Several important housing policy developments are moving forward in Chicago and Springfield that could significantly affect REALTORS®, housing providers and renters. From the Johnson Administration’s proposed Protecting Renter’s Ordinance to new statewide rental housing fee disclosure requirements, these measures raise important questions about affordability, compliance, property rights and the future of multifamily housing. Here’s what you need to know and what we’re watching.
Chicago’s Protecting Renter’s Ordinance (PRO) Explained
Status: Not yet formally introduced, expecting direct introduction to the city’s Housing & Real Estate Committee this month.
The Johnson Administration is proposing a sweeping overhaul of the Residential Landlord-Tenant Ordinance (RLTO) called the Protecting Renter’s Ordinance (PRO). The ordinance is expected to be placed directly on the Housing & Real Estate Committee agenda, possibly on June 10th, bypassing the standard full Council introduction. This is considered an unusual move procedurally that has already drawn pushback from alderpersons. REALTORS® have been proactively educating Alders and engaging Chicago media outlets on this ordinance, which would negatively impact Chicago multifamily housing.
For more information, check out these news articles:
- Mayor Brandon Johnson pushing sweeping changes to renter laws and landlords bristle from the Chicago Tribune
- Mayor Johnson to introduce measure to protect Chicago renters from WBEZ
Key provisions of concern include:
- Informal “Rent Control” Framework: At the time of lease renewal, if a rent increase is deemed “unconscionable” by a tenant, they would have the right to reject it and demand relocation payments equaling four months’ rent or more.
- Security Deposit Caps & Move-In Fee Restrictions: Security deposits would be capped at one month’s rent, and move-in fees are effectively prohibited. Many landlords began charging move-in fees to avoid Chicago’s highly punitive security deposit litigation environment. Many tenants see move-in fees as preferable to paying larger security deposit sums up-front.
- Sweeping Tenant Bill of Rights: Broad new tenant rights covering tenant organizing, rent withholding, lease termination, retaliation claims and quiet enjoyment while significantly expanding damages, penalties, attorneys’ fees and injunctive relief against housing providers.
- Citywide “Just Cause Eviction”: Landlords must satisfy narrow statutory grounds before recovering possession and may owe relocation assistance even for owner move-in, family occupancy or major rehabilitation. Applies even to owner-occupied 2–6 unit buildings.
- Encourages “Cash-for-Keys” Negotiations: Rather than navigate the formal eviction process when trying to recover their property, Just Cause requirements create incentives for landlords to negotiate private buyout agreements with tenants. Similar policies in cities like San Francisco, where buyout agreements sometimes reached five figures, have made cash-for-keys arrangements commonplace, further driving up costs for housing providers.
- Significant Financial Exposure: Landlords may face four to five months of Fair Market Rent in mandatory relocation payments and penalties, plus attorneys’ fees and litigation costs.
The Association’s Position & Strategy
As drafted, the PRO raises serious concerns about unintended consequences that could reduce housing availability, discourage neighborhood investment and increase costs for renters across Chicago. We are actively engaged with alderpersons and are prepared to issue a Call for Action if a vote takes place. We believe sweeping changes to Chicago housing law should include a transparent public process with meaningful stakeholder review.
What to Watch
The ordinance is expected to be placed directly on the Housing & Real Estate Committee agenda, possibly on June 10th, bypassing the standard full Council introduction. This is considered an unusual move procedurally that has already drawn pushback from alderpersons. Its final language remains subject to change. Our Government Affairs team is heavily engaged, proactively educating Alders and engaging Chicago media outlets on this ordinance, which would negatively impact Chicago multifamily housing. Be on the lookout for updates and a member Call For Action on this ordinance.
We want your input! Contact our Advocacy Team at advocacy@chicagorealtor.com to share your insights.
Illinois House Bill 3564 – Rental Housing, Application and “Junk Fees” Effective January 1, 2027
Status: Awaiting Governor’s signature. Effective January 1, 2027.
House Bill 3564 regulates how housing providers charge and disclose fees to prospective and current tenants. Originally, this was a much more restrictive bill, which included a cap on security deposits and a full prohibition of both move-in fees and application fees. However, REALTORS® worked with bill sponsors Sen. Mike Simmons and Rep. Nabeela Syed to substantially amend the legislation. A trailer bill, HB 5234, passed both chambers this past weekend, moving the effective date from July 1, 2026, to January 1, 2027.
Click here to view a shareable, printable overview of House Bill 3564 from Illinois REALTORS®.
What the Final Bill Requires
Disclosure of Up-Front Fees:
- All non-optional fees must be disclosed on the first page of the lease AND in any listing or advertisement that includes the rent amount, in a clear and conspicuous manner (which may be an accessible weblink).
- Disclosure must include whether utilities are included in the rental price.
- If a fee is not explicitly listed on the first page of the lease, the tenant is not liable for it.
Application Fee Limits:
- Application fees may be charged, but must reflect the actual cost of tenant screening (credit checks, background checks, screening reports).
- Fees over $50 are only permitted if the actual third-party screening cost exceeds $50, the landlord pays the cost upfront and bills the tenant within 14 days with a receipt.
- Prohibited: duplicate screening fees, fees exceeding actual cost, administrative add-ons and any fee unrelated to screening.
Ban on Other Fees During Tenancy:
Housing providers may NOT charge tenants for:
- After-hours maintenance request fees
- Fees for contacting property management (calls, emails, maintenance requests)
- Maintenance hotline, service call, or travel charges for repairs
- Fees for routine maintenance and upkeep
- Pest control charges if the tenant did not cause the issue
- Fees for an eviction notice or filing prior to an eviction order being entered
- Fees for in-person walk-throughs at move-in or move-out
What Did NOT Change
With REALTOR® advocacy, move-in fees and security deposit regulations were preserved as-is in the final bill. The January 1, 2027, effective date provides time for members to review lease templates, advertising practices and fee structures before the law takes effect. We encourage all members to consult with legal counsel to ensure compliance.
Update to Leases
Once signed by the Governor, the effective date of these new regulations will be January 1, 2027. Our Forms and Contracts Committee will make necessary updates to the 2027 lease and any other supporting documents to ensure they align with this new law.
Click here to view a shareable, printable overview of House Bill 3564 from Illinois REALTORS®.
Questions? Contact our Advocacy Team at advocacy@chicagorealtor.com.