2023 IL App (1st) 221705-U
No. 1-22-1705
Order filed October 20, 2023
FIFTH DIVISION
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT
JOSH HENDERSON, ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County. ) v. ) No. 21 CH 05932 ) CITY OF CHICAGO DEPARTMENT OF ) Hon. Anna M. Loftus, BUSINESS AFFAIRS AND CONSUMER ) Judge presiding. PROTECTION and MAYOR’S LICENSE ) DISCIPLINE COMMISSION, ) ) Defendants-Appellees. )
PRESIDING JUSTICE MITCHELL delivered the judgment of the court. Justice Mikva and Justice Lyle concurred in the judgment.
ORDER
¶1 Held: The commissioner of the Department of Business Affairs and Consumer Protection did not commit clear error by denying plaintiff a commissioner’s adjustment to register two shared housing units, and the commissioner’s failure to tender the final decision within the time provided by the ordinance did not render the decision invalid.
¶2 Josh Henderson, pro se, appeals the Department of Business Affairs and Consumer
Protection commissioner’s denial of his application for a commissioner’s adjustment to allow for
two additional shared housing units within a four-unit residential building. Henderson raises the No. 1-22-1705
following issues: (i) whether the commissioner clearly erred in denying his application for an
adjustment because the hearing officer improperly weighed the evidence presented; (ii) whether
the delay in tendering the commissioner’s report renders the decision void; (iii) whether Chicago
Municipal Code Section 4-14-100 is unconstitutionally vague, an unconstitutional invasion of
privacy, and an unreasonable property seizure; and (iv) whether Chicago Municipal Code Section
4-14-60(g) unconstitutionally levies excessive fines and authorizes warrantless searches. We
affirm.
¶3 I. BACKGROUND
¶4 Josh Henderson owns two multi-unit properties in Chicago, one in which he lives, and the
other, which is the subject of this appeal, at 1151 W. Waveland Avenue. Henderson applied to
register unit 1 of 1151 W. Waveland as a “shared housing unit” with the Department of Business
Affairs and Consumer Protection, so he could list it as a short-term rental on Airbnb. The
commissioner of the Department denied Henderson’s application because the Chicago Municipal
Code prohibits registering shared housing units that are not the host’s primary residence.
Henderson applied for a commissioner’s adjustment, which requires a petitioner to demonstrate
that the unit will alleviate an extraordinary burden predicated on unique and unusual
circumstances. Citing lost costs and rents lingering from the COVID-19 pandemic, Henderson
received a commissioner’s adjustment as to unit 1 and was permitted to list the unit as an Airbnb.
¶5 After receiving the adjustment, Henderson then applied to register two more units at 1151
W. Waveland, unit 2 and the garden unit. The commissioner denied these applications, and
Henderson again applied for commissioner’s adjustments as to both, presenting largely the same
evidence of the lingering effects of COVID-19 on his business. The commissioner denied these
adjustments, and Henderson appealed to the Mayor’s Licensing Discipline Commission. After a
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hearing, the commissioner affirmed the denials, finding Henderson had not demonstrated unique
and unusual circumstances that created an extraordinary burden the adjustment would remedy.
¶6 Henderson sought administrative review from the circuit court. Henderson argued that
because he presented identical evidence for all three applications, the decision to deny his latter
applications where his former was granted demonstrates that the ordinance conferring authority
upon the commissioner to make such determinations is unconstitutionally vague and leads to
arbitrary results. Henderson also challenges the commissioner’s weighing of the evidence and
alleges that the commissioner tendered the decision 14 days later than prescribed by the ordinance,
in violation of his constitutional rights. The circuit court affirmed the commissioner’s decision.
Henderson timely appealed. Ill. S. Ct. R. 303 (eff. July 1, 2017).
¶7 II. ANALYSIS
¶8 Henderson provides much in the way of argument yet little in the way of supporting legal
authority. Between the two briefs Henderson submitted, there appears to be only a single citation
to case law: Grayned v. City of Rockford, 408 U.S. 104 (1972). Henderson cites the Supreme
Court’s policy considerations for voiding an unconstitutionally vague statute. Otherwise,
Henderson argues multiple provisions of the Chicago Municipal Code violate state and federal
constitutions, with reference to specific sections, but without supporting law or legal analysis.
Henderson also asserts that his fourteenth amendment due process rights were violated when the
hearing officer improperly relied on specific evidence in making her determination, and that the
commissioner submitted the final decision 44 days after the hearing, in violation of Chicago
Municipal Code section 4-14-100(c), and the state and federal constitutions. U.S. Const., amend.
