The ordinance also limits the types of fees landlords may charge tenants. Application fees would be limited to $20. Acceptable fees would include pet fees, utility and internet pass-through costs and other pass-throughs for tenant-incurred costs for things like key replacement or the cost of “optional” services. Late fees and other lease-related penalties would still be allowed.  

Ald. Daniel La Spata (1) said the optional services provision concerned him. 

“I want to make sure that landlords don't turn items that are available to all into optional items,” La Spata said. “For example, if there’s a fitness center in your building, I don't want that becoming optional, or [if] there's a rooftop deck, that should not become optional.” 

Donovan Harvey, director of housing for the mayor’s office, told La Spata that provision would only apply to services explicitly requested by tenants or amenities that a landlord charges for independent of the base rent.

“The intention of the section, as written, is to prevent situations where tenants are charged fees for amenities that they're not using and didn't ask for,” Harvey said. “So, if there is a mandatory $120 pool fee for a tenant that can't swim, it’s the position of this proposal that the tenant shouldn’t have to be paying for that.” 

The governor signed legislation (HB3564) Friday that will impose $50 limits on application fees unless actual service costs are higher, ban almost a dozen “junk fees” charged by landlords and property management companies and require disclosure of any non-optional fees. It will go into effect in January. 

But the legislation gave municipalities the ability to be stricter, and the city intends to take advantage not only through the $20 application fee cap but also by proposing a ban on move-in fees. 

Castañeda said the city’s fee reform measures improve upon the state bill by accounting for landlords renaming fees to get around the ban by instead giving them a way to recoup actual costs. 

The ordinance would make the city’s Right to Counsel pilot program, which has helped provide low-income and moderate-income Chicagoans with legal representation in eviction court cases since 2022, a permanent part of the city budget. 

The pilot program is currently funded until the end of 2027. Castañeda said it has saved the city approximately $13.6 million since launch, easing “pressure on things like emergency rooms and on the homelessness system.”

Finally, the ordinance would incorporate the provisions of the Just Cause for Eviction Ordinance, under which a landlord would have to provide a reason for evicting someone or not renewing a lease. For lease nonrenewals that are not a tenant’s fault, landlords would have to pay the displaced tenants relocation assistance. 

“Without Just Cause, tenants are unexpectedly displaced through no fault of their own,” said Tulsi McDaniels, an organizer with the Metropolitan Tenants Organization. “The consequences of this can be devastating, because the cost of living is so high, let alone with an unexpected move.” 

If a tenant misses rent payments, violates lease terms, engages in criminal activity or misses their deadline to sign a lease renewal offer, the landlord would be able to recover the unit without paying relocation assistance.

For all other lawful reasons, landlords must pay those tenants to mitigate the cost of moving.

If the nonrenewal occurs due to the conversion of the building into condominiums; the unit’s demolition; the need to significantly repair the unit or building; the removal of the unit from the residential market or plans for either the owner or their relative to move into the unit, large landlords would have to provide assistance equal to five months’ rent or $5,000, whatever is greater. Landlords for owner-occupied two-to-six-flat buildings would have to provide the greater of $3,000 or three months’ rent. 

If the nonrenewal occurs for any other lawful but unlisted no-fault reason, the large landlords would owe the greater of $10,000 or 10 months’ rent. Landlords for owner-occupied two-to-six-flat buildings would still owe just $3,000 or three months’ rent, whichever is greater.

But landlords would be allowed to provide displaced tenants with a comparable unit or a rent concession or credit for the remainder of the lease instead of the relocation payment, or a combination equal in value to what the ordinance requires.

The housing commissioner said the Just Cause provision aims to eliminate 10,000 annual displacements.

Yoon also noted that a previous draft that limited “unconscionable” rent hikes was found to be too confusing through feedback. That language was removed to ensure that Chicago did not run afoul of Illinois’ ban on rent control, she said. 

Opponents, including some building owners and representatives from the property management industry, said the ordinance would cause the cost to build and provide housing to rise.

“This ordinance adopts policies commonly found in some of the nation's least affordable housing markets, including New York, San Francisco, Los Angeles and Washington, D.C.,” said Jon Kozlowski, government affairs director for the Chicagoland Apartment Association. “Cities that build see rents fall. Cities that overregulate see rents rise.”

Neighborhood Building Owners Alliance of Chicago President Michael Glasser said the thesis of the ordinance was wrong.

“You can't make housing more affordable by making it more expensive to provide housing,” Glasser said in a statement. “Over 100 new regulations will raise costs for owners and tenants alike.”

Ald. Anthony Quezada (35), who himself rents, said he didn’t see the ordinance as a threat to affordability.

“We need more affordable housing, but building housing and strengthening renters’ protections are not competing goals,” Quezada said. “They go hand in hand. If we want people to stay in our neighborhoods, raise their families here and put down roots, then we have to make sure that they have both housing options and basic protections.” 

But some found the amount of input from housing providers insufficient. 

“There's a lot of good things in this ordinance that I want to support,” said Ald. Gilbert Villegas (36), who chairs the council zoning committee. “But here we are once again where an ordinance is being drafted, and I'm hearing from housing providers that there wasn't enough engagement from their side.” 

The ordinance was born out of the work of the city housing department’s Advisory Committee for Renting Right, which includes tenant advocacy, disability rights, housing justice and housing provider groups. Edwin Ortiz-Reyes, director of policy, planning and legislative affairs in the Department of Housing, said about a third of those on the advisory committee represented housing providers. 

“This whole adversarial approach just really frustrates me,” Villegas said. “It's always you guys putting us in a position where it’s: ‘Are you with these guys or with that guy?’” 

While Housing and Real Estate Chair Byron Sigcho-Lopez (25) said he thinks the hearing made it clear that some more discussion among alderpeople and stakeholders was needed, the housing committee will meet again July 8 and could vote on the ordinance. 

Correction: This article was updated to clarify that application fees would be capped at $20, regardless of actual costs of credit and background checks.