Additional Dwelling Unit Ordinance Predominantly Benefits the North Side, Data Shows

This is post 2 of 2 in the series “Housing Issue 2024”

1. “Just Get to Know Your Neighbors”
2. Additional Dwelling Unit Ordinance Predominantly Benefits the North Side, Data Shows

In December 2020, Chicago lifted its historic ban on accessory dwelling units, or ADUs. Commonly known as “granny flats” or “coach houses,” applications for permits to build ADUs became available across five city areas through an accompanying pilot program, which took effect in May 2021. Housing advocates have championed ADUs for years as a means to increase population density, create an additional income stream for the property owner, and increase affordable housing. When the ordinance was approved in 2020, the Lightfoot administration promised that the program would “support our most vulnerable residents and our business community.”

However, architects, housing advocates, and residents say the program has been too restrictive and has fallen short of its equity commitments. Three years after the program went into effect, only 44 percent of pre-approved applications (262 out of 601 applications) actually received a building permit authorizing the owner to begin construction on an ADU, and 94 percent (245) are in the city’s North and Northwest Sides, according to City of Chicago data and Cityscape, a real estate information platform.

Since 2021, Chicago’s Department of Housing has issued 601 ADU pre-approvals. Pre-approval applications are self-reported forms, including the address of the property, the number of ADU units the owner intends to build, and proof that the owner has notified their neighbors and ward office of their intent to build. Permits, however, require a slew of inspections and financing.

“That [disparity] worries me a little bit, because I’m wondering who they’re really using the program for,” said Bryan Hudson, Principal Architect and owner of SOMA Design Consultants, a Chicago-based architectural firm. “The South and West Sides are predominantly Black and brown. They probably need it more than the other parts of the state that are more economically well off.”

During the 1950s, Chicago was hitting its peak population—about one million more people than there is today. The 1957 zoning code, which includes a ban on ADUs, was a response to overcrowding in the city, according to Steven Vance, an urban planner and an early advocate for ADUs. In 2014, Vance founded Chicago Cityscape, which hosts an online tool that allows people to check if their address falls within the pilot areas.

When housing advocates helped pass the ordinance in 2020, the pilot program was limited to five zones—about 20 percent of the city—to test the policy. Cityscape estimates that there are 92,322 properties in Chicago eligible for the ADU program.

But even for households that fall under the pilot areas, many factors deter them from building ADUs, Vance said. Legacy parking space requirements, banks’ reluctance to finance medium-sized projects, strict design and zoning guidelines, and the high cost of connecting coach homes to utilities have prevented the program from widespread adoption.

Requirements for ADUs are also more strict in the West, South, and Southeast areas. Only two ADU permits can be issued per block per year in these zones, while there is no limit on ADU permits for the North and Northwest zones. The West, South, and Southeast areas also require that the buildings eligible for ADUs be owner-occupied and that coach houses cannot be built on vacant lots before a principal residence—restrictions that do not apply to North Side residences. According to Vance, some alderpeople added these additional restrictions in their pilot areas over concerns that ADUs would “drastically change the character of the neighborhood.”

Hudson said these restrictions created additional barriers for residents in the West, South, and Southeast Side—areas that already have more vacancy and lower residential density.

“[The] West Side and South Side of Chicago have a lot of vacant lots,” Hudson said. “If a young couple is going to come in and build, and they want to add a coach house at the rear [of] their new property, they can’t do it because two other families on the block already are there? I don’t understand.”

On the ADU expansion’s promise to improve housing access, “it’s very minimal,” said Cristina Gallo, architect and co-founder of Via Chicago Architects. “It’s not making a dent in the housing crisis.” Gallo and her firm helped build one of the first ADUs in Chicago under the pilot—a 525 square foot couch house that sits above her client’s rear garage. The main house is a $1 million brick row house in Wicker Park.

The ADU pilot program stipulates that if two or more residential units are added, every other unit must be an affordable unit, meaning the unit is limited to tenants earning 60 percent of the area’s median income. However, according to Cityscape data, the majority of property owners to whom a permit was issued built single dwelling units, thus they are not beholden to the affordable housing requirement. About one in ten dwelling units built under the ADU ordinance were affordable units.

