Chicago Has A Housing Crisis. They Need to Change How They Permit and How They Build
Currently, the city of Chicago has a housing shortage. According to Illinois Policy, the Chicago faces a housing shortage of 120,000 units and rental shortage of 240,000 units. Just this past week, Alderman Brian Hopkins of the 2nd Ward (Old Town & Gold Coast) released a statement saying that he was against a new development at the corner of Wells St. and North Avenue, which would bring roughly 500 units (100 of which would be affordable units) to the neighborhood. This is an extremely short-sighted decision by Alderman Hopkins.
But he’s not the only one. Last year, Alderman Scott Waguespack of the 32nd ward (Lakeview & Lincoln Park), voiced opposition for development of 2 residential buildings on Marcey Street (adjacent to Clybourn) that would’ve brought over 600 housing units (120 affordable) to Lincoln Park. Now that project may still survive, but alderman need to re-frame their thinking around housing, and how it gets built.
So let’s take a look at some changes Chicago can make today that can help address it’s housing crisis.
Approve Developments That Are Already in Front of the Zoning Board
Build baby build. The easiest way to increase the housing supply is to green light developments that are getting ready to go. And while it’s important to consider environmental impacts, we can not let these studies takes years, delaying construction. We need to fast-track these developments.
Change & Expedite Existing Zoning Laws
Currently, most of the land in Chicago is zoned for single-family homes. This needs to be amended. Changing zoning laws to allow more multi-family homes to be built can increase the city’s tax base (both income and property), increase density (needed for a city to thrive), and it creates a sense of community. Its more people to shop at local businesses and eat at local restaurants.
The speed at which new permits are issued, and how long (and expensive) it is to build in the city is a major roadblock. City Hall needs to make this more efficient immediately.
Single Stair Reform
What is single stair reform? Currently, with few exceptions (Honolulu, NYC, Seattle), U.S. codes don’t allow single-stair apartments above 3 floors. U.S. fire codes often require buildings over 3 floors to have two stairwells, forcing designs with long hallways and less efficient floorplans. This makes apartments less appealing and harder to build affordably. Meanwhile, Europe, South America, and Asia allow 6+ stories with single exits. Countries like South Korea even go as high as 20+ stories safely. By working with fire marshals to reform these building codes & laws, we can enable more units to built more affordably in buildings, because the switch has the potential to remove the long hallways that are often in these buildings. In short, it allows more space on a floorplan to be built for housing units.
Limit New Construction of Single-Family Homes on Existing Lots that have a Multi-Family Unit still standing, or was previously there
Two to four-unit residential buildings make up 26% of all residential units in the City of Chicago. Ten years ago they accounted for about 38%. In the last decade, Chicago has lost 4,800 2 to 4-unit buildings accounting for 11,775 housing units.
Now this one is very applicable to Lincoln Park and other North side neighborhoods. 61% of all 2-4 unit buildings lost between 2013-2019 were in high-cost areas, primarily in North and Northwest Side neighborhoods. 77% of the 2-4s in these areas were converted to single-family use.
All across the neighborhood, multi-family homes (or lots) are being torn-down and replaced by single-family homes. Long term, this is devastating to neighborhoods and communities. Building single family homes in lieu of multi-family units pushes prices higher (and it’s currently approaching unaffordable in the city) and is the least efficient use of land. It also can lead to more isolation within individuals,
Increase Tax Incentives For Affordable Housing
Currently, there are tax incentives for new construction that offer affordable housing, both through the Illinois Housing Development Authority and U.S. Department of Housing and Urban Development (HUD). Chicago needs to be soliciting developers to build using these tax benefits, increasing both the housing supply and affordable housing supply.
Increase Tax Incentives For Converting Commercial To Residential
As of October 2024, the vacancy rate of commercial space in The Loop was 25.8%. That is an all-time high. Rather than developers building new units, the city should solicit business that can use its existing space and offer housing, at a lower cost. Work with the developers to cut the red tape, making this a more attractive option that having to build all new buildings.
Offer Additional Tax Incentives For Developments and Re-Developments In Lower Income Areas
Double the tax break if the work is done predominantly in lower income and under privileged neighborhoods, creating affordable housing for families in the neighborhoods that need it the most.
Building Over Rail Yards and Other Structures That Allow For Air Rights to be Purchased
Think Hudson Yards for all of these. They are already near transit. They are already near grocery stores, shopping, restaurants. They are already dense neighborhoods, that can accomodate developments like Hudson Yards, Lincoln Yards, the 78.
Canal Street & Roosevelt Ave
The rail lines off of Roosevelt & Canal Street, adjacent to the vacant lot where the proposed 78 neighborhood could go.
West Loop Rail Lines
The rail lines throughout the West Loop, and behind 500 West Madison could have the potential to be built upon.
Area Over the McCormick Place Busway / Metra / LSD
This area is interesting because if the Bears end up getting a new stadium on the Lake Front or Michael Reese hospital site (which both should have ZERO public funding), a development above the rail lines, and LSD would provide immense value to the area.
Mayor Lori Lightfoot previously released a plan to develop the area in 2022 as a last-ditch effort to keep the Bears in Chicago.
Increase The Tax on Side Yards
The tax discrepancy on Side yards is baffling. Some owners even get a tax break for destroying existing housing and building a side yard. Look at this thread by twitter user @MollyFleck. If the city maintained the same level of taxes for side yards as they do for the single family home on the lot next door, residents would be motivated to sell to someone who is going to have housing built on the land. This is better for everyone in the neighborhood.
Offer Tax Incentives For Development Projects that would take place over Vacant Lots
Between Halsted St & Larabee Street, there are numerous vacant lots (near the New City development), that could easily be built upon. Based on the footprints of the proposed buildings at North & Wells, as well as Marcey Street, a developer could easily fit another 1,000 units on this otherwise vacant land
I have laid out a lot of solutions and options for the city to help address it’s housing crisis. In my opinion, they should do all of them but the ones that should be enacted immediately are:
Green light proposed developments, regardless of how their alderman feels about it. And if they are opposed to housing being built, they should be primaried.
Change zoning laws to allow more 2-4 flats to be built.
Limit demolition/replacement of existing structures capable of 2-4 flats in lieu of single-family homes
Single stair reform
Tax Side Yards on the same level as the single family homes next door
For anything that requires additional tax incentives, that would require a full discussion, both at City Hall and in Springfield. These incentives can’t be solved or created overnight. The larger scale developments, purchasing air rights, etc. all require longer timelines so developers can submit plans, obtain funding, community feedback, and everything that goes into getting one of these larger developments built.
I hope that the city of Chicago starts to taking it’s housing crisis seriously, because so far, it is not. City leadership needs to decide if they want to be Chicago to be viewed on the world stage as one of two options:
A formerly great city, that encountered financial hard times and never had the leadership, nor the courage & vision, to do what was necessary to remain a booming metropolis
A city that realized it had a problem, addressed it, and is now flourishing and positioning itself to be a future for the 21st century and beyond
I hope that it’s the second choice.