What is it?
Maybe you’ve heard this acronym flying around lately, or maybe you haven’t, but you definitely know these ubiquitous housing units by one name or another. ADUs refer to accessory dwelling units, but that’s just another way of saying secondary suites, guest houses, garden suites, mother-in-law suites, granny flats, coach houses, laneway houses, granny annexes, in-law suites, garage apartments, or accessory apartments. Interestingly, Chicago is calling these “additional dwelling units” on the City webpage—perhaps because “accessory” sounds more like a necklace than an apartment.
We’ll grant that “ADU” and its aliases aren’t especially sexy terms, but there are some real heart-throb advantages to these housing units that we’ll explore below. First we invite you to close your eyes and recall how, in Happy Days, Fonzie lived in a well-trafficked garage apartment that he rented from the Cunninghams. Low rent (combined with Arthur Fonzarelli’s ability to punch vs. pay for songs on the jukebox) allowed for extra money to buy motorcycle parts and other such necessities for his coolness. In fact, some places around the country actually refer to ADUs as “Fonzie Flats” (dare to dream, Chicago!). If the greaser lifestyle doesn’t resonate, perhaps consider Nick Carraway's cottage in The Great Gatsby as your point of inspiration, or the attic apartment that sheltered the incomparable Michelle Obama and family in the top half story of her great aunt’s Chicago bungalow in South Shore.
The basic idea is that the ADU is secondary to the primary house on the lot, but usually has its own entrance, kitchen, bathroom, and living area. There are three types of ADUs: interior, interior with modification, and detached. Examples of these accessory units include:
An apartment above a rear detached garage (a "garage apartment" or “Fonzie apartment”)
An apartment above the main floor of a house (Michelle Obama’s childhood home)
An apartment below the main floor of a house (a "basement suite")
An apartment attached to a house at ground level
A suite detached from the principal dwelling (a "garden suite" or "guesthouse" or Nick Carraway's cottage)
Here’s a handy graphic to show you what some of these variations might look like:
History of ADUs
ADUs have pretty much always been around in one form or another, but they were especially popular in the United States in the early 20th century. Multi-generational households were common, hence, the “in-law” apartment, which allowed for independent living and, arguably, retained sanity. There were also scenarios like soldiers returning from war en masse and moving back home, so families would often build additions onto existing homes or find other similar arrangements that allowed for privacy.
Chicago’s 20th century building booms took place during the 1910s-20s and then started up again in the 1950s. (In case you’re curious, the lull in between these two periods was caused by a combination of the Great Depression, a halt on building during WWII, then the depopulation of the city due to home building subsidies given to returning soldiers who moved out to the suburbs—but that’s for another blog post.) In the 1950s, Chicago’s population was booming, as evidenced by the hoards of jaunty mid-Century homes that created brand new neighborhoods, as well as the thousands that filled in vacant lots in existing communities. This boom in the 1950s led city officials to fear overcrowding, and as a result, secondary residential structures were banned in Chicago in 1957. Additionally, zoning changes such as off-street parking requirements severely limited the ability to create additional living spaces from existing, underutilized spaces. So, the question is, why is all this coming up again?
Why bring the ADU back? Affordable housing.
According to a Chicago Tribune article written in April of this year, Chicago is 120,000 units short on affordable housing. That’s a whole lotta units. But, the idea that affordable housing can only be created through massive new construction projects is a limited view—why not also put existing buildings to work? Why not simultaneously help the owners of those homes pay down their mortgage or pay their rising taxes with rental income? Being able to convert coach houses, attics, and basements into apartments in existing buildings means a lot more small, available units all over the city. While this won’t get us to 120,000 units, it will double the density on a city lot, and that can be an important piece of the puzzle.
That said, there have been some questions raised about the effectiveness of this plan. For example, with the massive shortage of lumber and other building materials due to COVID-19, renovations and construction costs are way up, so will that mean ADU rents have to be higher than “affordable” to make the conversion worth it? And, will code compliance be a hefty burden?
It’s a complex issue with a lot of barriers and a lot of proposed solutions, and we will likely need many different approaches to address this issue of housing in a meaningful way. The good news is that the critics are asking important questions while this ordinance is still in the pilot phase and some adaptations have already been made. The city’s current approach and ordinance guidelines are at the end of this post.
Why environmentally-conscious folks like them
Massive construction projects, like those that create a few dozen affordable units mixed in with market rate units and shopping, mean massive amounts of dust created and blown into the surrounding areas, not to mention an incredible amount of resources extracted, refined, shipped, and shaped to create these new buildings. In addition to the resources themselves, many nonrenewable, it takes a whole lot of energy to do the actual building, and the machines used create additional pollution. Beyond even this, approximately 40% of our landfill waste is attributed to construction/demolition debris and rapidly filling landfills. We need to start thinking more seriously about using the well-made and resilient building stock we already have. We can’t build ourselves out of a crisis that was created by an over extraction of resources. Even net-zero homes take decades to offset the energy that it took to build them.
