Chicago sues Airbnb and host company over alleged short-term rental violations

US: The City of Chicago has filed a lawsuit against Airbnb and local host company Slumber Stay, alleging they failed to comply with the city’s short-term rental regulations.

The complaint, filed in Cook County Circuit Court, alleges that Slumber Stay and its owner, Milan Rubenstein, improperly listed multiple short-term rental properties using a single non-transferable hotel licence and continued operating some listings after receiving city citations.

Chicago is also accusing Airbnb of allowing the allegedly unlawful listings to remain on its platform despite being aware of repeated violations of the city’s Shared Housing Ordinance.

According to the lawsuit, the city issued nearly 200 violations to Slumber Stay during 2024 and 2025. Officials allege hosts were able to evade enforcement by creating new listings using different names, registration numbers and approximate property locations.

The lawsuit also claims Airbnb’s data-sharing practices made it difficult for the city to verify whether listings complied with local licensing requirements, as exact property addresses were not provided.

Chicago introduced its Shared Housing Ordinance in 2016, later strengthening the rules in 2020. The regulations require hosts to register with the city, limit the number of short-term rentals permitted in some buildings and impose restrictions in certain neighbourhoods.

City officials said the legal action aims to improve compliance with existing regulations and support housing affordability.

Airbnb said it had not yet reviewed the court filing. The city is seeking fines, fees and a court order preventing the continued operation of allegedly unlawful short-term rental listings.

Highlights:

• Chicago has filed a lawsuit against Airbnb and host company Slumber Stay
• The city alleges repeated violations of its short-term rental regulations
• Officials claim nearly 200 violations were issued during 2024 and 2025
• Chicago argues Airbnb’s platform made enforcement more difficult
• The city is seeking fines and an injunction against the alleged unlawful rentals