Lawmakers rethink the ADU ordinance as advocates cast doubts on its ability to generate affordable housing

Mayor Lori Lightfoot introduced this ordinance in May of this year. (Kari Lydersen/MEDILL)

By Yilun Cheng
Medill Reports

Proponents of Chicago’s proposed accessory dwelling units (ADU) ordinance –– highly anticipated legislation introduced earlier this year to reverse the longtime ban on an entire category of housing –– are struggling to move it forward as critics grow skeptical of its promise to deliver affordable housing.

Mayor Lori Lightfoot, with the support of five North Side aldermen, in May introduced an ordinance to re-legalize coach houses, basement apartments, and other accessory units banned in 1957 by a zoning code rewrite.

The proposal came after a well-organized push from the Urban Land Institute that brought together city officials, housing advocates, and real estate developers around the premise that legalizing ADUs will help alleviate Chicago’s 116,000-unit affordable housing shortage. But after receiving criticism from all sides at a July subject matter hearing, lawmakers are now considering abandoning the city-wide initiative in favor of a narrower pilot approach.

“It became clear that it would be a struggle to get broad support for an ordinance that applies across the city,” said Alderman Matt Martin (47th), one of the ordinance’s sponsors. “So what is currently under consideration is an approach whereby there would be multiple pilots in different parts of the city that would legalize accessory dwelling units.”

An “affordable housing ordinance”?

With 333,000 low-income households but only 217,000 affordable housing units, Chicago has a rental affordability gap of approximately 116,000 units, according to the latest report by DePaul’s Institute for Housing Studies, based on the most recent available census data.

While ADU typically stands for “accessory dwelling units,” the proposed ordinance interprets it as “affordable dwelling units,” making clear that its primary purpose is to “preserve and expand available affordable housing in the city.”

After Mayor Lightfoot unveiled the proposal in May, however, longtime supporters of ADU’s legalization grew suspicious of the ordinance’s intention.

“We got very, very stressed out because the ordinance that was supposed to create affordable housing for working families, after we read it, we didn’t get that impression that it was going to do that,” said Diane Limas, the board president of housing activism group Communities United and a leading advocate for ADU legalization.

The ordinance requires that property owners shall make one unit affordable –– to households making 60% of the area median income (AMI) –– for every two ADUs that they build.

“But what developer is going to do that?” Limas asked. “They can just build one [ADU] and have it at whatever price they want.”

Developers are indeed less than thrilled to volunteer their properties to accommodate the city’s low-income families. Marty Cerny, who has been in the real estate industry for almost two decades and serves as the president of nonprofit Housing Plus, said it would be unprofitable for landlords to build any ADU that would trigger the affordability requirement.

“Among the brain dead aspects [of the ordinance] was the disregard for the cost of construction materials, which have soared with Trump’s tariffs and COVID-19,” Cerny said. “Rising costs means that limiting rents at 60% AMI, somewhat doable just two years ago, is now problematic for participating owners.”

Alderman Martin conceded that the ordinance, despite having the word “affordable” in its title, will only have a modest effect on affordable housing.

“We’re not talking about tens of thousands of units of new housing, whether it’s market-rate or affordable, coming online,” said the ordinance’s sponsor. “We’re talking about maybe dozens or hundreds every year, so it’s modest.”

The city housing department declined to comment on the ordinance.

Vulnerable renters at risk of displacement

Mayor Lori Lightfoot introduced this ordinance in May of this year. (Kari Lydersen/MEDILL)

Advocates also worry that if ADUs are legalized, it would give landlords an excuse to raise the rent for existing ADUs that are currently operating illegally.

The affordability requirement mandates that a three-person household, for example, would pay no more than $1,200 monthly rent. But such a price is still significantly higher than what some basement unit tenants are paying right now, which, according to Limas, ranges from approximately $300 to $600 in Albany Park, where Communities United is based.

Organizers once asked renters of illegal basement units why they chose to live in a place where they always had to worry about mold outbreaks, flooding, low pipes, and poor ventilation.

“They said if they weren’t living there, they would be homeless,” Limas recalled. “They’re living there because they have nowhere else.”

As such, the lack of anti-displacement measures is another reason why she has turned her back on the proposal. “We were afraid that this ordinance was going to have the opposite effect of what we wanted,” she said.

Martin, who is in regular discussion with the Department of Housing about what a substitute ordinance would look like, suspects that the new draft might not add any provision that directly tackles the problem of displacement.

“I think the displacement issue is a very important one, but I think it’s important in part because it extends far beyond the scope of our conversation about ADUs,” Martin said. “It’s possible that this ordinance won’t directly address all of the displacement concerns.”

A pilot approach may leave out parts of the South Side

Now that lawmakers are leaning toward a pilot approach, the ordinance will have an even harder time delivering on its promise of affordable housing since it will likely exclude a sizable portion of the city, especially on the South Side where affordable housing is needed.

DePaul’s Institute for Housing Studies found that Chicago’s affordable housing shortage disproportionately affects families living in a cluster of South Side neighborhoods, including Hyde Park, South Shore, Woodlawn, and Washington Park. It, therefore, seems like a missed opportunity that the North Side-led ADU proposal has attracted minimal interests from the South Side, according to the ordinance’s critics.

Patrick Thompson (11th), David Moore (17th), and Pat Dowell (3rd) – three of the few South Side aldermen who attended the July hearing – all expressed reservations about legalizing ADUs.

“When you’re buying a home, which for most of us is the single largest investment, you’re buying into a community where you know what the other properties are on the block,” Thompson said at the hearing. “And this completely transforms that.”

“The ward that I represent is already densely populated,” Alderman Leslie Hairston (5th) said during an interview. She highlighted the large number of low-income residents and recipients of subsidized Section 8 housing vouchers already living in her ward, which covers parts of Hyde Park, South Shore, and Woodlawn. Hesitant to further increase the residential density of her neighborhoods, she said she would have to conduct extensive research before considering participating in a pilot project.

Several aldermen disclosed that a substitute ordinance, which would outline the pilots, is still in its preliminary phase. As a result, even though some had hoped earlier this year that ADUs would have been legalized by August, property owners will likely have to wait until next year to find out if they are allowed to rent out their basement or build a coach house in their backyard.

“I’m hopeful we will vote in favor of a substitute ordinance by the end of the year,” Martin said. “But it’s very possible that it will happen next year, not this year.”