3 problems remain in mayor’s revised Chicago renter ordinance

The Protecting Renters Ordinance risks hurting affordability.

Mayor Brandon Johnson’s Protecting Renters Ordinance (PRO) would rewrite landlord-tenant rules in Chicago in an effort to strengthen tenant protections and housing stability.

But adding costs and restrictions for landlords risks undermining affordability.

The proposal has changed since August. An earlier version would have required landlords to pay tenants thousands of dollars for declining to renew a lease. That broad mandate is gone from the current proposal.

A competing ordinance (FAIR) also is before the City Council. Votes on both proposals were delayed Sept. 29 to give the two sides more time to find common ground.

The revised PRO still raises three concerns for Chicagoans who want more rental housing and fewer barriers to providing it.

1. It would restrict how owners charge costs.

The proposal’s fee rules permit only specified charges beyond rent. They cap an application fee at the lesser of processing costs or $20 and prohibit a move-in fee. The ordinance also would limit security deposits to one month’s rent.

Lower upfront charges sound appealing to renters. Yet screening, preparing a unit for a new tenant and covering potential damage still costs money. Harvard’s Joint Center for Housing Studies says that capping upfront costs can lead to higher monthly rent.

The Federal Trade Commission also describes larger security deposits as one response landlords use to an applicant’s credit. Restricting the ways an owner can recover those costs could make renting to an applicant with a limited credit history less attractive.

2. It would make rental registries an annual obligation.

Under the one provision, owners would have to register each rental unit every year and report information including its occupancy status, monthly rent and ownership details. The registry would identify owners and combine rental information with inspection and violation records on a searchable website to support oversight and enforcement.

Landlords would be charged an annual fee of $20, $40 or $60 for most units, depending on building size. Owner-occupied buildings of six or fewer units would be exempt from the fee but not from registration. Violations could bring fines per unit and per day.

A registry might seem to simply help the city identify owners and inspect problem properties. However, tenants already can report building violations by calling 311 or using CHI311, which offers online and app-based reporting, and seek help through the Renter’s Rights Hotline. Inspection and violation records are searchable, while Census estimates provide market-level rent and vacancy information. (These resources don’t duplicate a complete unit-by-unit registry.)

PRO goes further by collecting extensive information and charging recurring fees across the rental market. For a small owner, that adds an annual task and another opportunity for a costly error. City Council should show why the information already available to city departments is insufficient before imposing a new reporting system on every rental unit.

3. It would contain owners after some major repairs.

Landlords already must honor the agreed rent during a fixed-term lease. PRO’s “right to return” provision would also give eligible tenants displaced by certain code compliance activities, including substantial repairs that cannot be done while a unit is occupied, the option to return when the unit is ready. A returning tenant’s rent would have to be the same as when they left, under a lease containing materially the same terms and conditions.

The proposal does not specify mandate a duration for a new lease or say the original term restarts on the return date. What happens when the original lease expires during repairs needs clarification.

Tenants should not lose their homes because an owner makes necessary repairs, and owners must continue to meet their legal repair obligations. But preventing an owner from adjusting rent after the original lease expires to help cover substantial repair costs could weaken incentives to invest in improvements or encourage owners to postpone work. Aldermen should clarify and examine whether that rule could discourage investment in older buildings that most need improvements.

Johnson’s removal of the broad relocation mandate addressed a major problem in the original ordinance. The remaining guidelines still merit scrutiny.