Executive Overview: STR Status in Jacksonville, IL

Explicit Answer: Short-term rentals are allowed in Jacksonville, IL proper but PROHIBITED in South Jacksonville (Village of South Jacksonville).

Jacksonville, IL (the main city in Morgan County) currently permits short-term rentals under a regulatory framework that includes licensing, inspections, and tax obligations. In contrast, the Village of South Jacksonville explicitly prohibits short-term rentals in residential zoned areas through Ordinance #1126, adopted December 1, 2022.

How to Start a Short-Term Rental Business in Jacksonville, IL

Market Entry Strategy

For Jacksonville proper, investors should begin with a comprehensive market analysis considering the city's proposed license cap of 12 total licenses. As of February 2024, seven licenses have been issued with three additional applications pending, leaving limited market entry opportunities.

The city plans to treat STR licenses similarly to liquor licenses—when the cap is reached, new applicants must petition the City Council for additional licenses through ordinance changes. This creates a finite market opportunity that requires early action.

Downtown Exemption Opportunity

City officials have indicated specific interest in encouraging second-story revitalization in the downtown area without including it in the license cap. This represents a strategic opportunity for investors focusing on downtown properties, as these would not count against the proposed 12-license limit.

Property Requirements

Properties must:

• Pass city inspections before licensing
• Be suitable for short-term rental use under zoning regulations
• Comply with safety standards and building codes

Required Documents, Permits, Licenses, and Guidelines

City of Jacksonville Requirements

1. Short-Term Rental License Application - Available through Community Development Department
2. Property Registration - Required before license issuance
3. Inspection Approval - Mandatory safety and compliance inspection
4. Hotel/Motel Tax Registration - 8% tax collection and remittance
5. Business Registration - Standard city business licensing

Documentation Process

The city requires full registration and inspection approval before granting licenses. Properties must demonstrate compliance with all safety standards and local regulations. The inspection process ensures properties meet habitability and safety requirements for transient lodging.

Tax Obligations

Jacksonville imposes an 8% hotel/motel tax on all short-term rentals, collected by operators and remitted to the city. Late fee penalties are under review, with proposals to increase from the current 1% to a flat $10-15 fee to improve collection compliance and maintain accurate reporting for state tourism agencies.

Specific Regulations by Jurisdiction

City of Jacksonville (Primary Municipality)

Current Regulatory Framework:

• License cap under consideration (proposed 12 licenses)
• Downtown area excluded from cap
• 8% hotel/motel tax requirement
• Mandatory registration and inspection
• Late fee penalties being enhanced

Zoning Considerations: The city continues exploring zoning parameters for STR operations. City Attorney Daniel Beard, along with Community Development and the Jacksonville Area Convention & Visitors Bureau, is examining zoning and tax policies for future ordinance development.

Village of South Jacksonville (Separate Municipality)

Prohibition Status: Ordinance #1126, adopted December 1, 2022, explicitly prohibits short-term rentals in residential zoned areas. No licenses are issued, and the prohibition is absolute for residential properties.

State-Level Regulations (Illinois)

While no specific state-level STR regulations were detailed in the provided sources, Illinois municipalities maintain home rule authority to regulate short-term rentals. The city's ability to impose licensing caps, tax requirements, and inspection mandates falls within this home rule power.

Contact Information for Local Authorities

City of Jacksonville (Primary Municipality)

Community Development Department

• Phone: (217) 479-4600
• Address: Jacksonville, IL (City Hall)
• Website: www.jacksonvilleil.com/services/community_development/
• Short-Term Rental Application: Available on city website

City Clerk's Office

• Contact Person: Miranda Elliott
• Phone: (217) 479-4600
• Responsibilities: License processing, hotel/motel tax collection

City Attorney's Office

• Contact Person: Dan Beard
• Phone: (217) 479-4600
• Responsibilities: Legal framework, ordinance development

Jacksonville Area Convention & Visitors Bureau

• Executive Director: Brittany Henry
• Responsibilities: Tourism impact assessment, license coordination

Village of South Jacksonville

Village Hall

• Phone: (217) 245-4803
• Fax: (217) 245-5641
• Address: 301 Dewey Drive, South Jacksonville, IL 62650
• Website: southjacksonville-il.gov

Important Considerations for Investors

Market Limitations

The proposed 12-license cap creates a constrained market environment in Jacksonville proper. With seven licenses already issued and three pending, only two licenses may be available immediately, making early application critical for market entry.

Compliance Costs

Investors must budget for:

• Inspection and licensing fees
• 8% hotel/motel tax collection and remittance
• Potential late fee penalties under enhanced enforcement
• Ongoing compliance monitoring and reporting

Strategic Opportunities

The downtown exemption from license caps presents a unique opportunity for investors with properties in the central business district. This area is actively being promoted for second-story residential development, including both long-term apartments and short-term accommodations.

Cross-Boundary Awareness

Properties located within South Jacksonville face absolute prohibition regardless of investment quality or compliance. Investors must carefully verify municipal boundaries before property acquisition, as South Jacksonville properties cannot be legally operated as short-term rentals.

Source Documentation

Primary Regulatory Sources:

• Village of South Jacksonville Ordinance List - Contains Ordinance #1126 prohibiting STRs
• Jacksonville Zoning Ordinance & Map - Official zoning regulations
• Jacksonville Code of Ordinances - Municipal code reference

Policy Development Sources:

• Journal Courier STR License Limit Article - February 2024 license cap discussion
• Journal Courier Airbnb Zoning Article - May 2019 regulatory exploration

Contact Reference:

• Jacksonville Community Development - Official department contacts
• South Jacksonville Village Hall - Municipal contact information

This comprehensive regulatory environment requires careful navigation, with Jacksonville proper offering limited but viable opportunities while South Jacksonville presents complete prohibition in residential areas. Success depends on early application within the constrained license framework and strategic property selection, particularly in the downtown exemption zone.