Chicago Hasn't Rewritten Its Rental Law Since 1986. Two Versions Are Headed to a Vote, and One of Them Has a $10,000 Line in It.

The last time Chicago overhauled its Residential Landlord and Tenant Ordinance, the Bears had just won the Super Bowl and Harold Washington was mayor. Forty years later, City Council is finally rewriting it — twice, at the same time, in two competing bills that would land in very different places.

If you rent out a garden unit, own a two-flat, hold a condo you lease out, or you're a buyer with a small multifamily under contract right now, this is the most consequential thing happening in Chicago real estate this year. And almost nobody is explaining it in plain English.

So here it is in plain English.

What's actually on the table

Bill one: the Protecting Renters Ordinance (PRO). Mayor Brandon Johnson's version. Filed directly to the Committee on Housing and Real Estate on June 25, with a subject matter hearing on June 29. No vote taken. The mayor spent this past Sunday at Kathy Osterman Beach in Edgewater rallying organizers to push it over the line.

Bill two: the Fair and Accountable Illinois Rental Ordinance (FAIR). Introduced July 15 by Ald. Gilbert Villegas (36th) and backed by roughly 23 alders — largely the same bloc that killed the mayor's corporate tax push. It keeps some of PRO and strips out the rest.

Housing Committee chair Ald. Byron Sigcho-Lopez (25th) has said he expects a full Council vote sometime this fall. Translation: this gets decided while you're raking leaves.

What PRO would actually do

The mayor's office breaks it into five pieces:

1. RLTO modernization — standardizes fees and deposits, and consolidates existing tenant rights into a formal Tenant Bill of Rights.

2. A citywide rental registry — annual registration of rental units, creating a searchable database of who owns what.

3. A new Bureau of Rental Housing Services inside the Department of Housing to take complaints, investigate, and enforce.

4. An Eviction Counsel Program — makes the existing Right to Counsel pilot permanent.

5. Just cause for eviction and non-renewal — you'd need a legally valid reason to end a tenancy, and you may owe relocation assistance when a tenant has to move through no fault of their own.

Here are the numbers an owner should actually care about:

• Relocation payments up to 10 times the monthly rent, or $10,000 — whichever is greater — per tenant. That's the number. Read it twice.

• Security deposits capped at one month's rent, with move-in fees effectively off the table.

• Application fees capped at $20, unless the actual credit or background check costs more.

• Utility pass-throughs (RUBS) limited to the exact utility cost. No markup, no "administrative" padding.

• Registry fees of $20 per unit annually for buildings of one to four units, $40 for five to 49, and $60 for 50 or more.

• Out-of-town owners would need to designate someone local to receive city notices.

It isn't all one direction. The introduced version added a 14-day window to cure a violation before fines hit, dropped the earlier "unconscionable rent increase" language, and loosened the requirement that security deposits sit in interest-bearing accounts — a provision that has generated a mountain of litigation over the years.

The fight nobody's talking about: does it reach owner-occupied buildings?

Here's the part worth watching closely, because the two sides describe it differently.

The city's summary says the rental registry applies to non-owner-occupied units. The Chicago Association of REALTORS® reads the introduced ordinance as pulling small owner-occupied properties into the just cause framework — including owner-occupied two- to six-unit buildings — and says relocation assistance could be owed even when the reason for the move-out is owner move-in, family occupancy, or a gut rehab.

Under today's RLTO, owner-occupied buildings with six or fewer units are largely exempt. That exemption is the entire reason the Chicago two-flat works as a starter-investment: buy the building, live in one unit, rent the other, let the tenant pay down your note.

If the final language reaches owner-occupied small buildings, the math on that strategy changes. Not fatally — but it changes. You'd be buying a building where recovering your own unit for your own family could come with a check attached.

Nobody knows yet, because the language isn't final. That's the point. Watch that clause.

What FAIR does differently

The alder-backed version keeps the rental registry and the security deposit cap. It drops just cause, drops relocation fees, drops the Tenant Bill of Rights, drops the new Bureau, and drops city-funded right to counsel. It adds incentives for owners of vacant and out-of-code buildings to get them fixed and back in service, and it sorts landlords into size tiers with different obligations depending on how many units you own.

