Chicago Rent Control: Are There Changes Ahead?

Navigating the rental market in a bustling city like Chicago can be complex, especially when understanding rent control. 

Unlike many major metropolitan areas in the United States, Chicago does not have rent control policies. This absence allows landlords the discretion to adjust rents based on market conditions, a flexibility they highly value. 

However, this has also led to significant rent hikes in rapidly gentrifying neighborhoods such as Logan Square, Uptown, and Rogers Park, displacing long-term residents and families. Community activists, residents, and advocacy groups have been rallying for change in response to these rising costs. 

Despite these advocacy efforts, Illinois has no rent stabilization or rent control laws. This means that landlords across the state can set and increase rents with relatively few restrictions, provided they give proper notice. 

With renters making up approximately 55% of the Chicago housing market, understanding how rent control works is essential for both tenants and landlords. This guide will clarify the essential aspects of rent control, the circumstances under which landlords can raise rents in Chicago, and rent control’s impact on tenants and landlords. 

We’ll also explore tenant rights and protections as well as any potential changes to rent control in Chicago and Illinois.

Let’s dive in.

Understanding rent control in Chicago 

Chicago does not have rent control laws. 

This is because Illinois law, specifically the Rent Control Preemption Act of 1997, prohibits municipalities from enacting rent control measures. This statewide ban means that no city in Illinois, including Chicago, can implement rent control policies. 

While this may be a concern for tenants worried about rising rents, it’s important to consider the other tenant protection laws that are in place.

For example, Chicago’s Residential Landlord Tenant Ordinance (RLTO) offers various protections to renters, ensuring fair treatment and habitable living conditions. 

While the RLTO offers various protections to renters, it does not prevent landlords from raising rents at the end of a lease, whether it's annual or month-to-month. 

Tenant rights and protections in Chicago 

Even though Chicago doesn't have rent control, tenants have protection thanks to several key ordinances and laws designed to ensure fair treatment, habitable living conditions, and protections against unfair rent. 

For renters in the city of Chicago, the RLTO is an important piece of legislation that outlines the following:

• Tenant rights 
• Maintenance and repairs
• Rent increases
• Prohibition on retaliatory rent increases
• Eviction procedures

Can a landlord increase my rent during my lease?

Lease agreements often outline the conditions under which rent can be adjusted, including limitations on the frequency or amount of increases and the procedures for notifying tenants. 

For example, a lease might specify that rent can only be increased once per year or that any increase must be accompanied by a 30-day notice. 

Tenants should thoroughly review their lease documents to understand these terms and ensure that any proposed rent adjustments are in line with both the lease and local laws.

If your lease doesn't explicitly grant the landlord the right to increase rent during its term, the landlord cannot legally raise the rent until the lease expires. 

However, if the lease does include a clause allowing the landlord to raise rent during the term, the landlord may still face restrictions. For instance, the Chicago Fair Notice Ordinance, which was passed in July 2020, imposes limits on when and how landlords can increase rent, even if the lease terms appear to permit such changes.

Understanding your lease and the applicable local ordinances can help you safeguard your rights as a tenant. If a landlord attempts to raise your rent in a way that contradicts the lease terms or local regulations, you may have grounds to challenge the increase. 

Tenants should always be vigilant and stay informed about their rights and responsibilities, seeking legal advice if they encounter any issues with rent increases during their lease term.

Is a Chicago landlord required to provide notice for a rent increase?

In Chicago, landlords are required to provide advance notice before increasing rent, ensuring that tenants have adequate time to prepare for the change. 

Notice for rent increase

The specific notice period is governed by the Chicago Fair Notice Ordinance, which aims to protect tenants from unexpected rent hikes. 

Landlords must give at least 30 days' written notice before increasing the rent or terminating the lease for tenants who have lived in a rental unit for less than six months. This short notice period is intended to give new tenants a reasonable amount of time to adjust their housing plans if they cannot afford the increased rent. 

For those who have resided in their unit for six months to three years, the notice period extends to 60 days, providing more time for these tenants to make financial arrangements or find alternative housing if necessary.

Tenants who have lived in their rental unit for more than three years are entitled to the most extended notice period. Landlords must provide at least 120 days' notice before raising rent or terminating the lease. 