Of course we should build smart when we do build new, but we already have billions of square feet of existing living space, and it’s not all being used. The building sector accounts for about 40% of total energy consumption and 38% of the CO2 emissions in the U.S., so the more humans we have in a house, the better from a resource consumption standpoint. That means the more density, the better. And, lest we feel we’re martyres for sharing our existing space, we might again look to Fonzie for guidance. In the 1950s, American homes had an average of 983 square feet of floor space for a household size of 3.37 people. In the 2010s, the average home was 2,392 square feet for 2.59 people. We live in three times the space we used to. Why are we spending all that money heating and cooling empty rooms?
Because living in less space was so common back in the day, many older homes like Chicago bungalows were actually built with expansion in mind, so it’s a no-brainer to use that unused square footage! Unfinished attics and basements kept original housing prices low and allowed for future build-outs as money allowed, so we are already pretty well set-up to bring these back into our existing housing stock. And again, if it was good enough for Michelle...
But what about the historic character of the home?
Here’s the thing—most ADUs are separate buildings in the rear of the lot or are incorporated into the original envelope of the building, so there is minimal monkeying with the historic character of the home or the overall vibe of the street. While some homeowners are concerned that their neighbors are going to add gigantic additions to their homes as a result of the ordinance, well, it’s hard to say how that will play out in every case. But, historic preservationists are generally on board after years of seeing old homes obliterated and replaced with visually incompatible new construction. Even if a second story is added—and we’re not advocating for that, but if—at least the set-backs, first floor materials, and architectural details remain, as does the overall rhythm of the street.
In most cases, ADUs are a gentle way to add density without tearing apart our existing infrastructure and neighborhoods. Being able to add tenants to older homes also means mortgage payments, taxes, and home maintenance can be supplemented by rent, keeping folks on top of their bills and continuing to live in those homes. Vacant properties are always more vulnerable because they can be snapped up by developers and torn down to build something bigger.
These additional dwelling units are friend makers. Affordable housing advocates understand the importance of increasing density in a building to create smaller units for rental purposes. Environmental advocates also understand the importance of density for sharing resources to lower carbon footprints. So, everyone can hold hands now because adding an ADU to an existing home means raising the density on any given lot without needing to demolish the existing home. Huzzah!
Who wants to live in an ADU?
Well, younger folks.
Research done by the Massachusetts Institute of Technology in 2015 found that Millennials prefer renting to owning, prefer cities to suburbs, are likely to live at home with their parents, and are putting off marriage for longer than previous generations which means fewer kids and less homeownership. “Walkability”—having ample safe and clear paths and being in walking distance to shops, restaurants, entertainment, transportation, parks, cultural facilities and other things that make life worth living—is also key, and cities tend to have higher walkability scores (check out www.walkscore.com to learn your own neighborhood’s score).
The shifting American dream coupled with other factors—like skyrocketing student loan debt, health insurance costs, wages that have not kept up with inflation, and other barriers to expendable income—has made smaller and more affordable living spaces increasingly necessary. And it turns out, a pandemic doesn’t exactly help with any of those factors. This reality is the same for Gen Z, and given the financial havoc of the pandemic, it seems likely that even more young people are staying home with family when possible.
And it turns out, older folks want to live in them, too.
In 2019, AARP, the largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older, put out a report in support of ADUs and their crucial role with our aging population. According to their data, people over 50 prefer to live in walkable neighborhoods that offer a mix of housing and transportation options and that are close to jobs, schools, shopping, entertainment and parks. So basically, they want what people under 50 also want! Living in an “in-law” apartment or renting an ADU simply for the benefits of affordability and location would allow for fixed income adults to still have easy access to food, amenities, doctors, etc.
But according to the 43-year-old writing this blog post, 50 is still pretty young(!), and many in this age group are looking to create ADUs as the landlords, not necessarily as the renters. In a 2018 AARP survey, people age 50-plus who would consider creating an ADU said they’d do so in order to:
provide a home for a loved one in need of care (84%)
provide housing for relatives or friends (83%)
feel safer by having someone living nearby (64%)
have a space for guests (69%)
increase the value of their home (67%)
create a place for a caregiver to stay (60%)
earn extra income from renting to a tenant (53%)
What is the current state of the new ordinance?
Much progress has been made and as more information comes in over the next few years, the ordinance will likely continue to be updated and tweaked. The current version of the Additional Dwelling Units (ADU) Ordinance, as approved by the Chicago City Council in December 2020, allows ADUs in attics, basements, and accessory buildings (think rear lot). It also provides a path for legalization of units that were previously built without zoning approval and building permits. But, after critics of the ordinance questioned some of the original plans, the city moved to a pilot program, versus opening this up city-wide, to see if these ADUs will work and perform as hoped. The affordable housing requirements below are also a result of early conversations, but we’re not getting into the nitty gritty of those requirements in this blog post. The below info is taken directly from the City of Chicago website’s ADU Ordinance page and there’s more where that came from, so definitely dig around the links below for more specifics.
