Chicago has sued Airbnb and a prolific host, alleging the host violated the city’s short-term rental rules more than 200 times between 2024 and 2025 and that the platform failed to stop unlawful listings.
The lawsuit, filed Monday, names host Milan Rubenstein and alleges Airbnb deliberately failed to bar illegal rentals, allegedly "prioritizing profit over compliance with city law", a city press release stated.
According to the filing, the city wants both Airbnb and Rubenstein to give up profits tied to the allegedly illegal rentals. The suit says that in March and April, Rubenstein rented more than 500 unregistered units that generated more than $1 million in booking value each month.
Rubenstein’s company, SlumberStay, operates in Chicago, Nashville and Phoenix. The lawsuit says Rubenstein at one point owned more than 740 Chicago-area apartment units, including several properties in the South Loop.
The filing also describes a 344-unit, multi-building apartment complex in Mount Prospect that previously had multiple owners. It says Rubenstein bought the parcels piecemeal between 2010 and 2014 for $24.4 million total, then sold the property later in 2014 for $33 million.
Alleged misuse of hotel license
The lawsuit says Rubenstein obtained a hotel license in 2021 for a high-rise at 2036 South Michigan Avenue that he owns and operates as a furnished, short-term rental property. But instead of registering other properties individually, as required by the city’s short-term rental ordinance, he allegedly used that hotel license number as the registration number for units across Chicago.
As of April, 167 units were tied to that hotel license number even though they were spread across the city, according to the lawsuit.
Chicago passed its short-term rental ordinance in 2016 to create uniform standards for hosts, limit rentals’ effect on the housing market, and address safety concerns for guests. The rules include bans on properties with excessive local code violations, safety requirements such as smoke and carbon monoxide detectors, occupancy limits, host contact information on registrations, registration fees and annual renewals, and the possibility that registration can be revoked for "egregious conditions" such as drug trafficking, gang activity or violent acts. The ordinance also includes nondiscrimination requirements against guests and public disclosure of wheelchair accessibility or inaccessibility.
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Claims against Airbnb
The city’s lawsuit alleges Airbnb continued to carry noncompliant listings and collect fees from them. It also says the company gave the city incomplete rental activity data and declined to use a city-built data platform designed to compare Airbnb listings with city registrations.
According to the filing, Airbnb also refused to provide information about hosts and specific addresses that the city said would help identify noncompliant properties. The lawsuit says city officials met several times with Airbnb representatives in 2024 and 2025 to improve enforcement, but the company repeatedly refused to use the city’s data portal to verify registered addresses.
Under the ordinance, booking platforms are required to submit monthly rental data to the city and are barred from listing units that are not properly registered.
Rubenstein and representatives of Airbnb did not immediately respond to requests for comment.
What the city is seeking
Chicago is asking a judge to require Rubenstein to properly register all of his units and to bar Airbnb from listing unregistered units. The suit also seeks fines of $3,000 and $10,000 per day for ordinance violations against both Rubenstein and Airbnb.
The lawsuit says that if the city succeeds, holding Airbnb accountable will help Chicago work with the platform in the future to address other problem hosts, as it has with other booking platforms.
In any given month, Chicago has roughly 5,000 to 6,000 units available to rent on Airbnb, according to the filing. Founded in 2008, Airbnb has grown into a multi-billion dollar enterprise that reportedly processed $9.3 billion in bookings in 2025.