XIV; Ill. Const. 1970, art. I, § 2.
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¶9 The City contends that this appeal should be dismissed for Henderson’s failure to cite legal
authority. Ill. S. Ct. R. 341(h)(7). Alternatively, the City argues that Henderson’s constitutional
claims must fail for lack of standing. On the merits, the City argues that the commissioner’s denial
of Henderson’s application was not clearly erroneous, because the commissioner properly
determined an adjustment was not warranted, and the late tendering of the decision is not a basis
for reversal.
¶ 10 Section 4-14 of the Chicago Municipal Code concerns shared housing units, defined in the
code as small dwelling units rented for transient occupancy (e.g., Airbnbs). Chicago Municipal
Code § 4-14-010 (amended May 25, 2022). Section 4-14-060(e) makes it unlawful to advertise or
rent a shared housing unit in a two-to-four unit building unless such unit is the host’s primary
residence. Chicago Municipal Code § 4-14-060(e) (amended March 24, 2021). This primary
residence rule will not apply to bar a host from listing or renting their unit if they apply for and
receive a commissioner’s adjustment as provided for in Section 4-14-100. Chicago Municipal
Code § 4-14-100 (added June 22, 2016). If a host’s application is denied, they may request a
hearing to present “written submissions, witness testimony, argument, and documents regarding
the application.” § 4-14-100(c). The commissioner reviews applications for adjustments
considering many factors, nine of which are listed in the ordinance “by way of example and not
limitation.” § 4-14-100(a)(2). Factors may include the number of units in the building subject to
the adjustment, the degree the adjustment varies from the prevailing statutory limitations, and
economic hardship to the applicant resulting from denial. Id. An adjustment may only be approved
if the commissioner concludes that it would “eliminate an extraordinary burden on the applicant
in light of unique and unusual circumstances,” and the shared housing unit “would not
detrimentally impact the health, safety, or general welfare of the surrounding property owners or
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general public.” Id. The commissioner is directed to provide a decision within 30 days of the
conclusion of the hearing, which is final for purposes of judicial review. § 4-14-100(c). Section 4-
14-030(c) provides that shared housing units deemed ineligible must be removed from listing
platforms, like Airbnb, and failure to comply will result in a fine of $5000 per occurrence, where
each day of noncompliance constitutes an occurrence. Chicago Municipal Code § 4-14-030(c)
(amended March 24, 2021).
¶ 11 If the statute conferring power on an administrative agency adopts the Illinois
Administrative Review Law, its provisions govern every action to review that agency’s decisions.
Dubin v. Personnel Board of City of Chicago, 128 Ill. 2d 490, 497 (1989). Section 4-14 of the
Chicago Municipal Code does not adopt nor incorporate the Administrative Review Law, and
therefore parties may seek administrative review through a writ of certiorari in the circuit court.
Id. at 498. Though styled as a complaint for administrative review, the circuit court treated
Henderson’s pleading as the appropriate writ of certiorari.
¶ 12 Review under a writ of certiorari are virtually the same as under the Administrative
Review Law, and we therefore review the determination of the agency, and not the circuit court
below. Id.; Landers v. Chicago Housing Authority, 404 Ill. App. 3d 568, 571 (2010). The burden
of proof is on the plaintiff in administrative proceedings. Marconi v. Chicago Heights Police
Pension Board, 225 Ill. 2d 497, 532-33 (2006). The applicable standard of review on appeal
depends on whether the question presented is one of law, fact, or a mixed question of both law and
fact. AFM Messenger Service, Inc. v. Department of Employment Security, 198 Ill. 2d 380, 390
(2001). The commissioner’s factual findings are deemed prima facie true and correct and will not
be overturned unless they are against the manifest weight of the evidence. Cinkus v. Village of
Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 210 (2008). Questions of law are
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reviewed de novo, and mixed questions of fact and law are reviewed under a clearly erroneous
standard. Id. at 210-11. A decision is clearly erroneous when the reviewing court is “left with the
definite and firm conviction that a mistake has been committed.” (Internal quotation marks
omitted.) Id. at 211 (quoting AFM Messenger, 198 Ill. 2d at 395). This appeal presents a mixed
question of fact and law, where the issue is whether the rule of law was properly applied to the
established facts. Cinkus, 228 Ill. 2d at 211.
