This guide consolidates the information you provided about short-term rentals (STRs) in Lake Forest, Illinois (and relevant state-level rules) for investors evaluating the market and preparing to operate compliantly.

Overview and Explicit Answer: Are Short-Term Rentals Allowed in Lake Forest, IL?

The provided materials do not identify any city-specific short-term rental ordinance or licensing requirement for Lake Forest. In the absence of local prohibitions, Illinois state law allows short-term rentals as defined by HB 2919 (a residential unit rented for fewer than 30 consecutive days), subject to health and safety standards and tax obligations. Therefore, STRs are allowed in Lake Forest under state law unless and until the city adopts local restrictions. For certainty, consult Lake Forest’s City Codes & Ordinances (linked below) and the Community Development Department.

How to Start a Short-Term Rental Business in Lake Forest

Because no Lake Forest–specific STR regime was identified, investors should assume compliance with state-level rules and general municipal business and safety requirements.

• Confirm property eligibility: Under Illinois HB 2919, STRs are defined as residential units (e.g., single-family homes or dwelling units in multi-unit structures) rented for fewer than 30 consecutive days. The definition excludes non-residential units, bed and breakfast establishments, and transient lodgings not classified as residential for property tax purposes.

• Confirm zoning and life safety: Even without STR-specific rules, properties must meet standard zoning, building, and life-safety codes (e.g., smoke and carbon monoxide detectors, fire extinguishers, safe egress, occupancy limits, and health standards). Lake Forest’s Community Development Department administers building permits and codes; use the city’s building permits portal for inspections and code questions.

• Register for taxes: Under Illinois SB 2564 (Short Term Rental Occupation Tax Act), hosts or platforms must collect and remit the Hotel Operators’ Occupation Tax (6% of 94% of gross receipts) and any additional local taxes that apply. Registration is through the Illinois Department of Revenue. If you list via platforms like Airbnb or Vrbo, those intermediaries generally handle collection and remittance of state-level taxes for you.

• Insurance and liability: Although the city materials do not specify minimum coverage, prudent hosts maintain general liability insurance and appropriate property coverage. Adjacent municipalities (e.g., Tinley Park) have required $1 million general liability; adopt similar coverage for risk mitigation.

• Ongoing compliance: Monitor the city’s municipal code for future STR ordinances and maintain documentation proving compliance with state tax obligations, safety standards, and local building codes.

For state-level guidance and starting steps (registration, licensing where applicable, safety, and inspections), see O’Flaherty Law’s summary and Summer’s state guide (linked below).

Required Documents, Permits, Licenses, and Guidelines

• Permits/licensing: No Lake Forest STR license was identified in the provided sources. Ensure standard building permits and code compliance for any renovations, life-safety equipment, or occupancy-related improvements. Use Lake Forest’s building permits portal for inspections and related processes.

• Business registration: Not required specifically for STRs by the provided materials. For tax purposes, register with the Illinois Department of Revenue (IDOR) or rely on platform remittance (if applicable).

• Tax registration: Under SB 2564, hosts or intermediaries must register with IDOR and collect/remit the Hotel Operators’ Occupation Tax (6% of 94% of gross receipts). Confirm whether any additional local hotel/lodging taxes apply; the city FAQ and municipal code links can be used to check local tax pages.

• Safety and insurance: Maintain functional smoke and carbon monoxide detectors, fire extinguishers, safe egress, and general liability insurance. While not codified in the Lake Forest materials, these are standard expectations in Illinois municipalities and adjacent examples.

• Records: Maintain proof of ownership or lease, host contact information, platform registration (if applicable), tax filings and remittance confirmations, and inspection or code compliance documentation.

Specific Regulations (City, County, State)

• City of Lake Forest: No city-specific short-term rental ordinance or licensing requirement was identified in the provided content. Investors should verify the municipal code for any updates and consult the Community Development Department for building and zoning compliance. See “Contact Information” below.

• Lake County: The provided materials do not include county-level STR regulations. As with the city, consult county code or the city’s municipal code for any references to county rules.

