Vendor Portal
Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
I try to stay on top of every proposed change to Chicago's rental laws. Not because I love reading ordinances late at night. I do it because we manage for more than 500 investors, and it is my job to spot what is coming before it lands on them. The newest proposal out of City Hall is a big one, and our owners are already asking about it.
Mayor Brandon Johnson is pushing a plan called the Protecting Renters Ordinance. It would be the biggest update to Chicago's rental rules in 40 years. The goal is to help renters. My read is that parts of it will do the opposite. Let me walk you through what is actually in it, then show you where it could backfire on the very people it is built to protect.
Key Takeaways
- The Protecting Renters Ordinance is a proposal from Mayor Johnson. It has not passed. It was set to be introduced to the City Council housing committee in June 2026.
- It updates the 40 year old Residential Landlord and Tenant Ordinance, also called the RLTO.
- The main pieces are a citywide rental registry, a ban on junk fees, a Tenant Bill of Rights, a rule on pricing software, a just cause for eviction rule, and a new city office to run it all.
- The registry would charge larger building owners $20 to $60 per unit each year. The city thinks it could raise about $20 million a year.
- Yes, single family home investors would be included. If you rent out a house you do not live in, you would have to register and pay. The only fee exemption is for owner occupied buildings with two to six units and for nonprofit affordable housing.
- A registry that is only a fee is something I can live with. A registry that drags inspections along with it is a different story.
- The junk fee ban raises a real question, because Illinois is already writing its own fee law. How the two stack up is not clear yet.
- The just cause for eviction rule is, in my view, a side door to rent control, which the state of Illinois banned years ago.
- My bottom line. Many of these rules push rent up, shrink the number of small landlords, and make it harder for renters to get approved. That hurts renters.
Why The City Says It Needs This
First, let me be fair. The city has real reasons for trying.
The mayor's office shared some numbers. About 622,000 families rent in Chicago. That is around 54 percent of all households. Almost half of them spend more than 30 percent of their income on housing. Rents went up about 10 percent in one year. And the city says housing cost is now the top worry for voters.
The city also says it has no full list of who owns the rentals here. There are more than 500,000 rental units and no clean record of who owns them or how many sit in each building. More owners now hide behind LLCs, which makes it hard to track down a bad landlord. So the city wants a registry to fix that.
Those are honest problems. I am not going to pretend they are made up. The question is whether this plan solves them or makes them worse.
The Breakout Of The Proposed Changes
Here is what is in the draft, in plain terms.
1. A Citywide Rental Registry
Every rental owner would have to register their units with the city and pay a yearly fee. The fee is based on building size and whether the owner lives there. Owner occupied buildings with two to six units would be exempt from the fee. So would nonprofit affordable housing. Larger owners would pay $20 to $60 per unit per year. The city expects the registry to bring in around $20 million a year.
A lot of you own single family rentals, so let me be clear on this. Single family home investors would be included. The exemption is for owner occupied small buildings, meaning the owner lives in the building. A house you rent out and do not live in does not qualify. So if you own a single family rental in the city, you would have to register it and pay the fee. Same goes for a rented condo unit you do not live in. The only folks who skip the fee are owner occupants of two to six unit buildings and nonprofit affordable housing. This is based on the current draft, so the exact thresholds could shift, but as written the single family investor is in.
My take on this one. Honestly, a registry by itself is not the end of the world. It is a reasonable tax. It costs us very little to manage, and if it helps the city find the true bad actors, fine. But there is one line I am watching closely. If the city bolts a mandatory inspection program onto the registry, the math changes fast. Inspections mean access visits, repair lists, reinspection fees, and a lot of staff time. That cost is real, and it does not stay with the owner. It moves to the renter. So a clean registry, no problem. A registry plus inspections, big problem. Watch that detail.
2. A New Bureau Of Rental Housing Services
The fee money would pay for a brand new city office. It would run the registry, hand out emergency rent and eviction help, give landlords compliance guidance, and enforce the tenant rules. Think of it as one front door for rental housing in the city.
3. A Ban On Junk Fees
The plan bans extra fees stacked on top of rent. That means things like application fees and processing fees. Any charge that is left would have to match a real, documented cost. No padding.
Here is my open question on this one. Illinois is already writing its own fee law. House Bill 3564 caps application fees and bans a list of charges across the whole state. We break that law down on our website. So you have the city trying to ban fees while the state is already setting its own fee rules. How do those two stack on top of each other? The state law is built as a baseline. A city rule that goes further could work, or it could spark a fight over what is allowed. To make it messier, the state start date keeps moving. It was set for the middle of 2026 and may slide into 2027. Nobody has a clean answer yet. That is a lot of gray area to hand to owners who just want to follow the rules.
4. A Tenant Bill Of Rights
This part spells out renter rights in one place. The draft frames it as a clear list so renters know what they are owed.
5. A Rule On Pricing Software
Landlords would have to tell renters if they use pricing software, also called algorithmic pricing. These are tools that suggest rent prices based on market data. The city wants that out in the open.
6. Just Cause For Eviction
This is the big one. A landlord would need a valid reason to evict a tenant or to not renew a lease. If a tenant is pushed out through no fault of their own, like for a gut rehab, a condo conversion, or a teardown, the landlord would owe that tenant relocation money. The city thinks this would touch about 10,000 families a year.
Now here is the part that does not get said out loud. Illinois banned rent control years ago. Cities here are not allowed to cap how much rent you can charge. So just cause for eviction is the side door. Follow the logic with me. A unit only resets to today's market rent when one tenant leaves and a new one moves in. If you cannot choose to not renew a lease, and you owe money to move a tenant out, you lose your cleanest way to reset that rent. Tie an owner's hands on move outs and you freeze a lot of rents in place. That looks a whole lot like rent control. The state says no rent control. This gets close to the same result without ever using those two words. I think people should call it what it is.