This longer period acknowledges the greater stability and community ties that long-term tenants often have and offers them ample time to make necessary arrangements, whether that involves budgeting for the higher rent, negotiating with the landlord, or seeking alternative housing.

Limit for rent increases

The Chicago Fair Notice Ordinance also includes specific limits on the amount of rental prices. 

Generally, landlords aren't allowed to exceed a specified percentage increase over a given period. For example, rent increases must not surpass 15% of the current rent, ensuring that tenants are not subjected to unreasonable or unaffordable hikes. 

However, there are exemptions to these limits, such as certain buildings with a specific number of units or properties under particular rental agreements. 

Both landlords and tenants must understand these exemptions and how they apply to their circumstances.

When are rent increases illegal?

​​Landlords sometimes attempt to increase rent as retaliation for tenants engaging in certain activities, such as reporting code violations or requesting repairs. However, landlords aren't permitted to increase rental prices or take other adverse actions against tenants in response to tenants exercising their legal rights. 

Legally, tenants are permitted to do the following:

• Complain about code violations to government agencies, elected representatives, or public officials
• Report issues to community organizations or the media
• Request necessary repairs
• Join a tenant union
• Testify in legal proceedings concerning the premises
• Exercise any legal rights or remedies 

If a landlord attempts to increase rent within 12 months after a tenant engages in one of these activities, that rent increase is presumed retaliatory unless the landlord can prove otherwise. 

Tenants who face retaliatory rent increases in Chicago can file a lawsuit against the landlord, seeking compensation of either two months' rent or twice the actual monetary harm suffered, along with attorney's fees and case costs.

Managing rent increases the right way

Property management platforms can be invaluable to landlords when managing rent increases. Solutions like Azibo allow you to centralize all your lease and renewal data, simplifying the identification of upcoming expirations and opportunities for rate adjustments.

When considering whether to raise the rent, landlords should stay informed about local laws, including rent control regulations, and keep up with market rates and rental affordability. Successful landlords strike a balance between meeting tenant needs and aligning rental income with market trends.

Azibo's integrated lease management, accounting, rent collection, and financial management capabilities enable you to efficiently analyze operational costs across your entire rental investment portfolio. This helps you determine appropriate rent increases that make financial sense while keeping your tenants happy.

Partnering with Azibo can enhance your property management approach by providing essential tools for informed decision-making and streamlined rent collection. 

Sign up for Azibo, for free, today.

Impact on renters and landlords 

Rent control can significantly affect both renters and landlords, shaping the landscape of Chicago's rental market. Understanding the financial and legal implications for each party is critical to comprehending the broader impacts of rent restriction policies in the city.

Financial pros and cons

Renters

Rent control can offer renters significant financial benefits by providing stability and predictability in housing costs. With limits on annual rent increases, tenants have protection from sudden and substantial rent hikes, which is particularly beneficial for low- and moderate-income renters who might otherwise face displacement. 

This stability allows long-term residents to remain in their communities, fostering a sense of continuity and security. Moreover, by keeping housing costs manageable, rent control can contribute to a higher quality of life for renters, enabling them to allocate their finances more effectively.

Landlords

Rent control can affect landlords' rental income and property values. 

Capping rent increases can result in slower growth in rental income, making it more challenging to cover rising costs such as maintenance, property taxes, and insurance. The perception that rent-controlled properties are less profitable can also affect property values, potentially making these properties less attractive to investors.

Despite these challenges, rent control can offer some benefits to landlords. Lower tenant turnover rates — due to rent stability — can reduce the costs associated with finding and preparing units for new tenants. 

Additionally, stable rents can lead to more predictable cash flows, simplifying landlords' financial planning. In some cases, governments may offer incentives or subsidies to landlords who maintain rent-controlled properties, which can help offset some of the financial impacts.

Legal pros and cons

Renters

Rent control provides specific rights and avenues for recourse for renters. 

If a landlord violates rent control regulations, tenants can take legal action to enforce their rights. This includes disputing unlawful rental prices, ensuring proper maintenance, and addressing any retaliatory actions by the landlord. 

Rent control regulations often include provisions that protect tenants from eviction without just cause, offering an additional layer of security and stability for renters.

Landlords

Rent control introduces specific legal responsibilities and compliance requirements for landlords. 

To avoid legal penalties, landlords must adhere to regulations regarding rent increases, lease renewals, and maintenance standards. They are also required to keep detailed records of rent charges and increases, ensuring transparency and accountability. 

