Accessory Dwelling Unit Ordinance (ADU) Approved
An Accessory Dwelling Unit or ADU is a legal and regulatory term for a secondary house or apartment that shares the building lot of a larger, primary house. An ADU can be a tiny house in the backyard, a coach house, a granny flat, a build-out space in the basement of a multi-unit or space above a garage.
In December 2020 the Chicago City Council approved a limited, three-year pilot program providing a framework for the legalization of coach house and “conversion units” in small residential structures in restricted areas of the city. This Ordinance took effect on May 1 2021.
In Chicago, the creation of accessory units has been illegal since 1957. This ban was a reaction to the rapid demographic change that was occurring in Chicago at the time it was enacted as a rapidly expanding African-American population was moving into previously all-white neighborhoods. .
According to some studies, if broadly permitted, ADUs have the potential to create a significant numbers of affordable units. The units would be smaller within a residential building and, tend to rent at a discount.
Owners can do what they want with their property without City restrictions (beyond basic building code health and safety issues) on the first coach house or conversion unit at any given property that qualifies under the terms of the Ordinance except the short-term (i.e. AirBNB) market,
But if that same owner has a building that would accommodate two or more conversion units, then all the extra restrictions kick in. The new Ordinance requires that 50% of the newly created units be restricted to households earning no more than 60% of area median income (AMI), and these restrictions must be recorded and enforced for a minimum period of 30-years.
Partially compensating for these restrictions, the Department of Housing has committed to offer some subsidies to qualified renter households through the Chicago Low Income Housing Trust Fund to secure subsidies that support tenants who make 30% of AMI or below.
Other restrictions in the pilot program include geographical restrictions, with about 90% of the city’s land area excluded from the program. Five pilot areas are created in this Ordinance on the North, Northwest, West, Southwest and Southeast Sides of the city.
A further restriction is that the West, Southwest and Southeast zones will only permit the conversion of two units on any given block. Anything beyond this two-unit limit is subject to additional Aldermanic approval.