Overview: Are Short-Term Rentals Allowed in Oregon, IL?

Short-term rentals are explicitly allowed in Oregon, IL under specific conditions. The City permits short-term rentals (rentals of fewer than 30 days, including Airbnb, Vrbo, vacation rentals, tourist homes, etc.) in R-1 zoning districts as a special use, subject to obtaining a Short-Term Rental permit and meeting all regulatory requirements.

How to Start a Short-Term Rental Business in Oregon, IL

Step-by-Step Process

1. Verify Zoning Compliance

   • Confirm your property is located in R-1 zoning district
   • Properties zoned other than R-1 are not permitted for short-term rentals

2. Prepare Required Documentation

   • Complete the Short-Term Rental Application Form
   • Gather all required supporting documents (see below)

3. Submit Application to City Clerk

   • Submit completed application with required fees
   • New application: $100 for owner-occupied, $250 for non-owner-occupied

4. Planning Commission Review

   • Application undergoes review by the Planning Commission
   • Special use permit approval required

5. City Council Approval

   • Final approval required from the City Council after Planning Commission recommendation

6. License Issuance

   • Upon approval, receive your Short-Term Rental license
   • Display license within the rental property

7. Tax Registration

   • Obtain IDOR Hotel Operators Tax License Number
   • Register with Ogle County for 3% tourism fund tax collection

8. Annual Renewal

   • License renewals due June 1st each year
   • Renewal fees: $25 for owner-occupied, $50 for non-owner-occupied

Required Documents, Permits, and Licenses

Essential Documents

• Short-Term Rental Application Form (one per property)
• Proof of Liability Insurance (minimum $500,000 per occurrence)
• IDOR Hotel Operators Tax License Number
• Certificate of Insurance evidencing required liability coverage
• Property ownership documentation (if different from applicant)

Safety and Compliance Requirements

• Carbon Monoxide Detectors installed per city code requirements
• Smoke Detectors installed in:
  • Each guest room used for sleeping purposes
  • Each hallway or corridor on each floor
  • Each living room or lounge area
  • Each dining room
• Bathroom Facilities: At least one bathroom for every four adult guests
• Primary Residence Verification (if claiming owner-occupied status)

Business Requirements

• Business Registration with appropriate tax authorities
• Compliance with all State of Illinois tax laws
• Display of license within the short-term rental property
• Responsible Party Contact Information for emergency situations

Specific Regulations for Short-Term Rentals

City-Level Regulations (Oregon, IL)

Zoning Requirements:

• Short-term rentals only permitted in R-1 zoning districts
• Must obtain special use permit from Planning Commission
• Properties in historic districts require additional review

Occupancy Limits:

• Maximum of four adult guests per bathroom (ratio requirement)
• No specific guest limit per property stated, but bathroom ratio governs occupancy

Safety Standards:

• Mandatory installation of carbon monoxide and smoke detectors
• Compliance with city building and fire codes
• Emergency contact requirements

Insurance Requirements:

• Minimum liability insurance coverage of $500,000 per occurrence
• Certificate must be provided during application process

License Display:

• License must be displayed within the short-term rental property at all times

Renewal Requirements:

• Annual license renewal due June 1st each year
• Failure to renew may result in license suspension

County-Level Regulations (Ogle County)

Tax Collection:

• 3% tax paid to Ogle County supporting regional tourism fund
• Tax collection administered by Ogle County
• Additional county-level compliance may apply

State-Level Regulations (Illinois)

Hotel Operators' Occupation Tax:

• 6% state tax on short-term rentals under 30 days
• Total combined tax rate: 9% (6% state + 3% county)
• IDOR Hotel Operators Tax License required
• Quarterly tax filing may be required

Property Standards:

• Compliance with Illinois Property Code standards
• Building and safety code compliance
• Local health department requirements may apply

Contact Information

City of Oregon - Primary Authority

Oregon City Hall

• Address: 115 North 3rd Street, Oregon, IL 61061
• Phone: 815-732-6321
• Website: cityoforegon.org/short-term-rentals/
• Contact Page: cityoforegon.org/contact
• Office Hours: Not specified (call for current hours)

Key Contacts:

• City Clerk: Primary contact for permit applications
• Planning Commission: Reviews special use permit applications
• City Council: Final approval authority for permits

Ogle County - Tax Administration

Ogle County Government

• Address: Contact via county website for tax registration
• Website: www.oglecountyil.gov/
• Function: Collects 3% tourism fund tax for short-term rentals

Illinois Department of Revenue

State Tax Authority

• Website: www2.illinois.gov/
• Function: Issues Hotel Operators Tax License
• Requirements: State tax compliance for all short-term rentals

Important Links and Resources

Official City Resources

• Main STR Page: cityoforegon.org/short-term-rentals/
• Municipal Code 6.41: oregon.municipalcodeonline.com/book?type=code#name=6.41_SHORT-TERM_RENTALS
• Facilities Requirements: oregon.municipalcodeonline.com/book?type=code#name=6.41.060_Facilities
• Application Form: cityoforegon.org/wp-content/uploads/2024/04/Short-Term-Rental-Application-Form-Fillable.pdf
• Tax Letter from Mayor: cityoforegon.org/wp-content/uploads/2024/04/Short-Term-Rental-Tax-letter.pdf

Contact and Information Pages

• City Contact: cityoforegon.org/contact
• City Homepage: cityoforegon.org/

Social Media and Additional Information

• Facebook: www.facebook.com/oregon.il/
• Instagram: www.instagram.com/cityoforegonil/

State Resources

• Illinois Department of Revenue: www2.illinois.gov/
• Ogle County Government: www.oglecountyil.gov/

Compliance Timeline and Important Dates

Annual Requirements

• License Renewal Due: June 1st each year
• Tax Filing: Quarterly (Illinois Hotel Operators Tax)
• Insurance Renewal: As per policy terms

Application Timeline

• Processing Time: Not specified, requires Planning Commission and City Council review cycles
• Planning Commission Meetings: Contact city for schedule
• City Council Meetings: Contact city for schedule

Investment Considerations for STR Operators

Market Characteristics

• Allowed Property Types: Single-family and multi-family in R-1 zones
• Owner vs. Non-Owner Occupied: Both permitted with different fee structures
• Tourism Impact: City actively supports tourism through tax collection fund

Financial Requirements

• Initial Investment: $100-$250 application fee plus insurance costs
• Annual Operating Costs: $25-$50 renewal fees plus taxes and insurance
• Tax Burden: 9% total (6% state + 3% county)

Compliance Risk Factors

• Zoning Restrictions: Limited to R-1 districts only
• Regulatory Approval: Requires both Planning Commission and City Council approval
• Safety Compliance: Stringent detector and facility requirements

This guide provides comprehensive information for investors considering short-term rental operations in Oregon, Illinois. Always verify current requirements with the city before making investment decisions, as regulations may change.