The Chicago Association of REALTORS®, the “Voice for Real Estate” in Chicago since 1883, represents over 17,000 members from all real estate specialties including commercial sales, development, property management, appraisal, auctions and residential sales.
First deemed illegal in 1957, the City of Chicago has reversed course – Accessory Dwelling Units (ADUs), also referred to as Accessory Conversion Units (ACUs), are now legal, following the passage of the ordinance in City Council. While the Ordinance is currently effective, permits won’t be issued until May 2021.
What is an ADU/ACU?
An ADU/ACU is a housing unit created in addition to or within a primary unit, such as carriage houses. Other types of ADUs/ACUs include tiny homes or storage container homes, granny flats, a build-out space in the basement of a multi-unit or a space above a garage. The cost for the permit is $500 and an annual affidavit must be completed.
Accessory Dwelling Units help increase the housing supply, and REALTORS® firmly support policies that encourage building and construction.
What are the particulars?
The current ordinance allows for ADUs/ACUs in pilot zones. The ordinance does not allow building throughout Chicago; however, an ADU/ACU may be pursued as a zoning variance in areas outside of the pilot zones. Keep in mind: newly created units cannot be listed on any short-term rental platform like Airbnb, VRBO, etc, and the number of ADUs/ACUs will be limited based on the number of existing ADUs/ACUs currently on the block and on adjacent blocks with shared alleys. Finally, if two or more ADUs are constructed, units also have an affordable housing requirement.
It is well known that despite the 1957 law, some illegal units are currently in use; the hope is that this ordinance will encourage illegal units to register and come into compliance.
The legislation puts the onus on owners to notify the Cook County Recorder of Deeds. Bear in mind: this legislation was written before December 7, when the Cook County Clerk assumed the duties of the Recorder of Deeds; the Recorder of Deeds office no longer exists, so you will need to notify the Cook County Clerk’s office.
While it was asserted that all units of government are being consulted and informed, it is unknown how the Cook County Assessor will modify/increase assessments by adding a new structure or housing unit. Moreover, in the rare cases where a five or six unit building creates an ADU/ACU to bring the total number of dwellings to be more than six units, it is unknown whether that event will change the classification of the entire building, and thereby change the tax structure. Also, there is no discussion of decommissioning ADUs. These unknowns and others will be actively monitored by the REALTOR® Government Affairs Directors.
In addition to the actions taken by the Chicago Association of REALTORS®, Illinois REALTORS® is pursuing legislation during the next session which will eliminate the municipal prohibition against ADUs throughout the state of Illinois.