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).
