Mayor Brandon Johnson plans to introduce a sweeping ordinance that aims to protect the city’s renters from eviction and predatory practices.
The “Protecting Renters Ordinance” seeks to update the city’s 40-year-old Residential Landlord Tenant Ordinance (RLTO), which oversees the legal rights and responsibilities of tenants and landlords.
The ordinance would also establish a rental registry, and create a new administrative body that works with renters and landlords to resolve disputes, among other measures.
Chicago’s Department of Housing Commissioner Lissette Castañeda said the proposal “[meets] the moment. Affordability is at the top of everyone’s concerns, and we want to make sure that something that’s been necessary for a long time can finally get done.”
City officials say the measure, which the mayor plans to introduce to the city’s housing committee next month, affects more than 600,000 renter households across Chicago,
According to a draft of the ordinance, updates to the RLTO include a ban on hidden junk fees, such as application and processing fees charged on top of rent, and require that any amounts charged to renters reflect actual, documented costs. It also establishes a Tenant Bill of Rights and requires landlords to disclose if they’re using algorithmic pricing tools.
The ordinance would also create a rental registry, which housing advocates have sought for years. The city currently has no comprehensive record of its more than 500,000 rental units, nor does it keep a record of who owns the properties and whether they are complying with the law. In addition, more property owners are using limited liability companies, or LLCs, which can shield problem landlords from city enforcement and make it difficult for renters to address their living conditions, as WBEZ reported last year.
“It’s very difficult to hold those who are doing wrong by their tenants accountable,” said Jung Yoon, the mayor’s chief of policy. “What the rental registry will help us do is not just know quickly whom to contact, but also to start tracking patterns and understanding trends” regarding building violations and speculation in gentrifying neighborhoods.
The rental registry, Yoon said, would require landlords to pay an annual fee, and the amount would be determined by building size and owner occupancy. Owner-occupied, two- to six-unit buildings and nonprofit affordable housing are exempt from the fee. Larger building owners would be charged anywhere from $20 to $60 a unit.
The annual fees, which the city expects could total around $20 million, would help fund the initiatives laid out in the bill, Yoon said. The funds would go toward improving inspections and enforcement.
The money would also establish the Bureau of Rental Housing Services, designed to be the city’s first coordinated hub for rental housing. The bureau would administer the rental registry, provide renters with emergency rental and relocation help, refer tenants to eviction prevention programs, provide compliance guidance for landlords and enforce tenant protections.
But some landlords and realtor groups are skeptical of the new proposal, arguing that these measures are burdensome and will ultimately drive up the cost of housing.
The measure “is putting in dozens of new requirements, obligations and costs to operate a building,” said Jeff Weinberg, founder and president of Drexel Properties, which owns 600 units and manages 85 buildings.
He is also on the executive committee of the Neighborhood Building Owners Alliance, a non-profit representing housing providers across the city.
Weinberg, who said 85% of his units are affordable, took issue with the annual rental registry fee. He also questioned the “Just Cause for Eviction” provision of the ordinance, which in part requires landlords to pay relocation assistance to tenants in a no-fault eviction, such as when rehabbing the property, converting to condos or demolition.
“You have to pay people to move out, you have to pay a registry,” he said. “That is not solving the problem. The real problem that we have is a [housing] supply issue.”
Tom Benedetto, who represents the Chicago Association of Realtors, said half of the group’s members are housing providers. He said the ordinance would “make more neighborhood-focused housing providers think twice about investing in their community and maybe getting out of the business altogether.” Benedetto said that opens the door to larger corporations and investors.
But housing advocates said these criticisms of the mayor’s proposal are old.
“Landlords and real estate interests very often use the argument that any regulation will increase costs,” said Jonah Karsh, a housing organizer with the Metropolitan Tenants Organization.
Karsh said the rental landscape has changed in the past few decades.
“A lot more of our housing stock is owned by corporations or people that are owning the property as an investment property rather than one that they live in themselves,” Karsh said.
He added that many cities — including New York City, Los Angeles, Philadelphia, and north suburban Evanston — already have policies similar to those the mayor is proposing.
Roderick Wilson, with affordable housing advocacy organization Lugenia Burns Hope Center, said the proposed ordinance is a collection of tenant protections that housing advocates have been demanding for years.
He added that the real estate lobby argues that “mom-and-pop landlords” would be overly penalized by any regulations or fees, but he said the proposed ordinance provides exemptions for such property owners.
Wilson hopes Chicagoans, more than half of whom are renters, will encourage their Council representatives to vote for the measure — especially amid the tight housing market and challenging economic conditions.
“It’s hard out here for folks — you have landlords raising rents, maintenance of buildings not being up to speed, a high increase in folks being evicted,” he said. “This [proposal] is a step in the right direction.”