Lawmakers in Chicago introduce Just Cause Eviction Law - 5x market rent $ as penalty

[Henry Lazerow]

Hopefully this does not pass. @Brie Schmidt has been super helpful in fighting for landlord rights. Lets keep everyone informed when the next call to action is!

Seems everyday now more radical policies are being announced. The way I recommend my clients avoid problems is to only buy nice building in areas with high quality tenants, I cannot stress this enough for new investors in Chicago. A good golden rule is only buy a rental property if you would be willing to live there yourself. For example, my 4-unit in Rogers Park has never had a late payment notice needed in 8 years of ownership and of course never an eviction. I raise the rents to market every year and if someone leaves there is enough demand for multiple qualified applicants who are happy to live in a nice rental. On the flip side, there are other neighborhoods in Chicago where numbers look like great cashflow on paper but they have high eviction rates, even sometimes double digit eviction rates where you are heavily involved in Chicago eviction/tenant politics. In areas where the tenants can't afford the rent raise, you get stuck with either high vacancy/turnover or below-market rents. It's very important you NEVER let your rents get more than 10% below market rate with upcoming potential laws like this. It is not passed yet so if anyone has below market units I recomend you raise them immediately at the next lease renewal. Below are some excerpts from the new law.....

City Council lawmakers are hoping to once again bring to fruition the advancement of such protections for tenants this 2025 legislative session. Introduced by Alderman Desmon Yancy (5th Ward), the city’s proposed just cause eviction ordinance (“Record No. O2025-0017516”) would strengthen tenants’ rights in a concerted way, including by (1) requiring that landlords have just cause, such as nonpayment of rent or violation of the rental agreement, to evict a tenant or refuse to renew a tenant’s lease; (2) requiring that landlords provide tenants with relocation assistance if the tenancy is terminated through no fault of the tenant, or if the rent is increased by more than 10%; and (3) requiring property owners to register their rental units in a citywide registry in order to increase transparency in the private rental market.

Tenants who are terminated from their tenancy due to one of the causes listed are entitled to receive relocation assistance in the amount equal to five times the median monthly rent in the city for a unit with the same number of bedrooms.

[Bill B.]

I LOVE how the penalty is 5x “mean rents” not the rent the tenant is paying. As if this lawmaker is actually smart enough to know the only people affected will be people paying way under market. Imagine some old landlord is charging $500/mo when they should be charging $1,200. They can’t raise rents to $1,200 and their penalty is 5 x $1,200 not 5 x $500. 

I also LOVE rent increase caps without insurance and property tax caps. So they can literally drive landlords out with non-owner occupant tax increases of w0% per year for 5-10years. 

Assuming that doesn’t happen I assume nobody is planning on an average rent increase every year for the next decade to be 10%. So as long as your charging market rent and increase 10% or market, whichever is higher ever year. You SHOULD be fine. I wonder if that smart lawmaker understands he’s forcing rent increases. Maybe they should make all politicians take an economics class.