Meeting Chicago’s parking requirements for housing developments has been a headache for the nonprofit Bickerdike Redevelopment Corp., said Joy Aruguete, who has been CEO for more than 20 years.
“It’s a huge issue, especially if you’re rehabbing old buildings, or you’re building in an area that you’re going to have to do parking,” Aruguete said. “Back in the day, when we were required to do one-for-one [parking], we had to do parking lots in the middle of residential streets. It was awful.”
But the city passed an ordinance in July that Aruguete and other housing experts say is a move in the right direction: eliminating parking minimums near public transit, where fewer residents are dependent on cars.
Passed by the City Council on July 16, the ordinance gives developers the option to reduce what was historically required — off-street parking in new or rehabbed housing projects. Depending on its proximity to a CTA or Metra stop, off-street parking can be reduced by up to 50%, or even eliminated. Off-street parking typically takes the form of surface parking lots or parking garages.
Nearly 27% of households in Chicago don’t have a vehicle, based on a five-year estimate between 2019 and 2023, according to the Chicago Metropolitan Agency for Planning, which helps the region tackle land use and transportation challenges. The agency also estimates that 45% of the city’s residents have one vehicle.
Experts say eliminating some parking spots means developers can add more housing units to a project, which would help alleviate the pressures facing Chicago’s housing market.
A March report from Housing Action Illinois and the National Low Income Housing Coalition found there’s a shortage of 289,419 affordable rental homes for those with the lowest incomes in Illinois. In Chicago, it’s 126,165 homes, with only 32 affordable rental homes available for every 100 extremely low-income households.
“This is all happening in the context of a housing crisis,” said Emily Laflamme, director of urban analytics at the Chicago-based Center for Neighborhood Technology. “We know housing affordability has become more of an issue as housing supply has been constrained over time. I think from that standpoint, it’s becoming more and more important to be thoughtful about intentionally building more affordable housing.”
The nonprofit research firm published a 2016 report called Stalled Out that explored how parking lots in Chicago diminished neighborhood affordability.
Laflamme said the biggest takeaway in the 28-page report was that Chicago “grossly” overbuilt parking relative to demand.
It examined 40 residential buildings throughout the city and found one-third of the parking spaces were left unused during peak occupancy. Researchers surveyed the buildings at 4 a.m. — when residents would typically be asleep with their cars parked.
“What Stalled Out showed was not only are we spending a lot of time and money on parking, we’re spending a lot of time and money on unnecessary parking,” Laflamme said. “It’s just being built and sitting empty. The idea here is to have a better and more detailed understanding of how much parking really is required for a space, and then build that amount so that we’re not overspending on parking.”
The Center for Neighborhood Technology found the cost of building a single parking space can range from $4,200, at a surface parking lot, to $37,300, at an underground parking garage. The costs have soared since the report was issued.
The nonprofit is working on a follow-up to the study that should be released in spring 2026.
Cutting red tape
While rising interest rates and insurance costs are putting pressure on developers, construction costs have become the main pressure point, Aruguete said.
“It’s crazy — the cost of developing affordable housing. And parking is part of the equation,” she said.
Eliminating a project’s parking minimums near transit will help developers cut costs during a time when it’s desperately needed. It will also help cut red tape that can bog down developments.
Slashing parking minimums was one of the top 10 “big bets” in Mayor Brandon Johnson’s “Cut the Tape” report, which included more than 100 recommendations on how to streamline licensing, permitting and development plans.
The report noted the 2022 Connected Communities Ordinance was a starting point for providing more flexibility in parking requirements. The ordinance updated standards for equitable transit-oriented developments throughout the city. It also created more flexibility for parking requirements, increasing the number of eligible zoning districts where new developments could provide less off-street parking than is normally required. For new affordable housing projects, the ordinance eliminated parking mandates as long as the project falls into a transit-oriented development area and at least half of the units are designated as affordable.
The savings from building less parking could translate into more units and affordable rents. The ordinance also allows developers to turn underused parking spaces into other uses, like more residences.
“It’s a tangible change that developers will be able to benefit from,” said LyLena Estabine, policy researcher at Illinois Policy Institute. “By reducing these parking minimums by right, it not only saves on the costs of the land and the preparation that a parking lot would need, it’s also saving on the cost of going to City Council, taking that time, paying those fees, to get that adjustment.”
Benefits for the city
Alex Cohen, associate at commercial real estate firm Interra Realty, said it’s likely new projects utilizing the ordinance won’t be delivered until 2026.
Cohen said high rents might cool off within the next few years because of the ordinance as more density is added in neighborhoods where housing is sorely needed.
Data from Zumper, released Monday, shows the median rent for a one-bedroom apartment in Chicago is $2,120, a 6% increase from July.
Cohen predicts neighborhoods like Jefferson Park, Portage Park and others on the Northwest Side, where the Blue Line runs, could benefit the most from the new ordinance.
“There’s more room for density in those areas than, say, something closer to Downtown, where we’ve seen high-rises go up,” Cohen said. “These Northwest Side neighborhoods … that are less dense now but have good transit will benefit. That’s probably where we’ll see the bulk of this inventory go up.”
Aruguete said neighborhoods like West Humboldt Park will also benefit. She sees potential for more housing and density along corridors where residential areas start to bleed into commercial corridors.
“We’ve done a lot of development in that area. And there’s still blocks where there were a lot of investor purchases, but they didn’t do anything with what they bought. They were just waiting for it to appreciate,” Aruguete said. “I think that when you wrestle control away from people who are not developing and to people who do build housing, it will be enormously helpful.”
Tony Manno, principal planner at the Chicago Metropolitan Agency for Planning, said it’ll take some time to see if the ordinance works.
“I want to see it in action. I want to be able to look at it for a couple years and watch some cranes in the sky and see some buildings go up that employ this new approach to entitlements, and then take a look at the traffic patterns and see if it really has an effect,” Manno said. “It’s probably one of many things that can really affect what this is meant to change.”