Overview: Are short-term rentals allowed in Waukegan?

• Yes. As of the 2025 legislative process, short-term rentals are allowed in Waukegan subject to city licensing and tax obligations. The City Council scheduled a vote on Jan 21, 2025 on a streamlined ordinance that requires registration, licensing, and hotel/motel tax compliance. Final adoption and any subsequent amendments may alter specifics, so confirm the current status with the City before investing. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• The city’s discussion centered on balancing local housing concerns and the economic impact of visitors, including those arriving for Naval Station Great Lakes graduations (roughly $45M per year into the area). www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Definitions used by the city during deliberations: rentals shorter than 30 days were considered short-term; renting beyond 30 days generally confers tenant rights under Illinois law, which the city noted when shaping the maximum stay and licensing framework. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Enforcement and penalties: violations can result in a $5,000 fine. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/

How to start a short-term rental business in Waukegan

1. Confirm current ordinance status and requirements

• The Community Development Committee recommended a simplified ordinance for a Jan 21, 2025 council vote. If adopted, the core requirements include: registration, licensing, and hotel/motel tax collection via the platform (not directly from the owner). www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Certain original proposals (e.g., minimum distance between STRs, mandatory security cameras, off-street parking) were removed from the committee’s final recommendation. Always verify whether any were reinstated during final adoption. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Treat the “two-night minimum stay” as proposed/pending until you confirm the adopted ordinance text. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/

2. Secure the property and compliance fundamentals

• Zoning: STRs are residential uses. As proposed, there is no cap on licenses and no buffer-distance requirement between STRs (though both were part of earlier drafts and were removed from the committee’s final recommendation). www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Safety and occupancy: Comply with the city’s life-safety and maximum occupancy rules. City code references apply; confirm any posted occupancy limits inside each unit. (The city discussed posting license and occupancy rules on the door in earlier drafts.) www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Insurance: Maintain appropriate property and liability coverage for a rental operation. State-level norms for Illinois STRs include carrying general liability insurance; if adopted, Waukegan’s ordinance should reference such requirements or defer to state standards. www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws

3. Apply for a Waukegan STR license

• Fees: $300 annual license plus a $25 application fee; licenses run Jan 1–Dec 31 each year. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• License term: Annual, with renewals every January 1. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Submit: Contact the City of Waukegan Community Development Department for the current application and process (see Contact Information below). www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/

4. Set up tax remittance and platform compliance

• Hotel/motel tax: The committee’s recommendation called for the tax to be collected via the online platform rather than directly from property owners. If adopted, ensure your listing platform remits Waukegan’s hotel tax. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• State-level platform obligations: Illinois law treats platforms as intermediaries and requires them to register and collect/remit hotel taxes. Confirm which taxes apply to your listings and ensure the platform is registered to collect and remit them. www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws

5. Operations and guest rules

• Minimum stay: The committee endorsed a two-night minimum as part of the simplification. Treat this as a pending requirement until you confirm the adopted ordinance. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Maximum stay: Stay under 30 days to avoid creating a tenancy under Illinois law. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Parking and cameras: Not required under the committee’s final recommendation; original drafts had included both but they were removed. Confirm against the adopted text. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Signage and posting: Earlier drafts required posting license and occupancy rules on the door; confirm if that remains in the adopted ordinance. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/

6. Maintain compliance and renew

• Renew your license annually and keep your platform tax setup current.
• Monitor for ordinance amendments, enforcement updates, or changes to state tax requirements.

Required documents, permits, licenses, and guidelines

• Waukegan STR license application: owner contact details; local contact (if applicable); property information; attestation that information is accurate. www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws
• Fees: $25 application fee + $300 annual license fee (Jan 1–Dec 31). www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Insurance: General liability coverage appropriate for a rental operation (state-level expectation). www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws
• Tax compliance: Platform-collected hotel/motel tax (per the committee recommendation); verify state intermediary registration and tax obligations. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/ and www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws
• Life-safety and occupancy: Compliance with city codes; posting of occupancy limits if required by adopted ordinance. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/

Specific regulations (Waukegan) — what to expect or confirm

• Allowed: Yes, subject to licensing, registration, and hotel/motel tax.
• Registration and licensing: Required. Annual license runs Jan 1–Dec 31. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Fees: $300/year license + $25 application. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Tax: Hotel/motel tax to be collected by the platform under the committee’s recommendation; confirm current practice with the city. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Stays: Minimum stay proposed at 2 nights; maximum stay under 30 days to avoid tenancy rights. Confirm adopted language. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/ and www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Distance, cameras, parking: Removed from the committee’s final recommendation; verify against the adopted ordinance text. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Life-safety/occupancy: Follow city codes; earlier drafts called for posting occupancy and license information on the door. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Caps and limits: No license cap under the committee’s recommendation; earlier drafts had considered caps and later removed them. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Enforcement: Violations can result in a $5,000 fine. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/

Regulations at the county and state level (Illinois)

• Municipal primacy: Waukegan issues the local license and sets STR rules (registration, tax, operational requirements). www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• County (Lake County): No county-specific STR license or tax found in the provided sources; the city leads regulation and taxation.
• State (Illinois):
  • Platform intermediary duties: Online platforms that advertise and facilitate STRs must register, collect, and remit hotel taxes. www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws
  • 30-day tenancy rule: Rents lasting more than 30 days generally grant tenants statutory rights; keep STR stays under 30 days to avoid creating a tenancy. www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
  • Insurance: Maintain general liability coverage appropriate for operating a rental. www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws
  • Municipal variation: Other Illinois municipalities (e.g., Chicago, Tinley Park) have distinct licensing, fees, and caps. Waukegan’s requirements are distinct and more streamlined under the committee’s recommendation. www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws

Contact information (Waukegan)

• City of Waukegan — Community Development Department (Planning and Economic Development)
  • Phone: (847) 599-2500
  • Email: Not specified in sources; contact the Community Development Department for the STR license application and current ordinance status.
  • Website: www.waukeganil.gov
  • Hearing/meeting locations referenced: Waukegan City Hall. www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/

Source links (important)

• Waukegan considering short-term rental regulations (Nov 8, 2024): www.chicagotribune.com/2024/11/08/waukegan-considering-short-term-rental-regulations/
• Waukegan council to vote on short-term rental regulations (Jan 7, 2025): www.chicagotribune.com/2025/01/07/waukegan-council-to-vote-on-short-term-rental-regulations-do-those-three-things-and-lets-see-what-we-have/
• Illinois Short-Term Rental Laws (overview): www.oflaherty-law.com/learn-about-law/illinois-short-term-rental-laws

Notes on uncertainty and investor diligence