Testimony: Chicago leaders agree to boost housing supply, affordability

Chicago City Council members heard from Illinois Policy Institute researchers as they considered allowing more commercial space to be converted to housing. The council then unanimously voted for the change that will boost supply and affordability.

Members of the Chicago City Council unanimously passed an ordinance to allow the ground floor of commercial space to be converted into residential units to increase the supply of housing in Chicago.

The change came after testimony Feb. 18 by the Illinois Policy Institute’s Josh Bandoch, head of policy, and LyLena Estabine, policy researcher. Their comments before the Committee on Zoning, Landmarks and Building Standards helped convince aldermen that allowing conversion of these spaces is an effective and efficient way to boost affordable housing. The committee recommended the ordinance be passed and the next day the full City Council did so, unanimously.

The text of the researchers’ testimony follows.

Comments on converting commercial space into opportunities for housing and Chicago City Council Ordinance O2024-0008277

“We are testifying in favor of allowing ground floor commercial establishments to be converted into homes because the best way to promote housing affordability is to increase housing supply.

“Housing affordability is a big problem in Chicago:

• 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.

“The status quo disproportionately hurts the people most in need of housing.

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

“Burdensome restrictions on converting commercial space to homes is an easy and obvious target.

“A lot of commercial space lies vacant. The downtown vacancy rate on commercial properties has consecutively increased for the past three years. At the end of 2024, it hit an all-time high of 26.3%. So many of our neighbors could call some of that space home – if we let them.

“Allowing for commercial space to be converted to residential also would protect the character of our communities. It would:

• Increase available housing without requiring new land development.
• Support nearby businesses by increasing population density in those neighborhoods, preventing more businesses from closing.
• Create more walkable neighborhoods, reducing dependence on cars for access to restaurants, shops and public transportation.

“Allowing more commercial properties to become homes is a simple, fast way to help your constituents by making housing more plentiful and affordable. If this ordinance proves successful, the city could allow for even more commercial properties to be converted to housing. Chicago can become a leader for housing abundance by adopting this proven reform.”