Short-Term Rentals in Peoria, IL

If you live in Peoria or are thinking about moving there, short-term rentals are one of those things you probably won't think about until they affect you directly. Peoria has 4 specific rules on the books covering different aspects of short-term rentals, and some of them might surprise you.

Short-Term Rental Permits

Peoria's Unified Development Code lets short-term rentals operate by right only where the owner personally occupies an Estate Residential or Single-Family Residential property; everywhere else in those districts an STR needs a special-use permit. Every operator must also carry a Hotel/Motel license and pay the room rental tax.

Key details: By-right condition: Owner-occupied Estate/Single-Family Residential only. Guest cap: No more than 6 adult guests at a time. Special-use density cap: 1% of parcels per Neighborhood. Special-use separation: 1,500 feet from another special-use STR. Hotel/Motel license fee: $75.00 annually, Jan. 1-Dec. 31.

Operating or advertising a short-term rental without the required Hotel/Motel license is unlawful under Sec. 27-160, and no license is issued or renewed while use-and-privilege tax, fines, or penalties remain unpaid under Sec. 27-149(b). A license found delinquent on tax can be suspended or revoked after a hearing, and a revoked license cannot be reapplied for until a full calendar year has passed.

This is one of the stricter rules in Peoria's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

Occupancy Limits

Peoria caps short-term rental stays at six adult guests at any one time, on top of whatever maximum occupancy the Building and Fire Code otherwise sets for the unit. Section 5.3.3.B.3 of the Unified Development Code ties the guest cap directly to that occupancy standard, and the limit applies regardless of how many bedrooms or how large the dwelling is.

Key details: Adult guest cap: Six adults at any one time. Also governed by: Building and Fire Code occupancy standard. Applies to: Every short term rental in Peoria. Governing section: UDC Section 5.3.3.B.3. Related requirements: Hotel Motel license, property registration.

Exceeding six adult guests in a short term rental at one time violates Section 5.3.3.B.3 and can be cited by the City alongside failures to hold the required Hotel Motel license or residential property registration. A short term rental found in violation of the occupancy standards risks having its by-right status challenged or, for a special-use rental, having the special use approval revoked through the process outlined in Section 2.9.

Primary-Residence-Only Rule

Peoria only allows a short-term rental by right in its Estate Residential and Single-Family Residential districts, and the Form Districts R-4 Frontage and West Main Local Frontage, when the property is owner-occupied by a natural person. Section 5.3.3.B.1-2 of the Unified Development Code pushes every non-owner-occupied rental in those districts into the discretionary special use process, capped citywide by density and spacing limits.

Key details: By-right condition: Property owner-occupied by a natural person. Non-owner-occupied option: Special use permit required. Form Districts: No non-owner-occupied option at all. Special-use density cap: 1% of parcels per neighborhood. Special-use spacing: 1,500 feet between special-use rentals.

Operating a non-owner-occupied short term rental by right in the Estate Residential, Single-Family Residential, R-4 Frontage, or West Main Local Frontage districts, without the required special use approval, violates Section 5.3.3.B.1-2 and is enforceable as a zoning code violation. In the Form Districts the use is barred entirely absent owner-occupancy, with no special use fallback available under Section 5.3.3.B.2.

This is not one of those rules that cities tend to ignore. Peoria actively enforces its primary-residence-only rule requirements.

Taxes & Fees

Peoria treats short-term rentals like Airbnb stays the same as hotel rooms for tax purposes: the same 7 percent room tax plus 1 percent tourism fund tax, 8 percent total, has applied to STR units since January 1, 2021. Operators also need an annual $75.00 city license, and a registered neighborhood association can block a new STR license by producing a recorded covenant that prohibits the use.

Key details: STR tax rate: 8 percent (7% room tax + 1% tourism). STR taxed since: January 1, 2021. Annual STR license fee: $75.00. 2020 registration fee (legacy): $25.00, expired Dec 31, 2020. Association objection window: 10 days to produce covenant.

Operating an STR without the license required by Section 27-149(a) is unlawful, and the city will not issue or renew that license while the unit is delinquent on the room tax or on related fines. Filing the annual tax return late under Section 27-151(b.1) draws the same penalty structure as hotels: 3 percent of the tax owed per month, or 20 percent for a fraudulent failure to pay. An STR operating in defiance of a properly recorded association covenant, or one that skips the January 1 non-conforming renewal deadline, loses its right to operate.

This is one of the stricter rules in Peoria's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

The Bottom Line

Peoria is tougher than many cities when it comes to short-term rentals. Out of the 4 rules covered here, 3 are rated strict. If you are a homeowner, renter, or business owner in Peoria, take the time to understand these requirements before they become a problem. Most violations come with fines, and some repeat violations can escalate.

These rules come from Peoria's publicly available municipal code. For complete penalty schedules, exemption details, and answers to common questions, see the individual ordinance pages throughout this guide.