Zoning in Chicago on a multi-unit

18 Replies | Chicago, Illinois

Hello BP’ers!

Reaching out to you all to see if I can figure out a zoning issue. I am currently working on obtaining a 3 unit building that has 3 separate dwellings (basement 1/1, 1st floor 2/1, and a 2nd floor duplex up 3/2). It’s a rehab project and is currently zoned as RS-3. All the utilities are separated and each unit has its own water heater, HVAC, electric and gas (3 gas meters, 4 electric meters). I am in the midst of getting the certificate of zoning but as it currently stands zoning is for a 2 unit and I want to get the certificate for a 3 unit before I close. Is this possible? 

I looked at old permits and it looks like an electrical one was pulled in 2000 to install 4 electrical meters from the city. Is this proof that it’s really a 3 unit? Any and all information on what I should look into and use to get it zoned a legal 3 unit is greatly appreciated. Any advice or guidance is welcomed. Thanks in advance!

~Helen

No, electrical permit is not proof. It's only proof that the owner wanted to do something electrical, got a permit to do it, and signed off that it was done properly.

I have had this done three times now for clients deals. You need to find an old water bill like back in the 1950's old and if the water bill says "3 unit building" the city will give you a new zoning doc that says legal 3 unit and the city will not even come to the building or look at exits, modern code, etc. all they are doing is "correcting the zoning doc" grandfathering it in. Have an attorney pull these old water bills with FOIA from the city. One of the deals this happened quick enough that it was during close the other two after closing. 

If the old water bill says it's a 2 unit it's going to be a lot harder and I wouldn't bet on it ever changing. 

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Is it possible request these historical water bills with FOIA without an attorney? I see that they can be request online with the city. Not sure if it's recommended without an attorney. I own a 2 flat with 3 units currently and I've never heard of this before. I assumed the only way was through a rezoning application with Alderman approval. Any advice would be appreciated!

Originally posted by @Henry Lazerow :

I have had this done three times now for clients deals. You need to find an old water bill like back in the 1950's old and if the water bill says "3 unit building" the city will give you a new zoning doc that says legal 3 unit and the city will not even come to the building or look at exits, modern code, etc. all they are doing is "correcting the zoning doc" grandfathering it in. Have an attorney pull these old water bills with FOIA from the city. One of the deals this happened quick enough that it was during close the other two after closing. 

If the old water bill says it's a 2 unit it's going to be a lot harder and I wouldn't bet on it ever changing. 

@Helen Fremichael  

I'm in the process of getting a building I purchased switched to a three unit. is correct - my water cert says it's zoned as a three so you'd fill out a certificate of zoning compliance (https://www.chicago.gov/city/en/depts/dcd/supp_info/certificate_of_zoningcompliance.html) and pay the $120 fee. I wanted to get the water cert for another building I own (to see if I could get switched from 2 to 3) and emailed DWMfoia (at) cityofchicago (dot) org (BP isn't letting me put in email address) . You need to ask them "any historic water document on file" of the address you're curious about. 

Otherwise, it becomes extremely difficult to do. I believe you'd need to go to the alderman to try to get it rezoned as three unit and they are hesitant to do that because of density issues. 

Originally posted by @Henry Lazerow :

I have had this done three times now for clients deals. You need to find an old water bill like back in the 1950's old and if the water bill says "3 unit building" the city will give you a new zoning doc that says legal 3 unit and the city will not even come to the building or look at exits, modern code, etc. all they are doing is "correcting the zoning doc" grandfathering it in. Have an attorney pull these old water bills with FOIA from the city. One of the deals this happened quick enough that it was during close the other two after closing. 

If the old water bill says it's a 2 unit it's going to be a lot harder and I wouldn't bet on it ever changing. 

Originally posted by @Henry Lazerow :

I have had this done three times now for clients deals. You need to find an old water bill like back in the 1950's old and if the water bill says "3 unit building" the city will give you a new zoning doc that says legal 3 unit and the city will not even come to the building or look at exits, modern code, etc. all they are doing is "correcting the zoning doc" grandfathering it in. Have an attorney pull these old water bills with FOIA from the city. One of the deals this happened quick enough that it was during close the other two after closing. 

If the old water bill says it's a 2 unit it's going to be a lot harder and I wouldn't bet on it ever changing. 

Thank you!!!