Failure to comply with rental price regulations can result in fines and legal disputes, adding to the complexities and costs of property management.

Advocacy and policy changes 

In recent years, the conversation about rent control in Chicago has intensified, fueled by rising housing costs and increasing displacement of long-term residents. 

Lift the Ban

Advocacy groups like "Lift the Ban" have been at the forefront of efforts to introduce rent control measures in the city. These organizations have mobilized tenants, collected signatures for petitions, and organized public demonstrations to raise awareness about the need for rent restrictions. 

In 2018, Lift the Ban successfully added a non-binding referendum on the ballot in three of Chicago’s wards. The referendum asked voters whether they supported lifting the state’s rent control ban, and the response was overwhelmingly positive. 

This result highlighted strong public backing for rent restriction measures and increased pressure on state legislators to reconsider the Rent Control Preemption Act of 1997, which currently prevents municipalities in Illinois from implementing rent restriction policies.

Do Chicago residents want rent control? 

Although the city of Chicago requires landlords to give advance notice to tenants when rent is going to be increased, many residents say their landlords raise prices “effective immediately,” causing financial hardship.

Ben Avis is part of the North Spaulding Renters Association. The group assembled in April of 2020 after one of the tenants lost their job. Logan Square, where Avis lives, has seen a major rent increase.

“A lot of our neighbors have received a rent increase from [the landlord] of about 15 to 20%. That is a lot of money. . . . We have not received wage increases of that much, so it’s been really difficult for people to make ends meet there.”

Avis and members of the North Spaulding Renters Association were able to negotiate a free month’s rent for about a dozen tenants. The group has also been able to negotiate a rent increase cap of about 9%.

New proposed legislation in light of opponents favoring rent control

Opponents argue that rent control could deter investment in new housing and reduce the quality of rental properties. Strong lobbying by real estate and landlord associations has further impeded legislation for rent restriction in Chicago. 

However, as of March 25, 2021, a concerted effort is underway to lift the rent control ban and allow local municipalities to enact rent restriction regulations. House Bill 116, currently pending, seeks to achieve this goal.

If the ban on rent control is lifted, individual municipalities will have the authority to enact ordinances they deem appropriate. 

Historically, the Chicago area has been the most proactive in Illinois regarding tenants' rental rights, so Chicago will more than likely take action if this precedent continues.

Thoughts on the future of Chicago's rent control ban

Understanding the impact of potential rent control laws is important, as it could significantly affect both renters and landlords — financially and legally. 

For renters, rent control could provide much-needed stability and protection against sudden and steep rent hikes, making housing more affordable and predictable. 

On the other hand, landlords might face restrictions on their ability to increase rent, which could affect their rental income and commercial or residential property values. Additionally, landlords would need to navigate new compliance requirements and legal responsibilities.

Looking ahead, with advocacy groups actively working to eliminate rent control bans and pending legislation that may lift the ban, both landlords and tenants should stay informed. As public demand for rental price regulation grows stronger, it's essential for landlords and tenants to consider how these changes may affect them.  

Rent Control in Chicago FAQs

Does Chicago have rent control policies in place?

No, Chicago does not have rent control policies. The Rent Control Preemption Act of 1997 prohibits municipalities in Illinois from enacting rent restriction measures. This law means that no city within Illinois, including Chicago, can implement rental price policies, allowing landlords to set rents based on market demand.

How are tenants protected from rent increases in Chicago?

While Chicago does not have rent control, tenants are protected under the Chicago Residential Landlord Tenant Ordinance (RLTO). This ordinance requires landlords to provide advance notice before increasing rent and ensures fair treatment and habitable living conditions for tenants. Notice periods vary based on the length of tenancy, ranging from 30 days for tenants living in a unit for less than six months to 120 days for those residing for more than three years.

Will the Illinois rent control law change soon?  

Yes, there are ongoing efforts to introduce rent control in Chicago. Advocacy groups like "Lift the Ban" are pushing to repeal the Rent Control Preemption Act of 1997. House Bill 116, currently pending, seeks to lift the ban on rent control, which would allow local governments to implement their own rent control measures. It is likely that Chicago, historically proactive in tenants' rent rights, would take action to establish rent restriction policies if the ban is lifted.