Chicago Sues Airbnb Over Illegal Short-Term Rentals

On June 22, 2026, the City of Chicago filed a lawsuit against Airbnb, Inc., the nation’s dominant short-term rental platform, Airbnb Living, LLC, its affiliate, and Slumber Stay LLC, one of its most active hosts in Chicago, for repeatedly violating the City’s Shared Housing Ordinance and other consumer protection laws. The lawsuit also named Milan Rubenstein, Slumber Stay’s manager, as a defendant.

The complaint, which is the City’s most aggressive attempt yet to force short-term rental platforms to follow the rules, alleges that the defendants have profited from unlawful short-term rental activity by facilitating bookings for unregistered and unlicensed units, all while evading requirements under City laws designed to protect short-term renters, preserve residential quality of life, and maintain a supply of affordable housing.

This comes after almost a decade of tension between the City and Airbnb. In 2016, the City passed its Shared Housing Ordinance, regulating home-sharing to level the playing field with local hotels. Shortly after, Airbnb filed a lawsuit accusing the City of regulatory overreach. Since then, the City has been working to crack down on illegal short-term rentals.

In the lawsuit, the City claimed that Airbnb has roughly 5,000 to 6,000 short-term rental listings on its website, depending on the month. In Chicago, apartment units rented for less than a 31-day stretch constitute short-term rentals and require licensing and registration with the city. In the complaint, the City alleged that 698 units were rented in March 2026, totaling $1.3 million in booking value despite not being registered or licensed.

The City alleged it attempted to work with Airbnb to curb unlawful listings by providing a data portal showing all registered and licensed operators, but that Airbnb refused to use it. Because Airbnb does not publicly list addresses or identities until units are rented, the City must rely on “consumer complaints and substantial investigation to determine whether a given unit is unlawful.” The City can remove unregistered and unlicensed unit owners to prevent illicit booking, but the lawsuit alleged that these violators can create new profiles and re-list the same units. Airbnb also provides “incomplete” monthly reports showing units rented by ward, which are insufficient for the city to identify unlawful rentals, the complaint alleged.

Mayor Brandon Johnson says that “requiring short-term rental companies to follow the same rules as everyone else is critical to work of building a safer, more affordable Chicago.” The City is asking the court to fine Airbnb for violations and provide injunctive relief preventing them from renting or brokering unlawful short-term rental units in the future.

If you have questions about the City of Chicago’s lawsuit or its implications, contact the qualified attorneys at Rock Fusco & Connelly, LLC.