Ottawa, IL Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

The LaSalle County seat and closest full-service city to Starved Rock State Park, Illinois' most-visited state park, driving strong weekend cabin/lodge demand — but the wider 'Starved Rock area' spans multiple municipalities with sharply different STR rules, so exact location matters enormously.

Ottawa has a dedicated STR ordinance (zoning and penalty provisions) and an active tax-collection agreement with Airbnb, indicating real enforcement, though a hard cap or owner-occupancy rule was not confirmed from available sources.

Illinois State Law

State preemption: None — Illinois does not preempt local short-term rental regulation; cities and counties set their own rules, resulting in a patchwork of ordinances statewide.

Statewide rules: No statewide STR license or registry. The state's Hotel Operators' Occupation Tax (HOOT) was expanded to explicitly cover STR marketplaces (Airbnb, Vrbo, etc.), effective January 6, 2026; platforms must register with the IL Dept of Revenue to collect and remit the tax.

Taxes: State Hotel Operators' Occupation Tax of roughly 6% of 94% of gross rental receipts (a 5% tax plus a 1% tax), applying to STR platform bookings since January 6, 2026, on top of any local hotel/lodging tax.

2025–2026 legislation: HOOT expansion to STR marketplaces took effect January 6, 2026 (IL Dept of Revenue Publications FY 2025-28 and FY 2026-33).

Ottawa Rules

Governing jurisdiction: City of Ottawa (LaSalle County); note the separate Village of North Utica, also marketed as a Starved Rock-area base, has taken a much harsher enforcement stance..

• Ottawa, the LaSalle County seat and closest full-service city to Starved Rock State Park, has a dedicated short-term rental article in its municipal code (Ch. 26, Art. XI).
• The ordinance includes a zoning-of-tract provision (§26-602) and a penalties section (§26-614), indicating the city both zones for and enforces STR rules, though the full fee/cap text was not accessible during this research.
• Ottawa has collected roughly $70,000 in local hotel/lodging tax from Airbnb over five years through a direct platform tax agreement, and the city council has discussed extending similar agreements to Vrbo and other platforms.
• By contrast, the Village of North Utica — also marketed as a Starved Rock-area base — passed a 2020 ordinance effectively prohibiting Airbnb-style rentals without special approval, backed by fines up to $750 per night; the village has issued over $19,000 in fines and faced at least one lawsuit from an affected owner.
• Because 'Starved Rock' tourism spans multiple municipalities (Ottawa, Utica/North Utica, Oglesby, and unincorporated LaSalle County), STR legality and permitting differs sharply block to block — always confirm the exact taxing/zoning jurisdiction before purchase.
• Illinois' new statewide Hotel Operators' Occupation Tax applies to STR platform bookings statewide since January 6, 2026, layered on top of whatever local tax arrangement applies.

Not confirmed

We could not verify the following against a primary source. Confirm each with the jurisdiction before you rely on it:

• Ottawa's exact permit fee, cap, owner-occupancy rule, minimum stay, and occupancy limit (the full ordinance text was not accessible via public search/fetch during this research — verify directly with Ottawa city hall or the full Municode chapter before relying on any number)
• Whether unincorporated LaSalle County near Starved Rock has its own separate STR rule

Buyer Due Diligence Checklist

Before you write an offer on a short-term rental here:

• Get a written determination from the governing jurisdiction for the specific parcel. Verbal guidance from anyone else is not diligence.
• Establish which jurisdiction governs — city, town, village and unincorporated county can differ sharply within a few miles.
• Ask whether an existing permit transfers on sale. In many markets it does not, and a listing marketed as a running short-term rental may convey nothing of the sort.
• Read the HOA or condo covenants during your inspection period. Private covenants bind even where the jurisdiction permits the use.
• Model revenue against the legal occupancy cap, not the bedroom count.

Frequently Asked Questions