7. Eviction Counsel
The plan also locks in the existing right to counsel program, which gives some tenants a lawyer during eviction. This piece would need its own city budget money starting in 2028. It is not paid for by the registry.
Now The Part Nobody At The Podium Talks About
Here is where I put on my operator hat. I run buildings every day. I have seen what happens when good intentions meet real life. A lot of this plan will land on renters, not just owners. Here is how.
Banned fees do not vanish, they move into rent
When you ban application and processing fees, that money does not disappear. Owners roll it into the base rent. So a renter who used to pay a one time fee now pays a little more every single month, often for years. A fee you pay once can be cheaper than rent that is bumped up forever. That is the trade most renters never see coming.
Screening gets harder, not easier
When it costs more to remove a bad tenant, and you might owe relocation money, you get very picky about who you let in. That is human nature. Owners will tighten credit rules, ask for bigger deposits where allowed, and lean toward the safest applicant. The renter who is rebuilding credit or starting over is the one who gets passed over. The rule meant to protect renters can quietly lock some of them out of the front door.
The rent control side door slows new supply
I said it above and it matters here too. When just cause rules act like rent control, owners build and rehab less. Why pour money into more units if the city is going to control what you can do with them? One Chicago owner with 600 units said the real issue is supply. He is right. Chicago needs more units, not more reasons to sit on the sidelines. Less supply means higher rent. Again, the renter pays.
The small landlord exit
This is the one that worries me most. The mom and pop owner with one two flat is the backbone of affordable housing in our neighborhoods. Pile on a registry, new fees, relocation payments, and a thick rulebook, and some of them just sell. Who buys? Bigger investors and corporations with legal teams. That could thin out the very neighborhood owners the city says it wants to protect, and hand the market to the big players. That is the opposite of the goal.
The condo conversion loophole
The just cause rule has a carve out for condo conversion and teardown. If renewing a working family lease gets risky, some owners will choose to convert to condos or redevelop instead. That removes rental units from the market. Tenants get a relocation check one time, but the unit they could afford is gone for good.
I want to be clear. I am not saying renters need zero protection. Bad actors exist, and a registry that catches them is not a crazy idea. But this plan leans heavy. And the heavier it leans, the more the cost slides downhill onto renters and small owners. The folks cheering loudest may not love the bill that shows up later.
Where This Stands Right Now
As of now this is still a proposal. It has not passed. The mayor planned to bring it to the housing committee in June 2026. Landlord groups are pushing back hard, and the Chicagoland Apartment Association has asked the council to reject it and focus on building more housing instead. Expect a real fight at City Hall. None of this is law yet, so do not change your leases over it today. But do get ready.
If you own rentals in the city, this is the moment to get your house in order. Know your true costs. Clean up your ownership records. Make sure your screening is fair and consistent and written down. If a registry comes, the owners who already run a tight ship will breathe easy. The ones who wing it will scramble.
If you want a refresher on how city rental licensing and registration already works, our team put together a simple guide. You can read our City Rental License Landlord FAQ.
FAQ
Has the Protecting Renters Ordinance passed? No. It is a proposal from Mayor Johnson. It was set to go to the City Council housing committee in June 2026. It is not law.
Who would have to pay the registry fee? Larger building owners would pay $20 to $60 per unit each year. Owner occupied buildings with two to six units and nonprofit affordable housing would be exempt from the fee.
Is the rental registry a bad thing? On its own, not really. A registry that is just a yearly fee is reasonable and cheap to manage. The thing to watch is whether the city attaches mandatory inspections to it. That is where the cost grows, and that cost tends to land on renters.
How does the junk fee ban fit with state law? That is the open question. Illinois is already writing its own fee law, House Bill 3564, which caps application fees and bans certain charges statewide. The start date has bounced between the middle of 2026 and 2027. How a separate Chicago ban stacks on top of the state rules is not settled yet. We cover the state law on our website.
What is just cause for eviction, and why call it a rent control work around? Just cause means a landlord needs a valid reason to evict or to not renew a lease, and may owe relocation money for a no fault move out. Illinois banned rent control years ago. But if owners cannot freely reset rent at turnover, the rule limits rent growth in practice. That is why I see it as a side door to rent control without the name.
Are single family home investors included? Yes. If you rent out a single family home or a condo unit you do not live in, you would have to register and pay the fee. The only fee exemption is for owner occupied buildings with two to six units and for nonprofit affordable housing. A rented house you do not live in does not qualify, so single family investors are in as the draft is written.
Why do you think this could hurt renters? Because costs move. Banned fees tend to show up as higher rent. Tougher eviction rules make owners pickier about who they approve. And added cost pushes small landlords to sell or convert, which shrinks affordable options.
What should landlords do now? Nothing drastic yet, since it is not law. But clean up your records, know your real costs, and make your screening fair and consistent. Being ready beats being surprised.
Don't Go At This Alone!
Rules in Chicago change fast, and this one could change a lot. At GC Realty and Development we manage around 1,500 units for more than 500 investors, and staying ahead of stuff like this is our full time job. We know the paperwork, the timelines, and the people who enforce it. When a new ordinance lands, our owners do not lose sleep, because we handle it.
Mark's Mission: My personal mission is to help property owners across Chicagoland keep more of their time, more of their money, and less of the risk that comes with running rentals in one of the most regulated markets in the country.
If you want a property manager that stays up on what is going on and watches out for your interest, let's jump on a call.
%20(3)%20(1)_3.png)
_1.png)
