Overview: STR Status in Shelbyville, IL

Short-term rentals are legal in Shelby County, Illinois, and by extension in the greater Shelbyville area, but they operate within a framework of county-level zoning regulations and potential municipal restrictions.

The State of Illinois maintains minimal overarching requirements for short-term rentals, placing primary regulatory authority with individual municipalities and counties. Shelby County has adopted comprehensive zoning regulations that govern land use throughout unincorporated areas, while municipalities like Shelbyville retain authority to establish their own local ordinances for properties within city limits.

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How to Start a Short-Term Rental Business in This Market

Market Assessment and Property Evaluation

Rural-Focused Market: The Shelby County area predominantly features rural and small-town characteristics, which creates unique opportunities for short-term rental operations. Unlike urban markets that concentrate on apartments and condos, this region primarily supports:

• Single-family homes as the dominant property type
• Cabins and larger homes favored for group gatherings and events
• Seasonal tourism driving demand during peak periods
• Business travelers comprising a significant guest segment

Location Strategy

Unincorporated vs. Municipal Areas: Properties located in unincorporated Shelby County fall under the county zoning ordinance, while properties within Shelbyville city limits are subject to municipal regulations. Each jurisdiction maintains distinct requirements:

• Unincorporated County Areas: Governed by Shelby County Zoning Ordinance with Improvement Location Permits and Certificate of Occupancy requirements
• Shelbyville City Limits: Likely subject to additional municipal ordinances (specific requirements not detailed in available sources)

Initial Compliance Steps

Essential Requirements:

1. Verify Zoning Compliance: Confirm your property location and applicable zoning district
2. Obtain Required Permits: Apply for Improvement Location Permits and Certificates of Occupancy where required
3. Business Registration: Register business operations as required by county and state law
4. Insurance Coverage: Secure appropriate liability and property insurance
5. Tax Registration: Register for state and local tax collection obligations

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Required Documents, Permits, Licenses, and Guidelines

Primary Permits and Documentation

Improvement Location Permit (Required for unincorporated areas):

• Authority: Zoning Administrator of Shelby County
• Requirements: Written application with site plan showing:
  • Legal or site description of real estate
  • Location and size of all buildings/structures
  • Width and length of entrances/exits
  • Adjacent and adjoining roads/highways
  • Planned improvement manner
• Validity: One (1) year from issuance date
• Fee: Amount determined by County Board (varies)
• Processing Time: Decision required within ten (10) days of complete application

Certificate of Occupancy:

• Authority: Zoning Administrator of Shelby County
• Requirements: Application made coincidentally with Improvement Location Permit
• Timing: Issued within ten (10) days after construction completion
• Compliance Verification: Property inspection confirming substantial conformity with approved site plan
• Temporary Certificate: Available for up to 90 days during construction (renewable once)

Special Exception Approval (if applicable):

• Authority: Zoning Board of Appeals
• Process: Public hearing with 30-day notice requirement
• Neighboring Property Notice: Certified mail notice to landowners within 250 feet

Zoning Compliance Documentation

Site Plan Requirements:

• Drawn to scale
• Legal description of property
• All building locations and dimensions
• Access points and traffic flow
• Adjacent roadway identification
• Planned improvements layout

Professional Engineer Certification (Industrial uses):

• Required for industrial uses subject to zoning regulations
• Certificate of Compliance from Illinois-registered professional engineer
• Certifies compliance with district performance standards

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Specific Regulations by Jurisdiction

Shelby County Zoning Ordinance (Unincorporated Areas)

Zoning Districts and STR Implications: The county zoning ordinance establishes several districts that may impact STR operations:

Agricultural Zones:

• Minimum ten (10) acre requirement for agricultural uses
• Residential structures permitted but subject to setback requirements
• Home occupation provisions may apply to ancillary STR operations

Residential Zones:

• Primary focus on single-family dwellings
• "Dwelling" defined as building used primarily as place of abode for one or more human beings
• Hotel/motel operations specifically distinguished from dwelling uses
• Accessory building provisions may impact STR outbuildings

Business/Commercial Zones:

• Accommodates commercial lodging operations
• Hotels and motels explicitly defined as "buildings in which lodging is provided and offered to the public for compensation and which is open to transient guests"
• Performance standards may apply to larger STR operations

Municipal Considerations (Shelbyville)

Limited Available Information: Specific municipal regulations for Shelbyville were not available in the provided sources. However, typical municipal STR regulations often include:

• Municipal licensing requirements
• Local occupancy limits
• Parking requirements
• Noise ordinances
• Local tax collection obligations
• Business registration requirements

State-Level Considerations

Minimal State Oversight: The provided content references state-level regulations but provides limited detail. Illinois municipalities retain broad authority to establish local STR regulations, resulting in a patchwork of local requirements across the state.

