Chicago, Illinois

Chicago allows short-term rentals of under 32 days, but they are heavily regulated under the Shared Housing Ordinance, and enforcement is rated strict. Every unit needs a city registration number, and the annual registration fee is $250. Hosts with multiple units must also hold a Shared Housing Unit Operator License, and properties with 2 to 11 sleeping rooms serving breakfast need a Bed and Breakfast license. A primary-residence requirement applies: single-unit homes and 2 to 4 unit buildings must be the host’s primary residence, lived in 245 or more days per year, and 2 to 4 unit buildings are limited to one rental unit. Buildings with 5 or more units have no primary-residence rule but cap STR units at one-quarter of dwelling units or 6, whichever is less. Registration includes a zoning review and a check against the city’s prohibited buildings list of more than 2,300 buildings, and the city keeps adding buildings to that list. Hosts must carry at least $1,000,000 in commercial general liability insurance naming the City as additional insured. The combined city tax is 10.5%, made up of a 4.5% Hotel Accommodations Tax, a 4% Shared Housing Surcharge, and a 2% Domestic Violence Surcharge, and the composite rate with county and state taxes reaches roughly 27.75%. Penalties include fines of $1,500 to $3,000 for operating without or with an expired registration, $3,000 plus cease orders for prohibited buildings, and up to $10,000 plus criminal charges for false primary-residence claims. Enforcement relies on platform data-sharing, neighbor complaints, and audits.