• State of Illinois (HB 2919 and SB 2564):

  • HB 2919 defines a short-term rental as a residential unit rented for fewer than 30 consecutive days, including units in single-family or multi-unit structures, and excludes non-residential uses, B&Bs, and non-residential transient accommodations.
  • SB 2564 imposes the Hotel Operators’ Occupation Tax on STRs: 5% of 94% of gross rental receipts plus an additional 1% of 94% of gross rental receipts, administered by IDOR. Platforms often collect and remit these taxes.

• Illustrative municipal rules (context only, not Lake Forest):

  • Chicago requires a vacation rental license, primary residence occupancy for most small buildings, maximum occupancy limits, and platform/host tax remittance. Non-owner-occupied STRs in small buildings are generally restricted.
  • Tinley Park requires a license, primary residence use, $1 million liability insurance, inspections, separation rules, and a license fee.
  • Naperville effectively prohibits STRs by ordinance.
  • Lake Bluff allows up to six resident-operated STRs under Section 10-4-5 of its municipal code, with a $250 annual registration fee, life-safety standards, and the note that there are no currently licensed STRs in the village.
  • Ottawa has a structured licensing process, zoning allowances, occupancy caps, and event restrictions.

Contact Information (Local Authority in Charge of STRs/Community Development)

• City of Lake Forest, Community Development Department
  • Phone: 847-810-3502
  • Municipal Services Center: 800 Field Drive, Lake Forest, IL
  • Building permits and inspections: Use Lake Forest’s building permits portal and inspection scheduling tools (linked below)
  • City Codes & Ordinances: Access the online code library (linked below)

For state tax matters:

• Illinois Department of Revenue (IDOR)
  • Registration and filing guidance for Hotel Operators’ Occupation Tax under SB 2564 (linked below)

Links to Source Pages (Provided)

• City of Lake Forest — Frequently Asked Questions (FAQ), Building Permits, City Codes & Ordinances, Building Permits Portal, Inspection Scheduling, Property Information Portal

  • www.cityoflakeforest.com/how_do_i_/find/frequently_asked_questions_(faq.php
  • www.cityoflakeforest.com/departments/community_development/building_permits.php
  • codelibrary.amlegal.com/codes/lakeforest/latest/overview
  • www.bsaonline.com/OnlinePayment/OnlinePaymentSearch?PaymentApplicationType=7&uid=2669
  • www.bsaonline.com/CD_InspectionRequestV2/RequestInspection?wizardGuid=53712f5c-cd23-4a12-b5ef-864c63e5b8c3&uid=2669
  • apps.gisconsortium.org/CommunityPortal/Default.aspx?PL=CLF&PG=12

• State of Illinois — HB 2919 and SB 2564

  • www.ilga.gov/legislation/101/HB/10100HB2919.htm
  • www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=112&GA=103&DocTypeId=SB&DocNum=2564&GAID=17&LegID=149769&SpecSess=&Session=

• Legal overview and state guides

  • www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws
  • www.gosummer.com/post/illinois-short-term-rental-law

• Illustrative municipal rules (context)

  • Lake Bluff STR registration page (Section 10-4-5)
    • www.lakebluff.org/departments-services/administration/965-short-term-rental-license-registry
  • Chicago Municipal Code reference (shared housing/vacation rentals)
    • www.chicago.gov/content/dam/city/depts/bacp/Small%20Business%20Center/sharedhousingordinanceamendments.pdf

Important Notes for Investors

• The provided materials do not reflect any current city-level restrictions or licensing requirements for Lake Forest. That can change; monitor the city’s code library and Community Development Department notices.
• Regardless of the lack of city STR rules, state law and general municipal building and safety requirements apply. Proactive compliance reduces enforcement risk and protects your investment.
• If you list via major platforms, confirm their current practices for tax collection and remittance under SB 2564 and any local lodging taxes.
• Always seek legal advice or consult the city before listing, especially if you plan multi-unit or non-owner-occupied operations or anticipate renovations that could affect occupancy or life safety.