Executive Overview: Are Short-Term Rentals Allowed in Hillsboro, IL?

Yes, short-term rentals are allowed in Hillsboro, Illinois, but they require special approval. Based on the provided documentation, short-term rentals are permitted through a Special Use Permit process in specific zoning districts. The most recent evidence shows a property owner in Hillsboro successfully requesting a Special Use Permit for two short-term rental units at 823 Main Street, located in the C-2 Central Business District. This indicates that short-term rentals can operate in commercial zoning areas with proper approval from the city's planning and zoning authorities.

How to Start a Short-Term Rental Business in Hillsboro

Step 1: Understand Zoning Requirements

• Identify your property's zoning district through the City Zoning Code (Chapter 40)
• Verify allowable uses for your specific zone - commercial districts like C-2 Central Business District appear to accommodate short-term rentals through Special Use Permits
• Review setback, parking, and density requirements for your zoning district

Step 2: Apply for Special Use Permit

• Submit application to the Combined Planning & Zoning Board
• Provide detailed site plans and operational descriptions
• Attend public hearings to present your case to the Board
• Pay applicable fees (specific fee schedules available through city offices)

Step 3: Obtain Required Business Licenses

• Business license from the City Clerk's office
• Any additional permits required for your specific property type

Step 4: Ensure Compliance

• Meet building codes and safety requirements
• Maintain property standards per city codes
• Register with local authorities as required

Required Documents, Permits, Licenses, and Guidelines

Core Requirements

1. Special Use Permit - Required for short-term rental operations
2. Business License - Through the City Clerk's office
3. Building Compliance - Must meet all applicable building codes
4. Site Plans - Detailed layout and operational plans for permit applications

Application Materials

• Property ownership documentation
• Site plan and floor plans
• Operational business plan
• Parking and access arrangements
• Fire safety compliance documentation
• Insurance verification

Ongoing Compliance

• Annual license renewals
• Property maintenance standards
• Nuisance abatement compliance
• Tax registration and remittance

Specific Regulations: City, County, and State Level

City-Level Regulations (Hillsboro)

Zoning Requirements:

• Special Use Permit required for short-term rentals
• Operates within C-2 Central Business District and potentially other commercial zones
• Must comply with Chapter 40 - Zoning Code provisions
• Subject to Planning & Zoning Board approval process

General Business Requirements:

• Business license requirements (Chapter 7 - Business Code)
• Property maintenance standards (Chapter 6 - Buildings)
• Nuisance regulations (Chapter 25)
• Parking requirements (Chapter 24)

Permitted Zoning Districts:

• C-2 Central Business District (confirmed via recent permit approval)
• Other commercial districts may be considered case-by-case

County-Level Regulations (Montgomery County)

No specific county-level short-term rental regulations identified in provided content.

State-Level Regulations (Illinois)

Municipal Authority:

• Illinois municipalities have broad authority to regulate businesses (65 ILCS 5/1-2-1)
• Hillsboro operates as a non-home rule municipality under Illinois law
• State fire safety and building code requirements apply

Consumer Protection:

• Illinois Consumer Fraud and Deceptive Business Practices Act may apply
• Local health department requirements for transient accommodation

Contact Information for Local Authority

City of Hillsboro

Primary Contact:

• City Hall: 447 South Main Street, Hillsboro, IL
• Phone: (217) 532-5555
• Email: Contact through city website or city clerk's office

Planning & Zoning:

• Phone: Contact City Hall for Planning Department
• Email: Contact through City Clerk
• Meeting Schedule: First and third Tuesdays at 7:00 PM at City Hall

Building/Zoning Department:

• Phone: Contact through City Hall
• Address: City Hall, 447 South Main Street

ADA Coordinator:

• Contact: Jackie Heimburger
• Phone: (217) 654-9891

City Clerk/Treasurer:

• Office: City Hall
• Phone: (217) 532-5555

Key Source Documents and Links

Primary Source Documents

1. Hillsboro City Code (2023 Edition) - hillsboroillinois.net/wp-content/uploads/2023-code-1-1.pdf

   • Contains comprehensive municipal regulations including zoning, business licensing, and property standards
   • Updated through 2023 with most recent amendments

2. Highland Planning Board Agenda (November 5, 2025) - www.highlandil.gov/Boards%20and%20Commissions/Combined%20Planning%20&%20Zoning%20Board/Agendas/2025/11-05-2025%20CPZB%20Mtg%20Agenda.pdf?t=202510241444160

   • Contains actual STR permit application example from Hillsboro property
   • Demonstrates current application process and requirements

Additional Resources

• City of Hillsboro Official Website: Available through city hall contact
• Montgomery County Planning Department: For county-level guidance
• Illinois Municipal League: For state-level regulatory context

Important Notes for Investors

Market Conditions:

• The recent approval of STR permits indicates an active, supportive regulatory environment
• The C-2 Central Business District zoning provides a proven pathway for STR operations
• Planning board meetings are well-documented with opportunities for public input

Regulatory Precedent:

• The Dylan Richter case at 823 Main Street establishes a clear precedent for STR operations in Hillsboro
• The Special Use Permit process is established and functional
• The city demonstrates willingness to approve appropriate STR applications

Next Steps for Investors:

1. Property identification within appropriate zoning districts
2. Pre-application consultation with planning officials
3. Professional preparation of permit applications
4. Stakeholder engagement during public hearing process

This analysis is based solely on the provided documentation. Given the recent nature of STR development in Hillsboro, investors should verify current regulations and application requirements with city authorities before proceeding with acquisitions or applications.