¶ 13 Henderson argues that the commissioner improperly relied on certain evidence in denying
his application. In paragraph 7 of the report, the commissioner found that Henderson had failed to
establish the requisite unique or unusual circumstances necessary to qualify for an adjustment. In
support of this finding, the commissioner referenced evidence Henderson presented of businesses,
restaurants, and hotels in the vicinity of the 1151 W. Waveland property which created a greater
burden on the neighborhood than his Airbnbs. The commissioner also referenced Henderson’s
testimony regarding a new construction in the area creating a burden on the neighborhood. Lastly,
the commissioner relied on Henderson’s testimony that he was not opposed to long-term rentals
in the subject units. The commissioner’s decision was based on the “totality of the exhibits and
arguments” presented at the hearing.
¶ 14 Henderson asserts that the evidence referenced in paragraph 7 was not presented to
establish the financial burden factor, even though, he claims, that was the only basis for the denial
of his application. Henderson argues that the commissioner’s declaration that the “totality” of the
evidence supports the conclusion is no replacement for a specific recitation of what evidence
actually underlies the decision.
¶ 15 Henderson’s argument assumes that the commissioner was required to address each
individual factor listed in the adjustment provision and refute the evidence presented as to each
6 No. 1-22-1705
factor independently. In reality, this section provides factors the commissioner “may consider,”
which are included “by way of example and not limitation.” (Emphasis added.) § 4-14-100(a)(2).
The commissioner is not required to consider every factor and may consider additional factors
raised by the evidence before her on the particular facts of the case. The ordinance provides the
primary question for the commissioner to consider:
“Such an adjustment may be approved only if, based on a review of relevant factors,
the commissioner concludes that such an adjustment would eliminate an extraordinary
burden on the applicant in light of unique or unusual circumstances and would not
detrimentally impact the health, safety, or general welfare of surrounding property owners
or the general public.” Id.
It was appropriate for the commissioner to consider evidence of the neighborhood’s condition in
coming to this conclusion. The commissioner’s determination that Henderson did not establish
unique or unusual circumstances was not clearly erroneous on the facts presented in paragraph 7.
To the extent Henderson seeks a specific explanation that addresses the financial hardship factor,
he need only look to paragraph 6 of the report, where the commissioner concluded that “acquiring
equity, lost rent, tenants failing to pay, building maintenance, and lost revenue are ordinary and
regular considerations and did not constitute unique or unusual circumstances[.]” It was within the
commissioner’s discretion to deny Henderson’s application on any and all of the evidence
presented, and the decision to do so was not clearly erroneous.
¶ 16 Henderson argues that considering testimony directed at one factor when adjudicating a
different factor deprived him of procedural due process under the fourteenth amendment. U.S.
Const., amend. XIV. To comport with procedural due process, administrative proceedings must
provide a party with “a meaningful procedure to assert his claim before the deprivation or
7 No. 1-22-1705
impairment of a property right.” Snow v. Chicago Transit Authority, 2022 IL App (1st) 201217,
¶ 54 (citing Mathews v. Eldridge, 424 U.S. 319, 348-49 (1976)). A court will not find a deprivation
of procedural due process absent a showing of substantial prejudice. See Stratton v. Wenona
Community Unit District No. 1, 133 Ill. 2d 413, 435 (1990). Henderson fully presented evidence
to support his claim before the commissioner; due process does not require the commissioner
weigh that evidence favorably to the petitioner, or even in the manner he would prefer. Henderson
received all the procedural due process to which he was entitled.
¶ 17 Henderson next argues that the commissioner violated the adjustment provision when the
final decision was released 44 days after the hearing, instead of 30 days, as specified in the
ordinance. Pertinent here is the phrase “The commissioner shall, within thirty days of the
conclusion of the hearing, tender a decision ***.” (Emphasis added) § 4-14-100(c). As the circuit
court correctly noted, wherever the term “shall” appears in Title 4 of the Chicago Municipal Code,
it is to be “construed as merely directory rather than mandatory.” Chicago Municipal Code § 4-
14-280(b). The distinction between mandatory and directory statutory language “simply denotes
whether the failure to comply with a particular procedural step will or will not have the effect of
invalidating the governmental action to which the procedural requirement relates.” (Internal
quotation marks omitted.) In re M.I., 2013 IL 113776, ¶ 16 (quoting People v. Robinson, 217 Ill. 2d
43, 51-52 (2005)). Section 4-4-280(b) further states that failure to comply with such directory
language will not “result in any loss of jurisdiction by the Commissioner.” § 4-4-280(b). Therefore,
the commissioner’s failure to tender the final decision within 30 days does not necessitate reversal.