Eligibility
Starting May 1, 2021, property owners in five ADU pilot areas can apply at www.chicago.gov/adu to create one or more ADUs on their property.
North Zone, covering portions of the Edgewater, Lake View, Lincoln Square, North Center, Uptown and West Ridge community areas
Northwest Zone, covering portions of the Albany Park, Avondale, East Garfield Park, Hermosa, Irving Park, Logan Square, Near West Side and West Town community areas
West Zone, covering portions of the East Garfield Park, North Lawndale, South Lawndale and West Garfield Park community areas
South Zone, covering portions of the Ashburn, Auburn Gresham, Chatham, Chicago Lawn, Englewood, Greater Grand Crossing, Roseland, Washington Heights, Washington Park, West Englewood, West Lawn and Woodlawn community areas
Southeast Zone, covering portions of the East Side, Hegewisch, South Chicago and South Deering community areas
In addition to the geographic requirement, properties must also:
Be at least 20 years old if adding a conversion unit in basement or attic space
Be located in a residential zoning district — either an RM, an RS or an RT — with the exception of RS-1, single family housing
Affordability Requirements and Opportunities
For properties with two or more conversion units, every other unit must be legally restricted affordable at 60 percent Area Median Income (AMI) for 30 years after its construction. Properties with two or three conversion units must have one affordable unit, properties with four or five conversion units must have two affordable units, and so on.
Additionally, interested property owners can partner with the Chicago Low Income Housing Trust Fund to receive subsidies to support conversion unit tenants that make 30 percent AMI or less.
ADU Neighborhood Lending Program
Financial assistance will be available for low- and moderate-income homeowners in the form of forgivable loans to complete ADU-related work. The ADU Neighborhood Lending Program will be available to households making up to 80 percent AMI, outlined in the table below.
Qualified applicants will be eligible for forgivable loans of up to $25,000. That maximum amount will increase to $35,000 for work that will result in an ADA-accessible ADU. More information on the ADU Neighborhood Lending Program will be available when applications open later in 2021.
Additional Regulations
Additional key regulations are listed below.
No additional parking is required for newly created ADUs
No existing on-site parking can be removed to create ADUs without administrative adjustments or other zoning relief
No short-term leases or vacation rentals, such as Airbnb, are permitted in ADUs
Coach houses may cover no more than 60 percent of a property’s required rear setback and may contain no more than 700 square feet of living space
No elements of a coach house can exceed 22 feet in overall height above grade
ADUs are exempt from minimum lot area per unit rules
In the North and Northwest zones, vacant lots can have coach houses constructed before a principal residence, but this is not permitted elsewhere
In the West, South and Southeast zones, buildings with one to three units must be owner-occupied in order to add a conversion unit
In the West, South and Southeast zones, buildings must be owner-occupied in order to add a coach house
In the West, South and Southeast zones, only two ADU permits will be issued per block per year
Application Requirements
Building permit applications for an ADU must include plans prepared by an Illinois-licensed architect or structural engineer. The architect or engineer may submit the permit application directly to the Department of Buildings (DOB) or may work with a City-licensed permit expediter to do so.
Property owners interested in applying for an ADU permit beginning May 1 can start to secure these professional services now. A property owner may also hire a general contractor; however, they may be eligible to act as their own general contractor if the property will have less than six units after the ADU work is complete. City-licensed electrical, plumbing and mason contractors are required for electrical, plumbing or masonry work to be performed under the permit.
An initial intake application will be reviewed by the Department of Housing (DOH) prior to the typical permitting process through the Department of Buildings (DOB). Certain applications for an ADU may require a zoning opinion letter from the Department of Planning and Development (DPD) to affirm the quantity of legally established units if acceptable records cannot be produced by the applicant.
Additional questions about the ADU Ordinance and the upcoming application period can be directed to adu@cityofchicago.org.
Additional Resources
Blog Sources and Additional Resources
City of Chicago ADU Ordinance https://www.chicago.gov/city/en/depts/doh/provdrs/homeowners/svcs/adu-ordinance.html
1957 Zoning ordinance banning ADUs: https://babel.hathitrust.org/cgi/pt?id=mdp.39015070335644&view=1up&seq=1
Eli Spevak, Orange Splot LLC and Melissa Stanton, AARP Livable Communities (2019). The ABCs of ADUs (PDF). AARP. https://www.aarp.org/content/dam/aarp/livable-communities/livable-documents/documents-2019/ADU-guide-web-singles-071619.pdf
Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2015. https://dspace.mit.edu/handle/1721.1/101321
Example of a basement ADU