Short-term rentals limited to 1 unit/property? (Chicago Airbnb)

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Short-term rentals limited to 1 unit/property? (Chicago Airbnb)

Kevin Yun
Member since 2019 · 6 posts · 1 vote

Hey BP,

I am considering purchasing a 3 or 4-flat in Chicago, and planning out my rental strategy (STR and/or LTR).

After speaking with an STR (Airbnb/Vrbo) management service today, the owner informed me that only 1 rental unit per building can is allowed. What that means is that if I were to buy a 3/4-unit, only 1 unit could be for Airbnb rentals.

This is strange, because I was recently considering a 3-flat in which the owner was pitching Airbnb'd out rental figures. That means they were either grandfathered in(?) and aren't aware of this limit, or that 3 Airbnbs is illegal within the same property/building?

I'll be speaking with a lawyer later this week, but wanted to see if anyone knew info on this. The best I could find is the Chicago ordinance reference (https://www.chicago.gov/content/dam/city/depts/bacp/ordinances/sharedhousingordinanceversionfinal.pdf), but still not quite sure.

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John Clark
Member since 2018 · 1k+ posts · 1k+ votes
7y
Be wary of AirBnB or other short term rental situations as a way of making your numbers work in Chicago. The aldermen aren't all in AirBnB's pocket yet (later, to be sure), and you don't want an aldercritter banning STRs in his ward after you've committed to the property.

Work the numbers with three long term rentals, and see how high you can push the rent quickly, 'cuz rent control is coming to Chicago
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  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    7y
    Be wary of AirBnB or other short term rental situations as a way of making your numbers work in Chicago. The aldermen aren't all in AirBnB's pocket yet (later, to be sure), and you don't want an aldercritter banning STRs in his ward after you've committed to the property.

    Work the numbers with three long term rentals, and see how high you can push the rent quickly, 'cuz rent control is coming to Chicago
    1Reply
  • Kevin Yun
    OP
    Member since 2019 · 6 posts · 1 vote
    7y

    Thanks John. I am 100% with having LTR tenants, however wanted to also test the waters with STRs in the market

    0Reply
  • Jeff Burdick
    Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes
    7y
    Originally posted by @Kevin Yun:

    Hey BP,

    I am considering purchasing a 3 or 4-flat in Chicago, and planning out my rental strategy (STR and/or LTR).

    After speaking with an STR (Airbnb/Vrbo) management service today, the owner informed me that only 1 rental unit per building can is allowed. What that means is that if I were to buy a 3/4-unit, only 1 unit could be for Airbnb rentals.

    This is strange, because I was recently considering a 3-flat in which the owner was pitching Airbnb'd out rental figures. That means they were either grandfathered in(?) and aren't aware of this limit, or that 3 Airbnbs is illegal within the same property/building?

    I'll be speaking with a lawyer later this week, but wanted to see if anyone knew info on this. The best I could find is the Chicago ordinance reference (https://www.chicago.gov/content/dam/city/depts/bacp/ordinances/sharedhousingordinanceversionfinal.pdf

    ), but still not quite sure.

     I don't know anything for sure and I'm glad you're talking to an attorney.  


    But my guess is that there are no 'grandfathered in' AirBnB units.  That law is like three years old.  Grandfathered in generally comes from properties built like a century ago and the zoning or building codes changed through the decades but the city decided to allow the ones that have been in existence for decades to remain the same.  

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  • Jeff Burdick
    Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes
    7y
    Originally posted by @John Clark:
    Be wary of AirBnB or other short term rental situations as a way of making your numbers work in Chicago. The aldermen aren't all in AirBnB's pocket yet (later, to be sure), and you don't want an aldercritter banning STRs in his ward after you've committed to the property.

    Work the numbers with three long term rentals, and see how high you can push the rent quickly, 'cuz rent control is coming to Chicago

    I'll believe that when I see it.  

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  • Mark Reitman
    Rental Property Investor · Chicago, IL · Member since 2018 · 53 posts · 54 votes
    7y

    Hey @Kevin Yun, It's my understanding that for any building four units or less, the registered host has to live in the building as a primary residence and can only Airbnb one's own unit and one other. If you don't live in the building, it needs to be at least five units and only 25% of the units can be STR, up to a max of six.

    1Reply
  • Kevin Yun
    OP
    Member since 2019 · 6 posts · 1 vote
    7y

    @Mark Reitman thanks for confirming, that lines up to what I read in the ordinance doc.

    I would say I did a lot of research/reading, but this specific regulatory piece of information was something I had to stumble across.

    Makes me wonder how many owners (with <5-unit properties) are unknowingly STR'ing their properties

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  • Conrad LegéPro Member
    Chicago, IL · Member since 2017 · 104 posts · 35 votes
    7y

    Hi Kevin,

    You're right, the current ordinance limits one STR per small multi-family building. However as you also mentioned not everyone plays by the same rules.

    I operate a STR and help others manage theirs. PM if you want to connect.

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