjacent property—the Commissioner may deem the property a nuisance, notify the intermediary, and potentially suspend its eligibility for listing (Chicago Municipal Code § 4-13-260).

8. Can I manage multiple short-term rental properties in Chicago, IL?

Yes. To register more than one shared housing unit, you must first obtain the Shared Housing Unit Operator license (fee $250) before submitting additional unit registrations (Airbnb Help Center).

9. What are the penalties for non-compliance with STR regulations in Chicago, IL?

Failure to register, uncorrected code or zoning violations, or operating in prohibited zones can result in suspension or revocation of the rental’s registration, removal from intermediary platforms, and fines under Chapter 4-13 of the Municipal Code (Chicago Municipal Code § 4-13-260).

10. Are there any updates or changes to STR regulations I should be aware of in Chicago, IL?

Chicago’s STR regulations were codified effective May 1, 2021, when “conversion units” and “coach houses” were added as eligible shared housing units. The chapter was most recently amended on November 7, 2022 (Amend. Coun. J. 11-7-22), clarifying provisions for restricted residential zones and operator requirements.

11. Can I self-manage my short-term rental in Chicago, IL?

Yes. The City only requires a local contact person (name and contact information) in your registration documents; there is no mandate to use a third-party property management company (Shared Housing License Info).

12. What are the insurance requirements for short-term rentals in Chicago, IL?

All registrants must carry proof of insurance covering guest liability and property damage. Evidence of coverage must be submitted with the registration application and maintained throughout the rental’s operation (Shared Housing License Info).

13. Are there any local rules regarding hosting platforms in Chicago, IL?

Intermediaries (e.g., Airbnb, Vrbo) must hold a Short Term Residential Rental Intermediary license, register hosts, remove unlicensed listings, collect and remit City taxes, and report bi-monthly to BACP (Shared Housing License Info).

14. What are the inspection requirements for STRs in Chicago, IL?

There is no routine STR-specific inspection schedule; however, BACP and the Department of Buildings may inspect any property that fails to meet code, receives nuisance complaints, or during application review for zoning, health, and safety compliance (Chicago Municipal Code § 4-13-200).

15. Are there any neighborhood-specific restrictions for STRs in Chicago, IL?

Owners or associations of buildings with five or more units may prohibit STRs by notifying the Commissioner; those buildings are listed publicly as “prohibited.” Additionally, new rentals in restricted residential zones must have been lawfully established and licensed before the zone’s effective date (Chicago Municipal Code § 4-13-260(a)(9)).

16. Is there a cap on the number of STR permits issued in Chicago, IL?

No numerical cap exists. Any unit meeting licensing, zoning, and safety requirements may register.

17. What parking requirements exist for STRs in Chicago, IL?

STRs must meet the off-street parking standards of their zoning district per Chapter 17-10 of the Chicago Zoning Ordinance, typically one space per dwelling unit unless the district or overlay specifies otherwise.