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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
Last week I walked you through Mayor Brandon Johnson's Protecting Renters Ordinance. What is in it, and where I think it backfires on the renters it is built to help. At that point it was still just a proposal.
This week it went to City Hall. It got its first public hearing, and the fight is officially on.
So let me give you the facts. What happened at City Hall, what is actually in the bill now, and what the people pushing back are saying. Some of this comes straight from the reporting. Some of it comes from our conversation with Mike Glasser, who runs the Neighborhood Building Owners Alliance. We taped that episode the day after the public hearing and the full thing airs July 7, but the news is moving too fast to sit on, so here is where it stands today, including the parts that already shifted in the exact spots I told you to watch.
Key Takeaways
- The ordinance is no longer just a proposal. Johnson formally introduced it on Monday and it got its first public hearing in the City Council Housing Committee. No vote was taken.
- A full City Council vote is expected in the fall, so nothing about this is settled.
- Owner groups are pushing back hard. The NBOA, which represents small and mid sized independent owners, says the bill stacks more than 100 new regulations onto owners and renters alike.
- Two pieces I flagged last week already changed. The city pulled the part that paid tenants to move out over big rent increases, and dropped the security deposit interest rule. Both moved because of rent control concerns.
- The registry fee is now openly tied to inspections, attorneys, and enforcement. That is the exact cost I told you to watch.
- Just cause for eviction is still in, and it still carries a relocation payment of $10,000 or 10 months of rent, whichever is greater, for a no fault move out.
- New piece. Security deposits would be capped at one month of rent.
- Even an alderman who is open to supporting it said out loud that owners will pass these costs on to renters.
- Mom and pop owners are still carved out of the registry fee. Owner occupied buildings of six units or less, nonprofits, and CHA or Housing Trust Fund units are exempt.
- Nothing is law yet. You have the summer to get ready before the fall vote.
It Went To City Hall This Week
Here is what actually happened. On Monday the mayor introduced the Protecting Renters Ordinance at a press conference and sent it straight to the Committee on Housing and Real Estate, which is chaired by Ald. Byron Sigcho-Lopez. The committee held a three hour public hearing. No vote was taken. Sigcho-Lopez said more changes are coming and that a full council vote could land in the fall.
One detail worth your attention. The bill went directly to committee, and Finance Chair Pat Dowell pushed back hard on that, saying direct introductions are supposed to be for emergencies and this is not one. When a mayoral aide said tenants cannot afford to wait, Dowell flatly called that a bunch of junk. That is not a landlord talking. That is a sitting alderman. It tells you the moderate wing of the council is not on board yet, and that matters when the votes get counted in the fall.
The Pushback From Owners
The bill drew heavy opposition at the hearing, and the loudest of it came from owner groups. The NBOA, led by Mike Glasser, represents the small and mid sized independent owners who hold so much of this city's housing. Glasser's main argument is volume. He says the ordinance loads more than 100 new regulations onto owners, and that those costs do not stay with the owner. They land on owners and renters alike.
His sharpest objection is the just cause provision. As Glasser reads the draft, an owner could be forced to renew the lease of a tenant who disturbs or harasses the neighbors, or even one engaged in criminal activity, because declining to renew would have to clear the city's just cause bar. As he put it, "None of that makes a single apartment more affordable." I have managed enough buildings to know the situation he is describing is a real one.
What Already Changed, And Why It Proves The Read
Here is the part that jumped out at me when I compared the news to what I wrote last week. Two things I flagged already moved, before the first hearing even ended.
I called just cause a side door to rent control. This week the city pulled the provision that would have paid a tenant $10,000 to move out in order to dodge what the bill called an unconscionable rent increase. It came out because people said it looked like a first step toward rent control, which the state of Illinois bans. A separate rule that would have made owners pay interest on security deposits got dropped too. When the city quietly removes the most rent control flavored piece of its own bill, that is not a small thing. That is the city conceding the point.
I also told you to watch one detail above all others. Whether inspections get bolted onto the registry. Well, the city is now describing the roughly $20 million the registry fee would raise as money for inspections, attorneys, and enforcement. That is the inspection cost I said to watch, in writing, straight from the city. A clean registry I can live with. A registry that funds an inspection regime is a different animal, and that cost has a way of rolling downhill to renters.
The mayor's team also said the relocation assistance required of mom and pop owners has been reduced, in their words to account for the different burdens smaller owners carry. So the proposal is bending. The question is how far, and in whose direction.
What Is Still On The Table
Even after the changes, this is a big bill. Here is what is still in it.
