Is Airbnb legal in Chicago?

In Chicago, short-term rental hosts, such as those using Airbnb, must adhere to several regulations to ensure compliance and safety. Hosts are required to secure a business license for their rental properties and may be subject to property inspections. Insurance is a crucial component, with hosts needing to maintain commercial general liability insurance with a minimum coverage of $1,000,000. This insurance must list the City of Chicago as an additional insured entity.

The regulations specify that a "vacation rental" is a dwelling with 6 or fewer rooms available for transient guests, excluding certain housing types like month-to-month rentals, corporate housing, and guest suites. For smaller buildings with 4 units or fewer, the rental unit must be the host's primary residence where they reside for at least 245 days each year.

The application process involves detailed requirements, including proof of insurance, a local contact person for service of process, and ensuring there are no homeowner association restrictions against short-term rentals. There is also a $125 registration fee, and a primary residence must be confirmed through specific eligibility tests.

Additionally, short-term rental bookings of 29 nights or less are subject to various taxes, including Chicago's hotel accommodations tax, a shared housing surcharge, and a domestic violence surcharge. Airbnb facilitates the collection and remittance of these taxes to local authorities. Hosts who register more than one rental unit need a Shared Housing Unit Operator license, which costs $250.

It is crucial for hosts to stay updated with local legislative changes and ensure all requirements are continually met to operate legally within the city.