Fair warning on FAIR: no tenant organizations were consulted before it was introduced, and the coalition behind it got assistance from a business-backed political action committee. Both bills have money and lobbyists behind them. Neither one showed up out of pure civic virtue.

The honest counterpoint

I sell real estate, so you can guess which side of this my inbox lives on. But writing a one-sided post would make me useless to you, so here's the other half.

Renters are 54% of Chicago households — roughly 622,000 of them — and more than 40% are cost-burdened, meaning housing eats over 30% of their income. Those are not small numbers in a city this size.

The Right to Counsel program is the one piece with actual measured returns: run by the Law Center for Better Housing at about $4 million a year, with estimated fiscal benefits of $2.75 to $3.35 for every dollar spent, and roughly $13.6 million in cumulative benefits since 2022. You can dislike the rest of the package and still look at that line and see a program that pencils.

And the loudest claim on the owner side — that this will strangle housing supply — is a forecast, not a finding. The honest version is that just cause laws elsewhere have produced mixed results depending on how they're written, and that the specifics of the final Chicago language will matter more than the concept. Anyone telling you they know exactly how this plays out is selling something.

If you're buying a small multifamily right now

This is live, today, on deals in attorney review:

• Read the leases before you fall in love with the building. Term, renewal dates, and month-to-month status all matter more under a just cause regime than they did last year.

• Get a tenant estoppel. Written confirmation of rent, deposits, and any side agreements. If a deposit is undocumented and the rules tighten, that's your problem after closing, not the seller's.

• If your plan is to occupy a unit, negotiate delivery of that unit vacant at closing. Make it a contract term. Do not assume you can handle it after you own it.

• Price the registry and compliance costs into your operating numbers. On a three-flat that's small money. On a 20-unit it's real.

If you're selling a tenant-occupied building

Vacant possession is about to become a genuine value driver. If you have flexibility on timing and leases coming due, get with your broker and your attorney now about sequencing — a building delivered clean is a materially easier sale than one that comes with legal questions attached.

And if you've been on the fence about selling a small rental, understand what the calendar looks like: a fall Council vote, then implementation, then the inevitable year of everyone figuring out what the language actually means in practice. Buyers price uncertainty into offers. They always do.

The one thing you should do this month

Find out whether your building falls inside or outside the exemption line in whichever version advances, and call your alderman's office. Ordinances at this stage get changed by phone calls, not by op-eds.

I'm a real estate broker, not your attorney. For lease language, eviction procedure, or anything with a court date attached, talk to a real estate lawyer — and if you don't have one, I'm happy to point you to a few who handle Chicago rental work every day.

Thinking about selling before the rules change?

I've been a licensed Illinois broker for 25 years with over $100 million in closed sales, and I list homes and small multifamily across Chicago and the suburbs for 1.25% — roughly half the standard listing commission. That includes professional photography, 3D Matterport tours, and full online marketing.

I also include a Zero Commission Clause: find your own buyer, and you owe me nothing. And you can cancel anytime.

On a $500,000 building, the commission difference alone is around $6,250 back in your pocket — which is more than most owners will spend complying with either version of this ordinance.

Jason Rosenberg | The Rosenberg Group at Infiniti Properties 312.882.9797 www.jasonrosenbergrealestate.com

Free, no-obligation home value analysis — city or suburbs.

Sources

• City of Chicago, Office of the Mayor — "Mayor Brandon Johnson, Department of Housing Introduce The Protecting Renters Ordinance," June 29, 2026

• Chicago Association of REALTORS® — "Protecting Renters Ordinance (PRO) Issue Summary," updated July 22, 2026

• Block Club Chicago — "Mayor Wants To Create A Tenant Bill Of Rights, Other Protections For Renters," June 29, 2026

• Block Club Chicago — "Mayor Brandon Johnson Rallies Housing Organizers As City Council Vote On His Tenants' Rights Bill Looms," August 16, 2026

• WBEZ Chicago — "Chicago renters' rights are at stake in dueling City Hall proposals," July 27, 2026

• The Daily Line — "Protecting Renters Ordinance introduced to housing committee," June 30, 2026

• The Real Deal Chicago — "Chicago landlords spooked by expanded tenants' rights ordinance," July 2, 2026

• Metropolitan Tenants Organization — PRO summary

• Steven Vance / stevencanplan.com — analysis of PRO's rental registry and Eviction Counsel Program cost-benefit figures