A citywide rental registry. Every non owner occupied rental would register each year and pay a fee of $20 to $60 per unit based on building size. Owner occupied buildings of six units or less, nonprofit owned units, and units tied to the CHA or the Low Income Housing Trust Fund are exempt from the fee.
A new Bureau of Rental Housing Services to run the registry, take complaints, and enforce the rules.
A ban on junk fees, where any charge has to match a real, documented cost.
A Tenant Bill of Rights.
A disclosure rule on algorithmic pricing software.
Just cause for eviction, with relocation pay of $10,000 or 10 months of rent, whichever is greater, for a no fault move out like a gut rehab, a condo conversion, or a teardown.
A new piece that was not front and center last week. A cap on security deposits at one month of rent.
And the existing eviction counsel program for income eligible tenants, locked in.
Even Supporters Admit Where The Cost Goes
The most honest moment of the hearing did not come from a landlord. It came from Zoning Chair Gilbert Villegas, who said he is open to a version of this. He said owners are in the business to make money, and they will almost certainly pass these costs on to the renter. Then he asked for more discussions to make the bill something more members could support.
Sit with that. A council member who might vote yes said the quiet part out loud. The costs flow to the renter. That is the entire argument I made last week in a single sentence, from a man on the other side of the table.
The owners who testified said the same thing in their own words. A Chicago Association of Realtors policy leader said the costs get absorbed by the market as higher rents, deferred maintenance, and fewer available units. A small building owner from Edgewater called the bill the straw that could break the camel's back and warned that if the mom and pops sell out, the corporate buyers move in. That is the small landlord exit I worry about most, and it is not theoretical anymore. It is what owners stood up and said into a microphone this week.
I broke the full backfire down last week, so I will not rerun all of it here. The link is at the bottom if you want the deep dive.
Where This Goes From Here
No vote happened. Sigcho-Lopez wants more changes. A full council vote is expected in the fall. So the bill that finally gets voted on will not be the bill we saw Monday. It already changed twice before the first hearing wrapped. Expect it to keep moving all summer.
What You Should Do This Summer
My advice has not changed, it just got more urgent. Use this window.
Clean up your ownership records now, so a registry is a five minute task and not a fire drill. Know your true cost per unit, because every new rule in this bill is a cost, and you cannot manage a number you do not track. And make your screening fair, consistent, and written down. If just cause passes anything close to as written, the tenant you approve at move in matters more than ever, because removing the wrong one gets slower and more expensive.
The owners who already run a tight ship will be fine. The ones who wing it will scramble. You have months, not days, to decide which one you want to be.
FAQ
Did the Protecting Renters Ordinance pass this week? No. The mayor introduced it on Monday and it got its first public hearing in the City Council Housing Committee. No vote was taken. A full council vote is expected in the fall.
What actually changed at the hearing? The city removed the provision that would have paid tenants to move out over big rent increases, dropped the rule requiring interest on security deposits, and reduced the relocation assistance required of smaller owners.
Who is Mike Glasser? He is the president of the Neighborhood Building Owners Alliance, the NBOA, which represents small and mid sized independent owners across Chicago. The group has been one of the more vocal opponents of the ordinance.
Is just cause for eviction still in the bill? Yes. It is still in, with a relocation payment of $10,000 or 10 months of rent, whichever is greater, for a no fault move out.
Does the rental registry still cost money? Yes. The fee is $20 to $60 per unit per year based on building size. Owner occupied buildings of six units or less, nonprofits, and CHA or Housing Trust Fund units are exempt from the fee.
Is the registry fee paying for inspections? The city now describes the money as funding inspections, attorneys, and enforcement. That is the detail I told owners to watch, because inspection costs tend to land on renters.
What is the deal with security deposits? The draft would cap security deposits at one month of rent.
What should owners do right now? Nothing drastic, because it is not law. But clean up your records, know your real costs, and tighten and document your screening before the fall vote.
Don't Go At This Alone!
Rules in Chicago change fast, and this one is changing in real time. At GC Realty and Development we manage around 1,500 units for more than 500 investors, and staying ahead of this is our full time job. We were tracking this bill before it ever reached a committee, and we will track every change it goes through between now and the fall vote. When a new ordinance lands, our owners do not lose sleep, because we handle it.
Mark's Mission: My personal mission is to help property owners across Chicagoland keep more of their time, more of their money, and less of the risk that comes with running rentals in one of the most regulated markets in the country. If you want a property manager that stays up on what is going on and watches out for your interest, let's jump on a call.
