Chicago, Illinois Short Term Rental Regulations

City Code of Ordinances

Renting out your property in Chicago for a short-term period of time might fall into several types:

• Shared Housing Unit - Part or all of a dwelling unit rented to guests through a Short Term Residential Rental Intermediary such as Airbnb. A shared housing unit is required to obtain a Registration approved by the City. The Intermediary must apply and collect hotel accommodation tax on behalf of the shared housing unit host as part of each rental transaction and submit the tax to the City.
• Vacation Rental - a dwelling unit with 6 or fewer sleeping rooms available for rent or for hire for transient occupancy by guests. The term “vacation rental” shall not include a dwelling unit for which a tenant has a month-to-month rental agreement, and the rental payments are paid on a monthly basis, corporate housing, guest suites, or shared housing units. In a building with 4 units or less, the vacation rental dwelling unit must be the licensee’s “Primary residence,” where the applicant lives on a daily basis for at least 245 days in the applicable calendar year. 

Vacation Rental businesses are allowed in these zoning districts: DC, DX, DR, RS1, RS2, RS3, RT3.5, RT4, RM4.5, RM5, RM5.5, RM6, RM6.5, B1, B2, B3, C1, C2. Check your Zoning designation here.  It shall be unlawful to engage in the business of vacation rental for any period of less than two consecutive nights until the commissioner and superintendent of police determine that such rentals can be conducted safely under conditions outlined in rules jointly and duly promulgated by the commissioner and superintendent. No circumstances shall a vacation rental be rented by the hour or for any period of less than 10 consecutive hours. Maximum occupancy limit of two persons, not including a guest's children under the age of 18, per guest room within the vacation rental, or no more than one person per 125 square feet of floor area of the dwelling unit for which the license is issued. For more information, see CHAPTER 4-13 Short-Term Residential Rental Intermediaries and Advertising Platforms and 4-6-300 Vacation Rentals. 

Business License Requirements

A shared housing unit is required to obtain a Registration approved by the City. Vacation Rentals must obtain a license from the City. The City of Chicago considers you a Shared Housing Unit Operator if you plan to list more than one shared housing unit and requires you to obtain a specific license. The Shared Housing Unit Operator License application process and fees can be found here. Register your business with all the appropriate government agencies and check state or federal laws and requirements.

Building and Housing Standards

Chicago has rules and regulations that specify minimum building, design, maintenance standards, habitability, health, and safety requirements. Some rules and regulations that apply to residential and non-residential properties may apply to your listing. Visit the Chicago Department of Buildings for more information.  

Tourist and Local Taxes

The Intermediary must apply and collect hotel accommodation tax on behalf of the shared housing unit host as part of each rental transaction and submit the tax to the City. Vacation Rentals must apply and collect hotel accommodation tax and submit it to the City themselves. Chicago imposes a 4.5% Hotel Accommodations Tax, 4% Shared Housing Surcharge, and 2% Domestic Violence Surcharge on the listing price, including any cleaning fee for reservations 29 nights and shorter.  Cook County also imposes a 1% Hotel Accommodations Tax on the listing price, including any cleaning fee for reservations 29 nights and shorter.  The State of Illinois also imposes certain hotel taxes that may apply to your listing as described in this Illinois Department of Revenue publication.

Other Rules

It is also essential to understand and abide by other contracts or rules that bind you, such as leases, condo boards, co-op rules, HOA rules, or rules established by tenant organizations. Please read your lease agreement and check with your landlord if applicable. Visit the City of Chicago for more information.