¶ 18 The foregoing issues are dispositive of this appeal. However, Henderson also challenged
the constitutionality of the relevant ordinances for the first time in his writ of certiorari before the
circuit court. Generally, issues or defenses not raised before the administrative agency will not be
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considered for the first time on administrative review. Carpetland U.S.A., Inc. v. Illinois
Department of Employment Security, 201 Ill. 2d 351, 396-97 (2002). Though an administrative
agency lacks the authority to invalidate a statute on constitutional grounds or question its validity,
asserting such a challenge on the record provides all parties an opportunity to present evidence to
support or refute the challenge. Texaco-Cities Service Pipeline Co. v. McGaw, 182 Ill. 2d 262,
278-79 (1998). Administrative review is confined to the evidence offered before the agency, and
therefore a party’s right to question the validity of a statute is subject to forfeiture if such a right is
not exercised during the administrative proceedings. Carpetland, 201 Ill. 2d at 397. Henderson’s
claims are forfeit for not being raised in the administrative proceedings. Nevertheless, we briefly
address each in turn.
¶ 19 Henderson argues that the adjustment provision and the provision setting fines are
unconstitutional. § 4-14-100; Chicago Municipal Code § 4-14-30(c) 1. Specifically, Henderson
claims the adjustment provision is unconstitutional for three reasons: (i) the provision fails to
clarify what qualifies as a financial burden, rendering the provision unconstitutionally vague and
open to arbitrary enforcement; (ii) the requirement to demonstrate a financial burden works an
unconstitutional invasion of an applicant’s privacy by implying a need to share sensitive and
personal information; and (iii) the denial of his application would result in his losing equitable
interest in his property, which he claims is an unreasonable property seizure. Henderson argues
that the fine provision is unconstitutional because it imposes excessive fines in violation of state
and federal constitutions. U.S. Const., amend. VIII; Ill. Const. 1970, art. I, § 6. The City argues in
response that Henderson lacks standing to bring these constitutional claims because even if he
1 Henderson cites this provision as Section 4-14-060(g), though his argument makes clear he intends to challenge the provision in Section 4-14-030(c). Section 4-14-060(g) was removed in 2020 by the Chicago City Council, and its provisions concerning penalty fines are now found in Section 4-14-030(c). Chi. City Clerk J. Proc. 20303, 20307 (September 9, 2020). 9 No. 1-22-1705
were successful in striking the challenged provisions, the primary residence rule would bar the
relief he seeks: approval of his shared housing unit registration.
¶ 20 To establish standing in Illinois, a party must claim an injury that is “(i) distinct and
palpable; (ii) fairly traceable to the defendant’s actions; and (iii) substantially likely to be prevented
or redressed by the grant of the requested relief.” Glisson v. City of Marion, 188 Ill. 2d 211, 221
(1999). This court has previously considered standing based on the provisions at issue here. See
Mendez v. City of Chicago, 2023 IL App (1st) 211513. In Mendez, the plaintiffs made similar
arguments challenging the constitutionality of the adjustment provision on vagueness grounds. Id.
¶ 4. Specifically, like Henderson, the plaintiffs contended that the criteria in the ordinance provided
no objective guidance to the commissioner when granting adjustments. Id. ¶ 22. In examining the
ordinance and its legislative history in detail, Mendez concluded that the primary residence rule is
severable from the adjustment provision. Id. ¶ 27 (“[T]he primary residence rule and its narrow
exception are not so mutually connected *** that the city would not have passed the former without
the latter. [Citations.] In short, they are severable.”). As a result, even if those plaintiffs, and
Henderson here, succeeded in striking the challenged provisions, the provision preventing them
from obtaining relief would remain. Id. (citing Village of Chatham v. County of Sangamon, 216
Ill. 2d 402, 423 (2005)). Because Henderson’s claimed injury cannot “be prevented or redressed
by the grant of the requested relief,” he lacks standing to bring his constitutional challenges to the
ordinances. Glisson, 188 Ill. 2d at 221.
