The City of Chicago filed suit Monday, June 23 against Airbnb and one of its highest-volume local hosts, alleging a scheme to skirt the city’s short-term rental rules across 95 Chicago listings, according to the City of Chicago’s Department of Law. The lawsuit names Airbnb itself as a co-defendant alongside real estate broker Milan Rubenstein and his company, Slumber Stay LLC.
According to the city’s complaint, as reported by WBEZ Chicago, Slumber Stay operated 156 short-term rental listings in total, 95 of them within city limits and concentrated heavily in the Near South Side. The city says Rubenstein racked up nearly 200 citations in 2024 and 2025 alone, and rather than bringing the units into compliance, allegedly kept renting them out under different host names and through a separate booking site, slumberstay.com, to avoid detection.
What the city alleges
- Listings were operated in violation of Chicago’s Shared Housing Ordinance, first passed in 2016 and strengthened in 2020, which caps how many units in a building can be rented short-term and requires each listing to be registered with the city.
- A single, nontransferable hotel license was allegedly used to cover multiple separate listings.
- Airbnb is accused of processing and facilitating bookings for units that were never properly registered or licensed, per FOX 32 Chicago’s reporting on the filing.
The city is asking the court to impose fines, force the defendants to surrender profits earned from the allegedly illegal rentals, and block them from operating any further unregistered short-term units. Mayor Brandon Johnson said in the city’s official announcement that requiring short-term rental companies to follow the same rules as everyone else is critical to the work of building a safer, more affordable Chicago. BACP Commissioner Ivan Capifali added that when a licensee chooses to operate outside of city law, it undermines the community of responsible businesses that follow the rules.
Why the ordinance exists
Chicago’s Shared Housing Ordinance was built specifically to keep residential buildings from quietly turning into unlicensed hotels or party houses, and to preserve housing stock that might otherwise get pulled out of the long-term rental market. The city’s filing frames the Rubenstein and Slumber Stay operation as an example of exactly what the ordinance was designed to prevent: a single operator running a large-scale rental business across dozens of Chicago addresses while sidestepping the registration and licensing system meant to track it.
The case adds Chicago to a growing list of cities directly targeting the platforms that host non-compliant listings, not just the hosts themselves, arguing that Airbnb bears responsibility for policing what actually gets booked through its site.
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