Operating a Housing Sharing Rental in Chicago

In this article we will be discussing What Are the Requirements to Operate a Housing Sharing Rental in Chicago and we answer the questions of:

• ‍What is The Housing Sharing Industry?
• Are Housing Sharing Rentals Regulated by Chicago Municipal Ordinance?
• Do I Need to Register My Unit as a Rental with the City?
• What Type of Registrations Are There?
• What is a Shared Housing Unit?
• What is a Vacation Rental?
• Can My Association Block My Rental Registration?
• Do I Have an Opportunity to Appeal a Registration Denial?
• Is There a Minimum Night Stay?
• Is There a Maximum Night Stay?
• What Is the Penalty for Violating the City Ordinance?

In recent years the use of housing share rentals has become increasingly popular. The creations of websites like Airbnb and HomeAway have opened a new revenue source to many people. To solidify the standards and ensure that the rentals are safe and monitored the City of Chicago enacted a series of municipal ordinances to address these needs.

What is the Housing Sharing Industry?

The Housing Sharing Industry is the short-term rentals of what would otherwise be private residences. Most commonly these rentals are arranged through third-party sites which list the properties for rent and facilitate on behalf of the property owner.

Are Housing Share Rentals Regulated by Chicago Municipal Ordinance?

Yes, beginning 2016 the City of Chicago enacted updated ordinances to address the booming use of housing sharing. The City has enacted regulations related to the taxation, registration, stay requirements, and use restrictions.

Do I Need to Register My Unit as a Rental with the City?

Yes, if you will be using a Chicago property as a short-term rental you are required to register that unit with the City of Chicago. There are no exemptions or grand fathering as it relates to these units so each must be registered to be legally used as a rental.

What Type of Registrations Are There?

The City of Chicago requires a short-term rental be registered as one of three types of unit. The types of registration are a shared housing unit, a vacation rental, or a bed and breakfast.

What is a Shared Housing Unit?

Shared housing unit means a dwelling unit containing 6 or fewer sleeping rooms that is rented, or any portion therein is rented, for transient occupancy by guests. Any units listed for rent on an intermediary site like Airbnb which focus in the rental of rooms or small units must be registered as a shared housing unit. This term is geared more towards apartments, condos, townhomes, or single rooms within a larger building.

What is a Vacation Rental?

Vacation rental means a dwelling unit that contains 6 or fewer sleeping rooms that are available for rent or for hire for transient occupancy by guests. Vacation rentals are not single-room rentals, bed and breakfast establishments, hotels, month-to-month rentals, corporate housing, guest suites or shared housing units. Any units listed for rent on an advertising platform, like HomeAway, which focuses on the facilitating the rental of entire properties, not just a single room, must be registered as a vacation rental.

Can My Association Block My Rental Registration?

Yes. Chicago has established an exempt building list which allows for a Homeowners or Condominium Owners Associations to register with the City of Chicago and inform the City that no registration licenses should be granted within the building or community.

Do I Have an Opportunity to Appeal a Registration Denial?

If you are denied a registration by the City of Chicago, there is an appeal process. If that denial is based on your building or community registering with the City on the exemption list, that is likely something that will need to be dealt with at the association level as Chicago will generally not interfere with association decisions.

Is There a Minimum Night Stay For Chicago Sharing Rentals?

Yes, Chicago does not allow for single night rental stays in a shared housing unit. As such, the minimum stay is two overnights.

Is There a Maximum Night Stay For Chicago Sharing Rentals?

Yes, units participating in the housing share industry are limited to rentals of less than one month in length. These units cannot be rented for 30 consecutive days.

What Is the Penalty for Violating the City of Chicago Ordinance?

The City of Chicago has created some fairly significant penalties for illegally operating a shared housing unit or vacation rental. The ordinance provides that any person operation a vacation rental without having obtained the appropriate license to operate that business can be subject to a fine of at least $2,500 and not more than $3000 per occurrence. Additionally, each day that the ordinance is violated is counted as a separate occurrence so the fines can compound very quickly.