Overview: Are STRs allowed?

• Short-term rentals are permitted in Chicago, including the Woodlawn community area, subject to citywide rules. There is no separate, city-specific prohibition for Woodlawn. However, short-term leasing (including vacation rentals like Airbnb) is explicitly prohibited in Additional Dwelling Units (ADUs) citywide. Investors must therefore distinguish between standard residential units and ADUs and avoid any STR operation in an ADU (new or converted). State-level Illinois short-term rental registration requirements also apply.

How to start an STR business in Woodlawn (Chicago)

• Confirm zoning and unit eligibility
  • Ensure the unit is in a residential zoning district (e.g., RS, RM, RT). RS-1 zoning (single-family) is not eligible for ADUs and is generally owner-occupied single-family use. Determine zoning via the City of Chicago Zoning Map.
  • Confirm the unit type: a standard principal dwelling (single-family, condo, apartment) can operate as an STR subject to city regulations. Do not operate an STR in an ADU (coach house or conversion unit in attic/basement).
  • Note: ADUs are allowed in Woodlawn (South Zone), but any ADU cannot be used for short-term leases or vacation rentals.
• Obtain any required approvals and permits
  • If you intend to add an ADU (coach house or conversion), you must complete the ADU process:
    • Submit an ADU intake application to the Department of Housing (DOH), then proceed to a Department of Buildings (DOB) permit with plans by an Illinois-licensed architect or structural engineer. Some applications may require a zoning opinion letter from the Department of Planning and Development (DPD).
    • In the West, South, and Southeast zones (which include Woodlawn), owner-occupancy is required for buildings with 1–3 units to add a conversion unit or a coach house; only two ADU permits will be issued per block per year in these zones.
  • If your property contains multiple units and you are creating conversion ADUs, note affordability requirements: for two or more conversion units, at least half must be legally restricted affordable at 60% of Area Median Income (AMI) for 30 years after construction. This restriction runs with the land and is enforced via recorded affordability covenants.
  • Do not plan to use the ADU for STR operations; ADUs may not be used for short-term leases or vacation rentals.
• Comply with short-term rental rules
  • Register or license the property as a short-term rental per Chicago’s citywide STR rules, pay applicable taxes (hotel/motel and occupancy), and comply with occupancy, safety, and host responsibility requirements. (Note: licensing and taxation specifics are municipal functions; verify current city code and procedures with the City of Chicago.)
• Operations and best practices
  • Establish reliable housekeeping, guest screening, and compliance monitoring.
  • Maintain clear rental terms and neighborhood standards to reduce complaints and enforcement risk.
  • Keep accurate records of guest stays, receipts, and remittances for city and state tax obligations.

Required documents, permits, licenses, and guidelines

• For adding ADUs (not for STR use)
  • ADU intake application (DOH).
  • Building permit application with plans prepared by an Illinois-licensed architect or structural engineer.
  • Zoning opinion letter from DPD if required to confirm the quantity of legally established units.
  • Compliance with affordability covenants for multi-unit conversion ADUs (60% AMI for 30 years, recorded against the property).
  • Owner-occupancy evidence (in West/South/Southeast zones, for 1–3 unit buildings adding ADUs).
  • Documentation showing fewer than two ADU permits issued per block per year in these zones.
• For STR operation (standard units, not ADUs)
  • STR registration or license per citywide requirements (if applicable).
  • Proof of property ownership or legal control of the premises.
  • Evidence of compliance with local safety, building, fire, and zoning codes.
  • Payment of Chicago hotel/motel taxes and occupancy taxes, and compliance with state registration and tax obligations.

Specific regulations affecting STRs in Woodlawn and Chicago

• City and neighborhood-specific
  • Woodlawn Housing Preservation Ordinance (city program policy): a citywide affordable housing preservation framework with financing and development programs tailored to Woodlawn. It does not directly regulate STRs; it sets affordability and community investment requirements for certain city-involved development projects. It reinforces anti-displacement priorities but does not impose an STR ban in Woodlawn.
  • ADU Ordinance: ADUs are allowed in Woodlawn (South Zone). Short-term leases or vacation rentals are expressly prohibited in ADUs. Owner-occupancy is required in West/South/Southeast zones for 1–3 unit buildings adding ADUs. ADU conversion units are subject to affordability covenants at 60% AMI for 30 years; new ADUs cannot be created as STRs.
• Citywide STR regulations
  • Standard short-term rental operation is governed by Chicago’s municipal code at the city level. Investors must adhere to registration, taxes, occupancy limits, and compliance requirements as set by the City of Chicago. ADUs are categorically excluded from STR use.
• County (Cook County) and state (Illinois)
  • Illinois Short-Term Rental law (IL 50 ILCS 820 et seq.): statewide registration program administered by the Illinois Department of Financial and Professional Regulation (IDFPR). Operators must obtain a state registration number, display it on listings, maintain insurance, and comply with IDOR tax obligations (hotel/motel tax and income tax). Local municipalities may impose additional rules; Airbnb/VRBO require collecting and remitting state hotel tax on bookings.

Contact information (local authority in charge of STRs)

• City of Chicago short-term rentals (citywide administration): Department of Housing (DOH)
  • General DOH phone: 312-744-5870
  • DOH website: www.chicago.gov/city/en/depts/doh.html
• ADU-specific contacts:
  • ADU questions (including eligibility and process): adu@cityofchicago.org
  • ADU application portal: webapps4.chicago.gov/eforms/aduapplication
• Illinois Short-Term Rental registration (state-level):
  • Illinois Department of Financial and Professional Regulation (IDFPR) – registration, enforcement
  • Illinois Department of Revenue (IDOR) – tax collection, compliance

Links to source pages

• Chicago ADU Ordinance overview (includes South Zone coverage, eligibility, and STR prohibition in ADUs): www.chicago.gov/city/en/sites/additional-dwelling-units-ordinance/home.html
• City of Chicago Zoning Map (zoning eligibility and zoning confirmation): gisapps.chicago.gov/ZoningMapWeb/terms.html
• DOH Guide to Building Permits (permitting workflow, plan requirements, and contacts): www.chicago.gov/city/en/sites/guide-to-building-permits/home.html
• Chicago DOH income and rent limit charts (affordability compliance reference): www.chicago.gov/city/en/depts/doh.html
• Woodlawn Housing Preservation Ordinance (local development and affordability policy context): www.chicago.gov/content/dam/city/depts/doh/general/woodlawn/Woodlawn%20Housing%20Preservation%20Ordinance.pdf

Practical takeaways for investors

• Woodlawn allows STRs in standard residential units; avoid ADU-based operations altogether.
• If you plan property expansions, note ADU eligibility and affordability covenants that may affect conversion strategy.
• Confirm current Chicago STR registration requirements and tax remittance procedures prior to listing.
• For statewide operations, secure Illinois STR registration and meet IDOR tax obligations.