Chicago's Housing Crunch: Transit is the Answer

Sign the Chicago 2100 Petition: Improve Transit and Promote TOD to Escape the Housing Crunch

There’s no question Chicago, like many other cities in the US, is experiencing a housing crisis. Average rents are climbing faster than inflation, with more than half of renters spending half their income for a roof over their head. The most vulnerable homeless population has tripled in the last couple years. People are being priced out of their neighborhoods with record property tax increases. So why is Chicago becoming so unaffordable?

It’s a nuanced discussion, but our inability and sluggishness to address the problem only compounds the issue over time. I argue that it's our own self-inflicted policy that is driving this rental increase; granted there’s other factors such as construction costs increases, overall economic downturn with wage stagnation, and market movements in concentrated areas. What we as a city have control over is policy, and that should be where we start considering other successful reforms across the country. 

Zoning policy in Chicago is restrictive. Housing stock should be less restricted to grow by allowing 3-4 flat units in more areas, as these legacy units are the backbone of affordable housing stock today. New developments of 2-4 flats are outlawed in 80% of the city. IL House Bill 1814 supports just that, with relief to development by means of “allow the development of a duplex on each lot or parcel zoned for residential use that allows for the development of detached single-family dwellings.” It is a clear correlation that more supply drives down rent growth. An analysis by The Tribune shows Illinois needs 200,000+ units to meet current demand, and the current building rate cannot meet this. 

Correlation of Increasing Supply of Housing (permitting) vs Lower Rent Growth, from ApartmentList

There have been recent successes with SB2111 removing parking mandates, which can help build housing without space-gobbling mandatory parking. We have passed accessory dwelling reform (ADU’s)  to allow flexible units on properties. Affordable Requirements Ordinance (ARO) implementation helps promote housing production of family sized units at specified rates. These policies no doubt have helped, and without them we would be in a worse position, but this fight is not over.

Local organizations have played a huge role in advocating for this type of policy .Chicago CNT fights for equitable TOD and other important policies to promote affordable housing. Abundant Housing Illinois endorses bills to make these adjustments. With more time, a goal is for Chicago 2100 to partner with these organizations and other similar groups to promote beneficial policy for transit and housing alike.

The city has not experienced economic growth equally. Just follow the red line across the city and you’ll get a great visual. A dense, thriving, demographically majority white and white-collar north, and a highly vacant, struggling, underinvested demographically majority black south side. Between that is the loop, a crucial business and economic center with its own unique character and recent housing push. There is lots of demand to continue building up north, but less in the south with lower market rents. The long history in Chicago of racial segregation in neighborhoods has led to disparate economic outcomes, a trend still visible and effecting development. How can the city relieve such inequalities that have been brewing for decades?

To incentivize growth in the struggling neighborhoods clearly need investment. Government-led notorious housing ‘projects’ were demolished for their shortfallings, so similar concepts would likely fail to garner support. Is the private sector the solution? Financial incentives with small zoning reforms, such as expedited permitting, waived fees, and temporary property tax freezes on vacant properties that build affordable housing may work. The current program of ChiBlockBuilder should be expanded upon and focused on delivering housing. It can incentivize building of affordable units by ensuring financial viability to developers in the short term. Long term it would boost growth of the affordable housing stock. This isn’t a catch all solution to the ailments of the south and west sides, the city needs to think of a way to begin closing the gap without fronting the direct costs of construction and maintenance. 

City owned Vacant Lots, primarily on the South and West Side

Addressing crime and drug concerns and aiding residents to escape the cycle of poverty is a necessity to return to vibrancy. “A rising tide lifts all boats” is a principle our city should embrace by investing in and solving the urban issues of these neglected neighborhoods. That starts with housing and transit, with affordable options to create thriving economic centers and reliable rapid transit to access jobs.

Chicago is uniquely positioned as a big city with functioning transit, we should leverage our existing infrastructure to promote transit oriented development (TOD). This is the path of least resistance to build out new housing units quickly, with minimal impact on blighted traffic congestion. The city has already adopted policy to promote Equitable TOD. Several key projects have proven affordable housing near transit can prevent displacement and add desperately needed housing stock. This growth model is common sense, it builds resilient communities inherently connected to opportunities and the city at large. Further, we need to improve and expand our public transit network with visionary plans like Chicago 2100 to generate new transit-centered economic areas. We need sustainable growth, and without it, endless unaffordable tax increases on current residents will continue.

Our fiscal obligations are a ticking bomb, with recent property tax hikes reflecting the loop’s commercial real estate downturn and the burden shifting to residents, primarily in the poorest areas of the city. These jumps are staggering for some, signaling we need to grow the tax base with denser, productive, TOD areas. Pensions, aging infrastructure, and city overspending is piling up. 

Chicago Property Tax Increases, Overburdening residents in the most vulnerable neighborhoods

Without affordable housing in the city, some escape into the suburbs. This is not beneficial for Chicago, where the city loses potential business goers, taxpayers, and lifetime families. If the city wants to remain an attractive option for families especially, we need to ensure housing is affordable for them, our future relies on it. We need areas with current systemic crime and schooling issues to undergo reform and transform vacant land into vibrant communities again. Not to go without mentioning rapid transit access being a cornerstone to these neighborhoods. 

However, relocating growth to the suburbs is not a perfect solution for our region's wider economy. Along with increased travel times to economic centers due to sprawl plus car dependency and its downsides, StrongTowns illustrates the fiscal ponzi scheme suburbs can develop into. With more space, the fixed costs of infrastructure per capita increase, leading to financial burden on a smaller tax base for maintenance and infrastructure. Chicago is now seeing this burden from a legacy of sprawl in its periphery. With selective policy change, it could be a model for re-legalizing denser development to balance this. Paired with improved and expanded transit, and the city can thrive again.

Sign the Chicago 2100 Petition, Improve Transit and Promote TOD to Escape the Housing Crunch