¶ 21 Henderson claims the primary residence rule is satisfied because he lives next door to the
subject property, but Henderson misinterprets the factor which addresses the degree to which the
sought adjustment “varies from the prevailing limitations.” § 4-14-100(a)(2). The prevailing
limitations are the statutory restrictions imposed by the Code; in this case, the limit on the number
10 No. 1-22-1705
of shared housing units in a building that is not one’s primary residence. For a two-to-four-unit
building, that limitation is zero, meaning that without an adjustment, a host is allowed zero shared
housing units. Henderson’s first application sought an adjustment that varied from that prevailing
limitation by one. On the facts presented, the commissioner concluded Henderson had presented
evidence of unique and unusual circumstances sufficient to justify a deviation from the limitation,
zero to one. On his subsequent applications, because he had already been granted an adjustment,
Henderson’s sought adjustments substantially varied from the prevailing limitation, allowing three
units where the limit was zero. Moreover, the ordinance defines a primary residence as “the
dwelling where a person lives on a daily basis at least 245 days in the applicable calendar year.”
§ 4-14-010. As Henderson emphasizes that he does not live at 1151 W. Waveland and instead lives
next door, the subject property is not his primary residence, and in the absence of an adjustment,
he is not permitted the shared housing units he seeks to register.
¶ 22 Henderson also raises a facial challenge against the adjustment provision, arguing its lack
of delineated numerical guidelines, and the implication that businesses may need to provide
sensitive or personal information to demonstrate a financial burden, violate the privacy clause of
the Illinois Constitution. Ill. Const. 1970, art. I, § 6. The decision to include or omit numerical
guidelines is a legislative decision made by the Chicago City Council. Henderson does not explain
what, if any, documents or information he considers too intrusive to have provided to the
commissioner, and the ordinance does not require applicants to provide any documentation at all.
The petitioner bears the burden of proof and may choose to support their application with whatever
documents they wish. Marconi, 225 Ill. 2d at 532. An ordinance is only facially unconstitutional
if no circumstances exist where it may be valid, Napleton v. Village of Hinsdale, 229 Ill. 2d 296,
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306 (2008), and Henderson has not carried the burden of establishing the ordinance is
unconstitutional even as applied to him.
¶ 23 Henderson next argues that the adjustment provision is unconstitutional, as applied,
because the denial of his application would result in his losing equity in the property, constituting
an unreasonable property seizure under state and federal constitutions. Ill. Const. 1970, art. I, § 6;
U.S. Const., amend. XIV. “[T]he privilege of every citizen to use his property according to his
own will is both a liberty and a property right.” Napleton, 229 Ill. 2d at 310 (quoting Western
Theological Seminary v. City of Evanston, 325 Ill. 511, 521 (1927)). However, such a right gives
way to the local exercise of police power in enacting restrictions for the protection of the “health,
comfort, safety, and welfare of society.” Id. (quoting Booth v. People, 186 Ill. 43, 48-49 (1900)).
A city’s exercise of its police power in this way is subject to rational basis scrutiny. Id. at 315.
Henderson’s right to use his property as he wishes, including his right to earn and retain equity,
are therefore subject to regulations rationally related to a legitimate purpose. Id. at 314; see also
Hannifin Corp. v. City of Berwyn, 1 Ill. 2d 28, 35 (1953). Because the ordinance works to limit the
number of shared housing units in the city to reduce the burden or nuisance they may impose upon
neighboring residents, and the ordinance is a rational means to achieve that end, the denial of
Henderson’s application for a commissioner’s adjustment did not violate his constitutional rights.
¶ 24 Henderson claims that the $5000 fines for not removing unregistered rental listings are
disproportionate to the offense and therefore violate the federal constitution. U.S. Const., amend.
VIII; § 4-14-030(c). Henderson presented no evidence before the commissioner that he had ever
been fined under this provision, and therefore lacks standing to bring the challenge. Glisson, 188
Ill. 2d at 221 (“[S]tanding requires some injury in fact to a legally cognizable interest ***.”).
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¶ 25 Henderson’s final constitutional contention is that efforts by the commissioner and the
department to discover noncompliant rental listings constitute warrantless searches. Ill. Const.
1970, art. I, § 6. Henderson does not cite any ordinance and does not allege he has been the target
of any warrantless searches, but alleges that, to enforce section 4-14, municipal employees would
be required to conduct electronic searches to locate offending listings. Because Henderson seems
to be challenging the constitutionality of the Department’s method of enforcing the ordinance, and
that method, whatever it may be, is not before us on this appeal, this argument is forfeited.
¶ 26 III. CONCLUSION
¶ 27 For the foregoing reasons, the decision of the commissioner of the Department of Business
Affairs and Consumer Protection is affirmed.
¶ 28 Affirmed.