Originally posted by @Brendan M. :

@Helen Fremichael 

I'm in the process of getting a building I purchased switched to a three unit. is correct - my water cert says it's zoned as a three so you'd fill out a certificate of zoning compliance (https://www.chicago.gov/city/en/depts/dcd/supp_info/certificate_of_zoningcompliance.html) and pay the $120 fee. I wanted to get the water cert for another building I own (to see if I could get switched from 2 to 3) and emailed DWMfoia (at) cityofchicago (dot) org (BP isn't letting me put in email address) . You need to ask them "any historic water document on file" of the address you're curious about. 

Otherwise, it becomes extremely difficult to do. I believe you'd need to go to the alderman to try to get it rezoned as three unit and they are hesitant to do that because of density issues. 

 Thank you!!!

Originally posted by @Brendan M. :

@Helen Fremichael 

I'm in the process of getting a building I purchased switched to a three unit. is correct - my water cert says it's zoned as a three so you'd fill out a certificate of zoning compliance (https://www.chicago.gov/city/en/depts/dcd/supp_info/certificate_of_zoningcompliance.html) and pay the $120 fee. I wanted to get the water cert for another building I own (to see if I could get switched from 2 to 3) and emailed DWMfoia (at) cityofchicago (dot) org (BP isn't letting me put in email address) . You need to ask them "any historic water document on file" of the address you're curious about. 

Otherwise, it becomes extremely difficult to do. I believe you'd need to go to the alderman to try to get it rezoned as three unit and they are hesitant to do that because of density issues. 

 Just curious, how long did it take to get the information back?

~Helen

@Helen Fremichael

This is common, advertising as a 3 unit when it's a 2 unit + in-law. You have to be careful since the non-conforming unit's income is not lendable (as in you cannot claim it as income for future lend-ability). 

It may also be an issue to close depending on what type of financing you are shooting for. 

Regarding the zoning change, don't expect it to happen overnight. There are certain criteria like 2 exits, ceiling height, etc. that must be fulfilled prior to even being considered. They are currently changing the ceiling height, bringing it down to 7 feet, so there is some progress.

Originally posted by @Jason Albasha :

@Helen Fremichael

This is common, advertising as a 3 unit when it's a 2 unit + in-law. You have to be careful since the non-conforming unit's income is not lendable (as in you cannot claim it as income for future lend-ability). 

It may also be an issue to close depending on what type of financing you are shooting for. 

Regarding the zoning change, don't expect it to happen overnight. There are certain criteria like 2 exits, ceiling height, etc. that must be fulfilled prior to even being considered. They are currently changing the ceiling height, bringing it down to 7 feet, so there is some progress.

Thank you for the information!

Helen,

Any update to your zoning process? I am currently in a similar situation with a 2 unit that has a basement with 8ft ceiling, front, and rear entrance. I am trying to figure out if it is worth going through the time and money to get a property rezoned and is the city tough at making the decision to rezone?

Hi BP,

@Henry Lazerow @Brendan M.

This is my 1st time commenting/ posting and hoping you all can provide some additional guidance on the below follow- up question. What is the exact language used in your email to the city for a historic water bill stating your property was ever considered a 3 or 4 unit? Can someone provide an example email of what they sent? Thanks greatly.

Grateful,

Don't know if this has been discussed in this forum but I'm hearing things about a vote that allows for these formerly 'illegal' basement units. Could open things up for Chicago investors since there's so many legal 2-units with finished in-law basement units that you legally can't rent out. 
https://chicago.curbed.com/2020/2/28/21152809/adu-chicago-legalization-coach-house-granny-flat-affordable-housing

Hi Helen. I know this is an old post but can I ask you a few questions? I am in the same situation trying to buy a 3 flat as an owner occupied but house came back as a 2 unit thru zoning cert but its a 3 unit in reality. Did the lender raise an issue with this? 

Hi Helen. I know this is an old post but can I ask you a few questions? I am in the same situation trying to buy a 3 flat as an owner occupied but house came back as a 2 unit thru zoning cert but its a 3 unit in reality. Did the lender raise an issue with this? 

@Alex Jaimes hello Alex, I JUST had a similar issue. Legal 2 flat, with an “in-law” unit in basement. The previous owner had a 3rd electric meter added recently but that meter controls the common areas of the building (hallway and outside lighting). My lender only started to ask questions when the appraisal came back with notes that mentioned the # of meters. Long story short, we had to prove that the 3rd meter was strictly for the common areas and not for the basement, also had to pay for electrical inspection and documentation back to lender. Deal funded/closed!