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Income disparity and financial inequality also make it more difficult for residents on the South and West Sides to finance ADU projects, Vance said. Building ADUs can be costly—about $200,000 for a basement unit or $300,000 for a small coach house. Residents in lower-income neighborhoods typically have less access to loans and financial knowledge, Vance said.

“I am not saying that people don’t deserve it, but if the program is set up to help folks that need the help get a financial leg up, then I don’t know if I would champion somebody build[ing] an ADU in Lincoln Park,” Hudson said. “But if there’s a retired couple in Englewood [who] worked at the post office for years, and they have medical bills, being able to rent that [ADU] unit can help offset some regular cost of living.”

While the city initially offered financial support for ADU projects through a grant program, it was only enough to cover some consultation or design costs, and the fund has since run out, according to the program website.

Hericelda Montiel de Salgado, a mother of five children in Little Village, wanted to renovate her house’s attic into a residential unit so their oldest children could live there. The city requires ADUs to have two exits so Salgado applied for a permit to construct a second exit in the attic. About three years later, she still hasn’t been able to put in that second exit. The fund was available when she first started applying for the ADU permit two years ago, but the inspection process dragged on due to lack of architects to complete the inspection. By the time she received approval, the fund was discontinued.

“I think that us – being low income – the funds run out fast. I think they help people who aren’t as in need as us, who can pay for what they have to do, and for us, they take too long.” Salgado said.

According to CityScape, the average city-wide processing time from application to permit issuance was about 120 days, or four months.

Salgado and her family have lived in Little Village since 1995, but with rising property taxes, she feared she would have to relocate. “Because our community is very impacted financially…we [c]ould lose our house,” she said. “Having an additional legal unit—the property value would go up a bit and that would help us.”

Simone Alexander, a member of Únete La Villita, an affordable housing advocacy group in Little Village who helped Salgado’s case, suggested that increasing homeowner assistance funds and adding dedicated staff to facilitate the program could help the city use ADUs as a tool to address gentrification and displacement in her community.

“If low- to moderate- homeowners are unable to fully benefit, then it will be upper-income homeowners and developers who will create the majority of new ADUs,” Alexander said.

Gallo said regional restrictions on ADUs should be removed so that vulnerable populations can truly benefit from the program. For example, residents in the West, South, and Southeast regions should be allowed to construct ADUs on vacant lots, which are predominantly located in those areas.

“If you’re already paying for costly land and you can afford to build 500 to 1000 square feet, but no more than that, [you should have] the option to build an ADU towards the rear of the lot and leave the front of the lot vacant for future opportunities into expanding building,” Gallo said. “That is an entry into home ownership, which is an entry into increasing your wealth and laying roots in your own community. It’s really empowering.”

Monica Chadha, architect and founder of Civic Projects Architecture in Woodlawn, said she has received many inquiries about ADUs but had to turn people away either because they live outside the pilot areas or because their requests are not allowed under the current guidelines.

“Not all the parameters work right now,” Chadha said. “But the ability to legalize the additional unit or provide that extra living? You have multi-generational opportunities, caregiving opportunities, and additional income opportunities. The promise of being able to have additional space is fabulous.”

She hopes the ADU program will soon expand citywide so that it can address development issues on the South Side, where the lack of residential density hampers the attraction of commercial and community services.

On July 16, the Zoning Committee discussed a proposal to expand the program citywide and loosen some of the current requirements such as a parking requirement and cap on floor area to 700 sq ft, which would make ADU construction more affordable. However, the vote has been delayed. While Mayor Brandon Johnson and his allies are pushing to allow ADUs to be built in single-family districts without needing City Hall approval, some other City Council members are unwilling to give up some level of control and want ADU applicants to receive a special use permit from the city’s Zoning Board of Appeals. That disagreement could jeopardize the program’s potential expansion and reform, leading to more situations like Salgado’s.

“We feel frustrated that [my children] can’t live upstairs because the city requires us to have two exits,” Salgado said. “We all feel frustrated because we thought it would be faster, but it’s been three years.”

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Xuandi Wang is a journalist and policy researcher whose writing has appeared in Block Club, the Chicago Reader, In These Times, and elsewhere.