Chicago committee looks at free-market solution to affordable housing

Josh Bandoch, head of policy for the Illinois Policy Institute, testimony about how accessory dwelling units can help fix Chicago’s affordable housing shortage. City regulations and mandates can derail this free-market solution, though.

Illinois Policy Institute research about why granny flats and other housing on existing, single-family lots are an important tool to increase Chicago’s housing supply will be presented during the Chicago City Council Committee on Zoning, Landmarks and Building Standards hearing July 16.

Institute research recently showed how expanding access to accessory dwelling units and other housing on existing residential spaces is a possible solution to the city’s affordable housing crisis. Cities allowing the units see an uptick in naturally affordable and inclusionary housing.

Josh Bandoch, head of policy at the institute, will testify and present findings from the report he recently coauthored. The text of his testimony follows.

Comments on accessory dwelling units and Chicago City Council Ordinance SO2024-0008918

By Joshua Bandoch, Ph.D., Head of Policy, Illinois Policy Institute

There was a Chicagoan who grew up in an accessory dwelling unit on the South Side, at 7436 S. Euclid Ave. Her family rented a converted attic apartment from her great aunt, who lived on the first floor. Her aunt needed the money. Her family needed a home. Her aunt lived in one of the few areas where ADUs were allowed. What if she hadn’t? Michelle Robinson might not have become First Lady Michelle Obama.

We are testifying in favor of the policy to increase ADUs because we believe the best way to promote housing affordability is to increase housing supply.

Housing affordability is a big problem in Chicago. Consider:

• 43% of households are “burdened” by housing costs, meaning they spend at least 30% of their income on housing.
• 23% are “severely” burdened, meaning they spend at least 50% on housing.
• Two-thirds of our low-income neighbors spend at least half their money on housing.

We can do better.

Chicago’s affordable housing problem is a supply problem. Research has shown allowing more ADUs has increased housing supply in Portland, Seattle and California.

In 2017, Los Angeles passed its own ordinance removing many of the barriers people faced to creating more ADUs. These reforms have been successful. LA now has more than 27,000 additional ADUs. Surrounding counties, such as Long Beach, have taken notice and have also expanded ADU usage.

The only equitable way to foster affordability is to increase housing supply. To do this, we need to remove regulations that unnecessarily restrict supply.

That points to further ADU reforms, including reducing or eliminating the number of units that need to meet affordable housing requirements, because they discourage the creation of more ADUs. That disproportionately hurts the people most in need of housing.

Allowing more accessory dwelling units is a simple, fast way to help your constituents by making housing more plentiful and affordable. Chicago can lead on this issue by adopting these proven reforms.