City Council Approves Short-Term Rental Regulations

At the August 17, 2026, City Council meeting, the City Council approved an ordinance amending City Code Title 5, Chapter 14, to establish a new process for regulating short-term rentals (STRs) in North Chicago.

The ordinance is intended to address issues associated with short-term rentals while reducing potential impacts on neighboring properties and improving compliance with city rules and regulations.

Under the new program, property owners may use their properties as short-term rentals, such as those advertised through Airbnb, VRBO, and similar platforms, provided they meet the City’s requirements. Short-term rentals will be regulated through the City’s existing landlord licensing program.

The ordinance creates a new short-term rental process through which property owners may obtain authorization to operate a short-term rental under their landlord license. The program will be limited to no more than 25 short-term rental units within the city and will include an additional $50 fee per unit.

The City’s Director of Economic and Community Development will publish the policies, forms, and rules necessary to implement and administer the short-term rental program in accordance with the City Code.

North Chicago’s existing ordinances allow residential properties to be used as short-term rentals, but those properties are subject to the requirements and restrictions of the City’s landlord licensing program. The City periodically receives complaints regarding short-term rental properties that have not been properly registered as rental properties.

The new registration process will help the City identify and monitor short-term rental properties, promote compliance with applicable regulations, and more effectively administer the 9.5% hotel tax that currently applies to short-term rentals in North Chicago.

These updated regulations are intended to provide a clear framework for short-term rentals while helping protect neighboring properties, promote responsible property management, and ensure that short-term rental operators comply with City requirements.