General Illinois Considerations:

• Municipal authority to regulate STRs
• State tax collection obligations
• Health and safety standards
• Building code compliance requirements

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Contact Information for Local Authority

Primary Contact: Shelby County Zoning Administration

Zoning Administrator:

• Authority: Appointed by Shelby County Board for four-year terms
• Jurisdiction: Unincorporated areas of Shelby County
• Location: Shelby County Courthouse, Courtroom B, Shelbyville, Illinois
• Responsibilities:
  • Enforcement of Zoning Regulations
  • Improvement Location Permit processing
  • Certificate of Occupancy issuance
  • Zone Map maintenance

Shelby County Board:

• Role: Legislative authority for zoning regulations
• Authority: Appointments, fee determination, variance approvals
• Meeting Location: Shelby County Courthouse, Courtroom B, Shelbyville, Illinois

Appeals and Variance Authority

Zoning Board of Appeals:

• Composition: Five (5) members plus two (2) alternates
• Appointment: Chairman of County Board with County Board approval
• Residency Requirement: Members must be residents of separate townships
• Chairmanship: Designated by County Board Chairman
• Compensation: Per diem basis plus mileage allowance
• Meetings: Shelby County Courthouse, Courtroom B, Shelbyville, Illinois (unless otherwise designated)

Alternate Members:

• Service: Two alternate members for four and five-year terms respectively
• Activation: Serve only in absence of regular members
• Priority: Determined by remaining term length

Court and Legal Review

Judicial Review:

• Authority: Illinois Compiled Statutes, 735 ILCS 5/3-101 et seq.
• Process: Final administrative decisions subject to judicial review
• Documentation: Transcribed testimony required for appeals

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Source Pages and Additional Resources

Official Government Sources

1. Shelby County Government:

   • Website: www.shelbycountyil.gov
   • Content: County ordinances, zoning maps, contact information
   • Authority: Official repository for county regulations

2. Shelby County Zoning Ordinance:

   • Document: Zoning Ordinance For Shelby County (PDF)
   • Official Custodian: Shelby County Zoning Administrator
   • Content: Complete zoning regulations and procedural requirements

Reference Links (from provided content)

• Illinois Short Term Rental Laws: Referenced in content but specific URL not provided
• Shelby County Ordinances: Available at www.shelbycountyil.gov

Key Zoning Ordinance Sections

Article I - Procedural Requirements:

• Short Title and Adoption provisions
• Zoning Administrator duties and authority
• Board of Appeals structure and procedures
• Improvement Location Permits and Certificates of Occupancy
• Amendment processes and variance procedures

Article II - Land Use Control Standards:

• Definitions (including Hotel/Motel vs. Dwelling distinctions)
• District establishment and boundaries
• Use regulations by district type
• Height, area, and setback requirements

Article III - Subdivision Regulations:

• Subdivision control procedures
• Plat filing requirements
• Design principles and improvement standards

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Important Considerations for Investors

Regulatory Limitations and Gaps

Information Gaps:

• Shelbyville Municipal Regulations: Specific city ordinances not available in provided content
• Current Fee Structure: Permit and license fees determined by County Board but specific amounts not listed
• Tax Requirements: State and local tax obligations referenced but not detailed
• Recent Amendments: Zoning ordinance last updated in 2005, may not reflect current STR market realities

Due Diligence Recommendations

Essential Research Steps:

1. Contact Shelby County Zoning Administrator for current permit requirements and fee schedules
2. Verify Municipal Status for properties within Shelbyville city limits
3. Research State Tax Obligations including sales tax and hotel occupancy tax requirements
4. Review Current Zoning Maps for specific property locations
5. Consult Local Planning for upcoming zoning changes or development initiatives

Risk Management

Compliance Risks:

• Unincorporated properties subject to county zoning enforcement
• Municipal properties may face additional local requirements
• State-level legislative changes could impact local regulations
• Building code compliance critical for occupancy permits

Market Risks:

• Rural market may have seasonal demand fluctuations
• Limited amenities compared to urban markets
• Competition from established hospitality providers
• Infrastructure limitations in rural areas

This guide provides foundational information for STR investment in the Shelbyville/Shelby County area. Given the complexity of zoning regulations and the gaps in available information, investors should conduct thorough local research and maintain regular communication with county and municipal authorities to ensure ongoing compliance with all applicable regulations.