Waukegan's Short-Term Rentals: The Rules That Matter

Every city handles short-term rentals a little differently. In Waukegan, Illinois, there are 6 distinct rules that residents and property owners should be aware of. Some are stricter than what neighboring cities enforce, and others are more relaxed. Here is what you need to know.

Occupancy Limits

Waukegan does not have a stand-alone short-term rental ordinance with a numeric overnight occupancy cap. STR operators must obtain a City business license through the Business Licensing Department, comply with the Waukegan Unified Development Ordinance (UDO) zoning rules adopted July 1, 2024, and meet the occupancy limits in the underlying Property Maintenance Code applicable to the dwelling.

Key details: Stand-Alone STR Cap: None adopted. Governing Framework: UDO 7/1/2024 + Bus License. Occupancy Source: Certificate of Occupancy. Permit Authority: Business Licensing Dept. Contact: 847-599-2500.

Operating a short-term rental without a City business license, or beyond the occupancy permitted by the certificate of occupancy and life-safety inspection, is enforced by the Business Licensing Department, the Building and Code Department, and the Fire Department. Penalties under the general Code of Ordinances run from $25 to $750 per offense (each day a separate offense under the Zoning Ordinance penalty section), plus suspension or revocation of the business license and possible referral to the Planning and Zoning Commission for revocation of any conditional use permit.

The rules around occupancy limits in Waukegan lean permissive, but that does not mean anything goes.

Insurance Requirements

Waukegan's Code of Ordinances does not impose a numeric liability insurance minimum specifically on short-term rental operators. Hosts must obtain a City business license and pass Fire and Building Department inspections, and platform-based hosts typically rely on Airbnb Host Liability Insurance and Vrbo Liability Coverage paired with a homeowner or landlord policy that covers short-term rental activity.

Key details: Numeric Minimum: None in code. Business License: Required. Possible CUP Condition: Per UDO district. Platform Default: Up to $1M per occurrence. State Statute: No IL STR insurance minimum.

Failure to maintain liability coverage that is adequate for the rental activity does not, by itself, trigger an ordinance penalty in Waukegan because no numeric STR insurance minimum has been adopted. However, operating without the underlying business license, or in violation of a Conditional Use Permit condition that requires proof of insurance, exposes the operator to fines of $25 to $750 per offense and suspension or revocation of the license and CUP under the general penalties of the Zoning Ordinance.

Waukegan is more permissive than most cities when it comes to insurance requirements. That said, there are still limits.

Noise Rules

Short-term rental guests in Waukegan must comply with the city's noise ordinance. Sound audible at 50 feet or more is prohibited. Hosts are responsible for guest compliance.

Key details: Standard: 50-foot audibility rule applies to all. Enforcement: Waukegan PD: 847-599-2608. Host Responsibility: Must inform guests of noise rules. Code: Waukegan MC Ch. 11, Art. II.

Hosts receive a warning on first noise complaint. Second complaint results in a $250 fine. Third complaint triggers permit suspension hearing. Guests may be cited directly under the noise ordinance.

Taxes & Fees

Short-term rental operators in Waukegan must collect Illinois Hotel Operators' Occupation Tax (6%) and any applicable local hotel/motel taxes. Registration with IDOR required.

Key details: State Tax: 6% Hotel Operators' Occupation Tax (35 ILCS 145). Local Tax: Check with Waukegan Finance for local rate. Registration: IDOR registration required. Platforms: Airbnb auto-collects state tax in most IL jurisdictions.

Failure to collect or remit occupancy taxes carries penalties of 10% of the unpaid amount per month, plus interest. Operating without tax registration may result in back-tax assessments plus fines.

Parking Rules

STR guests must comply with Waukegan's alternate parking ordinance: park on odd side on odd days, even side on even days (12:01 AM-11:59 AM). Violations result in $25 tickets.

Key details: Alternate Parking: Odd side on odd days, even side on even days. Enforcement: 12:01 AM-11:59 AM daily. Fine: $25 per violation. Host Duty: Communicate parking rules to guests.

Parking violations are addressed through the noise/nuisance complaint process. Hosts receive warnings for first offenses, with fines of $100–$250 for repeat issues that affect the STR permit status.

Permit Requirements

Waukegan requires short-term rental operators to register their business and comply with city licensing requirements. Contact the Business Licensing Division for current registration procedures.

Key details: Registration: Required through Business Licensing. Zoning: Must comply with UDO land use rules. UDO: Adopted July 1, 2024. Contact: Waukegan Business Licensing Division.

Operating without a permit carries fines of $500 per day. Failure to display the permit number on listings results in a $250 fine. Permits may be revoked after three substantiated complaints within 12 months.

The Bottom Line

Compared to many U.S. cities, Waukegan gives residents more room on short-term rentals. 2 of the 6 rules here are rated permissive. But permissive does not mean unregulated. There are still requirements, and the city does enforce them when violations are reported.

This guide is based on Waukegan's current municipal code. Local rules can and do change, so check the individual ordinance pages for the latest details, penalties, and FAQs.