Chicago's ADU...Insanely powerful

8 Replies

Howdy Chicagoans! 

I have been quite excited about the possibility of this ordinance being passed and in effect 8.1.20 and have been thinking about the best way to implement a strategy. For those who are just hearing about this, on May 20th the long anticipated ADU ordinance was introduced to Chicago's City Council. I really like the way it was written as I think it will be able to remedy some pent up demand for affordable housing, legalize in-law units and coach houses that have been there for a long long time, and add conversions units and new coach houses!! I certainly recommend reading the details, but here is a few snapshots of what we can expect-

"3. How many ADUs could be built on a property?

Property owners in “R” zones can choose to add either one or more conversion units or a coach house. Coach houses would not be able to be built on any lot that has a conversion unit.

If adding conversion units

Owners of single-family houses that are 20 years or older would be able to build one “conversion unit”. All other residential buildings that are 20 years or older would be able to add 33 percent of the number of existing units, and rounding up or down.

  • 2-flats: 2x0.33 = 0.66 rounding up to 1 unit
  • 3-flats: 3x0.33 = 0.99 rounding up to 1 unit
  • 4-flats: 4x0.33 = 1.32 rounding down to 1 unit
  • 5-flats: 5x0.33 = 1.65 rounding up to 2 units
  • 6-flats: 6x0.33 = 1.98 rounding up to 2 units
  • And so on.

If adding a coach house

All properties that are either vacant or have a single-family house, 2-flat, 3-flat, or 4-flat would be able to add one coach house as long as there is no conversion unit on the lot."


If you have an Rzoned lot(majority of lots in the city) you would be able to, by right, add 1 unit.  My thought is that if you have an open basement, it would be the most cost effective way to utilize the new ordinance.  A coach house could be 700-1400sq feet as the footprint of the CH has to be 700sq ft, but maybe some builder creates an affordable CH design for the inevitable demand coming.

This should increase property values of current owners even if they haven't utilize the conversion or CH because a future owner could monetize that.  

Where I'm really excited is the idea of adding 33% more units in a big building with an open basement. Lets say you already own a 45 unit courtyard building with an open basement that used to house the boiler, W/D, and electric panels but you have already HVAC'd each apartment, added in-unit W/D , and moved electric panels to the units. By right you would be able to convert that empty ground floor space to 15 apartments!! Half of these apartment will need to be affordable ($1,069.50/mo) for the next 30 years and half could be market rent apartments. Assuming 100k/door to create these 2bd/1ba units, you could hit the 1% rule on the affordable units and close to 2% on the market rate apartments. You could refi the building after all of the new conversion apartments are rented and recapture 100% of the capital needed to create these new apartments. You just took your 45 unit building and converted it to a 60 unit building with no money out of pocket, created 1.5m of equity(assuming $200k/door ARV), and cash fow . That is the very definition of "highest and best use" and will make a lot of folks $$ while also contributing 8 affordable units to the city of Chicago.


I would love to hear others thoughts, and how they would take action if passed!


-JW
https://www.chicagocityscape.com/blog/chicago-s-adu-ordinance-was-introduced-see-what-you-could-build-583f436600?utm_content=bufferc493e&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer 

I don't think this law is going to be a game changer.  Adding a coach house, on a Chicago is tough.  Excavating through the alley and connecting the sewer to the existing front building.  As far as basement apartments, I own one garden apartment.  And the last three years, torrential rains has not made me happy.  It is risky.

One thing that Chicago should do is allow the conversion of empty storefronts to work/live spaces.  There is a surplus of retail space, especially now.  Some of this space is hard to rent, and semi obsolete.  Let the market determine the best use of space in non prime retail areas.  

timely post. i am aware of this and my sources tell me this WILL pass at the June city hall meeting. i think the ADU ordinance presents a lot of opportunities for current owners and future owners. as will all transactions, careful consideration needs to be made for things like water/sewer upgrades but otherwise, as long as you keep that in mind, i see no reason to analyze current inventory as including an additional, future and now legal unit. My only gripe is the current language, as written, would require special permit for RS2 whereas RS3 is as a matter of right. Call your Aldermen! there are plenty of areas that are RS2 that could benefit by removing the hassle of having to go in for a special permit. keep in mind current existing units get grandfathered in so this issue would not apply.

@Brian Ploszay , thanks for you input.  I disagree with you on garden apartments.  So long as you build it correctly(weeping system into a drain tile into a sump) you should have zero water no matter how much it rains.  While it is expensive to do, you probably will be digging down to the footing anyways to increase ceiling height and running a new underground sewer while you're at it. 

I agree fully with the storefronts, and will be surprised if that isn't incorporated in the ordinance.  Coach houses will be super interesting to watch as everyone will have to figure how to run the water service and sewer through the back yard.  

@Maria Bocanegra . I sure hope your sources are correct!  

@John Westbrook   Agreed that you can put the drain tile and a few other water proofing measures.  I find that most garden apartments in the City of Chicago don't have this system in place.  

@Steven Robertson yes that is a correct understanding. You have the choice between converting a basement into a legal third Or a Coachhouse, but not both, either being subject to the new building code that took affect August 1.

Given your zoning, you would not need to ask for anything from the zoning board. It is a matter of right. I hope that clarifies.

Just wanted to bring this thread alive again with a few updates that were posted but I haven't seen shared yet on BP.

As of the latest, The proposed Chicago ADU Ordinance's earliest adoption date could be September 9, 2020; however, it is likely to undergo additional changes and will likely be pushed further...

Update from 07/02/2020

https://www.chicagocityscape.c...


Update from 07/16/2020

https://www.chicagocityscape.c...


Update from 07/27/2020

https://www.chicagocityscape.c...