Accessory Dwelling Units ordinance expected soon: Will it solve or add to affordable housing challenges?

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civic projects
Monica Chadha, founder and principal architect of Civic Projects, shared real financing figures for a sample project. She is currently adding two basement units to an existing six-flat. The project is made possibly by a zoning change Chadha acquired. If the ADU ordinance were in effect when she started the project, the zoning change would not have been necessary. (Chicago Cityscape)

Chicago City Council is expected to complete a final vote in June or July for a new zoning ordinance to bring back accessory dwelling units — or ADUs . The new rules will go into effect Aug. 1.

“But what exactly will a post-ADU ordinance landscape look like?,” Jay Koziarz writes for Chicago Cityscape. “Where will these units be built, and who will be able to afford them?”

ADUs are smaller secondary units — often called coach houses or extra basement units — on residential lots. They were made illegal in Chicago in 1957. These could be over-the-garage residences or stand-alone backyard cottages, but the simplest solution could be basement conversions in existing structures.

“The (ADU) ordinance is an almost invisible way to increase moderate-cost rental opportunities across the city that fit-in with the way a neighborhood already looks,” said Marisa Novara, commissioner of the Chicago Department of Housing. “Legalizing these units is also part of our affordability strategy. They can have a real and positive impact on homeowners that need extra income as they may be experiencing rising property taxes and may need to age in place.”

In Chicago, the most straightforward, affordable, and abundant option could be basement conversions in existing structures.

Advocates say basement ADUs cost less to build and therefore can be rented at a lower rate, advocates say. Based on estimates in a Urban Land Institute (ULI) report, a lower-level space needing structural changes and other improvements will cost roughly $150,000 to be converted into an ADU. If such a space complies with code requirements and does not require significant structural work, the price tag could fall to $75,000 — well below the cost of a typical housing unit. The ULI has identified nearly 77,000 two- to four-flat buildings with potentially habitable basements.

One challenge: What would the legislation’s impact be on any existing ADUs that don’t fully comply with the rules.

“We saw developers deconverting multi-unit buildings and the families living in not-so-safe basement units facing displacement,” Dian Limas, president of the Communities United board said. “These residents were grateful to be there because it’s the only housing they could afford and they would be homeless otherwise. Our discussions around ADUs started with the goal to put a dent in the affordable housing crisis and prevent the displacement of low-income and middle-class families. But what landlord wouldn’t raise rents after having to make such a large investment?”

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