This story was originally published by Illinois Answers Project.

Thousands more homeowners will be able to build coach houses or convert their basements or attics into apartments — as long as their alderperson approves it — under a compromise measure the City Council approved last week after years of debate over so-called “granny flats.”

The coach houses and converted spaces, formally called accessory dwelling units, or ADUs, have been illegal to build in Chicago for nearly 70 years. Cities around the country have embraced ADUs to combat their housing crises by increasing affordable residences in expensive neighborhoods at no cost to taxpayers. City of Chicago officials, dating to former Mayor Rahm Emanuel’s administration, have advocated for their legalization citywide.

The ordinance, approved by a 46-to-0 vote, legalizes the construction of ADUs in all Chicago neighborhoods that are zoned for small apartment buildings and in most business districts, but it empowers alderpeople to restrict their construction in neighborhoods made up of single-family homes — by far the most common zoning district in the city. It also requires that any contractor applying to build a coach house commit to hiring union apprentice labor.

While some housing advocates hailed the passage of the measure, they also noted it will create a regulatory patchwork across the city, with some neighborhoods allowing ADUs but others severely restricting them or outright banning them, depending on the local alderperson. And even when homeowners can build them, the labor requirement will make them even more expensive.

“There’s a lot of wins in here, and so I’m really happy with where we got,” said Ald. Bennett Lawson, who has led City Council efforts to legalize ADUs across the city since he was elected to represent the Lakeview neighborhood in 2023.

“It’s a huge step forward in housing policy and adding gentle density,” Lawson said in an interview. “We have a crisis because we don’t have supply. And anything we can do to help increase supply at all levels … helps stabilize where rents are.”

The ordinance will more than double the area where ADUs may be built once it goes into effect in April 2026, city officials said. Currently, the only neighborhoods where ADUs may be built are in five pilot zones the City Council created in 2020 to test the policy.

“It is nice to see that this campaign to legalize ADUs citywide may finally come to an end after seven years, although it’s not truly a citywide ordinance,” said Steven Vance, a planning consultant who has pushed to legalize the housing units and was part of a city-commissioned ADU task force in 2020.

The ordinance allows ADU construction “by right” in the original pilot zones and opens the door for the council to legalize ADUs in more neighborhoods that are zoned for single-family homes. But it also gives a wide array of powers to alderpeople to restrict their construction in each new area. Alderpeople can cap the number of new units added to any block. They can limit construction to owner-occupied properties. And they can require applicants to apply for an “administrative adjustment” with the city’s planning department.

The new restrictions were added in response to strong opposition led by Ald. Marty Quinn (13th), who argued that adding too many new units could spoil the suburban feel of his Southwest Side ward. Other alderpeople balked at giving up their longheld power to veto any new housing in their own wards, no matter how small.

“I have some blocks where [ADUs] would simply not be accepted by the neighbors, I have other blocks where it would be — it’s my job to determine between the two, and I need to be able to do my job,” said Ald. Brian Hopkins, who represents parts of downtown and the Near North Side. “Decisions still have to be made by someone, and … it’s always preferable to have an elected official make difficult, controversial decisions.”

Vance said he expects several alderpeople to opt their wards into the legal ADU area without restrictions, and others to follow suit while adding the extra caps or hurdles. The end result would be a regulatory hodgepodge that requires city officials, architects and ward offices to keep track of which unique mix of restrictions applies in each of Chicago’s thousands of residential blocks.

“For homeowners, there’s going to be some difficulty ascertaining whether or not they’re in an eligible geography, and then which rules have been applied to that geography,” Vance said. “Their architects then will have the same struggle … and both of those lead to lower take-up because of the confusion and the difficulty.”

Ald. Daniel La Spata, a staunch supporter of ADU expansion whose Northwest Side ward was included in the pilot program, said the compromise has “far too many restrictions in it.”

“The question is, should land use and zoning be things that change from one side of the street to the other?” La Spata said. “We don’t do that with building standards. We don’t do that with water infrastructure. Why … with ADUs? What is the logic of that?”

Adding to the hoops for homeowners is the requirement that any contractor who applies to build a coach house must first enroll in a federally recognized labor apprenticeship program. The city has no such labor requirement for any other type of housing construction. No Chicago-based residential contractors are currently enrolled in a qualified apprenticeship program, according to a U.S. Department of Labor database.

“It’s not every day you see two sides find common ground and put together an initiative that works for everyone,” Bob Reiter, president of the Chicago Federation of Labor, said in a news release. “We’re thrilled labor will play a critical role in this ADU legislation.”

The permitting process to build an ADU is already more involved than typical, as applicants need separate approvals from the city’s housing and building departments.

Negotiations over the ordinance were hamstrung due in part to a 2023 notice by the U.S. Department of Housing and Urban Development that the city’s reliance on “aldermanic privilege,” the unwritten rule that each alderperson may veto housing proposals in their own ward, violates federal civil rights law and contributes to racial segregation. Housing officials under President Donald Trump reversed that finding earlier this year and walked away from efforts pushing the city to reform its zoning practices.

“The fact that in most of the city, the application of the ADU program will be left up to the local alderman is really unfortunate, and I think it’s hard to imagine that that would have been possible without the intervention of the Trump Administration,” said Daniel Kay Hertz, who served as director of policy, research and legislative affairs for the Chicago Department of Housing from 2019 to 2024. “In many ways, this is a direct result of the fact that the Trump Administration has blown up civil rights enforcement at HUD.”

The approved ordinance represents a “missed opportunity” to encourage ADU construction among middle-class and small-scale landlords, who already face financial and regulatory barriers, according to Swasti Shah, director of community engagement for the nonprofit Urban Land Institute.

Shah, who helped oversee the city-backed task force convened in 2019 by then-Mayor Lori Lightfoot to lay out a policy roadmap for citywide ADU legalization, noted “several positives” in the compromise ordinance that will add flexibility for would-be developers. The new language removes a cap on the size of new homes, and it lets applicants waive a requirement to keep a private parking space alongside each unit.

But the union apprenticeship requirement is sure to make construction more expensive, Shah said.

“You want regular homeowners … to be able to build ADUs,” Shah said. “The simpler the process is, the cheaper it is, the better.”

The web of regulations won’t be easy on bureaucrats either, said Hertz, who now works for the Chicago-based non-profit Impact for Equity.

“We hear from members of council all the time, ‘Hey, city, you need to get out of your own way and let people invest,’” Hertz said. “And it’s certainly hard to square that with … this inclination to have 50 different sets of rules.”

This post was originally published on Next City.