Published on Aug. 27, 2020 by Steven Vance
I’m going to give an update on the Chicago accessory dwelling unit ordinance, and show three new ADUs at various stages of development, from conceptual (Focus and bKL), to “waiting for re-legalization” (Granny Flats Chicago), to built-and-rented this year (Monica and Rob).
“Accessory dwelling units” are smaller apartments that have different built forms and coincide with a larger, primary house — which has one or more units — on the same lot. They can be inside, attached to, or separate from this house, and most forms of it are banned through a hodgepodge of zoning rules that regulate the number of buildings and units on a lot.
City Hall will likely propose revisions in September covering, in part, how many ADUs will be allowed during an initial period. Despite what I think will be a setback in the rules, I remain positive that re-legalizing ADUs in Chicago is a key policy that the Department of Housing wants to adopt in the city and it will be passed in some form this year.
1. Built-and-rented: Two new basement units
Monica Chadha, principal of the Civic Projects design firm, and her husband, Rob Chambers, built two basement units in an existing six-flat they own — and even though the ADU ordinance isn’t effective, it would have helped their project. The vintage building is on South Prairie Avenue in Bronzeville.
Since the property has the RM-5 zoning district applied (which allows for the building’s size and density), and it wasn’t downzoned, no zoning change was necessary to increase the unit count from six to eight.
Monica and Rob said they’re looking at ADUs to “increase both revenue and value in buildings in the communities we work with. The addition of legal basement units is a great way to build equity for small building owners and owner occupied buildings.” In the proposed ordinance, owners of six-flats would be able to add two apartments without the need for a zoning change.
They had originally budgeted $90,000 for the two units, but the final budget was $110,000, because they eventually chose higher-quality finishes, stainless steel appliances, granite kitchen countertops, and ceramic tile in the showers. Rob said, “Increasing the quality of the apartments has paid off in quick leasing. Also higher quality materials will require less maintenance and last longer.
Monica and Rob acted as the general contractor, meaning they managed the hiring of construction workers and subcontractors. They said they could better control work quality and “reduce costs”. Monica, being an architect, performed the architectural services for the conversion project. She said, “Civic Projects Architecture did get paid a small fee for providing architectural services. While this did not reflect a full fee, clients should anticipate seven percent of cost of construction with a fee not less than $5,000. A project with more interior finishes and custom work would run closer to ten percent.”
Having the ADU ordinance in place when they started the conversion would have been helpful by eliminating their parking requirement. This being Chicago, every new apartment is required to have an on-site parking space, unless it’s in a mixed-use zoning district and near a CTA or Metra station or an eligible bus corridor. The city’s Transit-Served Location rule doesn’t apply to residential zoning districts, though. Somehow Monica and Rob had to find space for two parking spots.
If the TSL rule did apply here, the parking requirement would be waived, since the building is well within the allowed distance to the 43rd Green Line station. There was enough room in the back to create two parking spaces, but Monica and Rob had to create an agreement with the CTA to allow those drivers to drive under the tracks and park in the rear of the lot. The Green Line is an alley ‘L’ and runs behind dozens of buildings on South Prairie Avenue, just west of the alley.
Finally, I asked if they had advice for other owners of old and larger multi-unit apartment buildings like theirs in Chicago:
The process for larger buildings would be similar. Many of the larger walk-up multifamily buildings built in the teens and twenties were built with a raised basement. The challenge is finding spaces with appropriate exiting and ample daylight and ventilation. Six-flats work well because they tend to be long and narrow.
To start the process building owners should do a zoning check of their property and understand what the permitted uses are. This can be done by asking an architect or other services to spend a couple of hours reviewing the project. Owners should also ask the professional to check exiting and light and ventilation. This could be a time and cost saving endeavor to avoid non-compliant code build outs. If there are existing illegal units in a building, owners should work with a design professional to render these legal.
New tenants have signed leases, but not yet moved in.
2. The conceptual backyard homes
I was surprised and excited to see architects at Focus Construction & Development and bKL Architecture get together to design prototype backyard homes for a costing exercise. Neither of those firms were ones I expected to discuss ADUs, but Vic Howell (Focus) sent me their report that analyzes the viability of backyard homes to be built and rented affordably and serve as the offsite component of a development’s ARO obligations.
The study concluded that a two-story backyard home could be constructed for $192,000, and that prefabricating it could lower that cost. They also recommended increasing the proposed ADU ordinance’s 700 s.f. floor area limit for backyard homes (interior ADUs would be limited by the existing building’s size, and the property’s zoning district FAR standard).
The Focus-bKL design and construction team recommended increasing the hypothetical and proposed limit of 700 s.f. for backyard homes because to accommodate a two-bedroom offsite ARO unit the unit would have to be at least 750 s.f. large, according to the ARO standards.
I’ll remind readers that the floor area limit is relative to the lot size, and 700 s.f. is only achievable for lots with single-unit houses that are at least 33' wide or 166' deep. A property with a multi-unit house could have slightly smaller dimensions and allow for a 700 s.f. backyard home. The standard lot size is 25' wide and 125' deep. Use the zoning worksheet the Booth Hansen architecture firm created to estimate the maximum size of a backyard home on your residentially-zoned lot.
Tim Anderson and Bhavin Pardiwala (Focus), and Tom Kerwin, Danielle Tillman, Daniela Sesma (bKL) also worked on the study.
3. Backyard homes waiting for re-legalization
David Schwartz and David Wallach co-founded Granny Flats Chicago to sell and build off-the-shelf backyard homes once the ADU legislation is adopted and effective. The company has three designs, and two pre-orders (since we talked three weeks ago). Companies like this exist all over California, Oregon, and Washington, three states that allow ADUs statewide.
The smallest model — called The Nanna — has 460 s.f. of floor area, a 12' ceiling height, and uses a sleeping loft to maximize floor space in a short building that includes a garage. Schwartz said, “I think we can deliver them for $150,000, including the foundation and appliances.” That price doesn’t include the utility connections, which Schwartz estimated to cost between $10,000 and $20,000.
The “Granny Flats” are planned to be quick to build and have good insulation by using a panel insulated wall system from Wally Walls, based in Kenosha. Laszlo Simovic Architects, one of the most prolific residential architecture firms in Chicago based on the number of permits issued, designed the backyard homes.
The most exciting thing Schwartz told me about their company’s intention is that they are talking to lenders to create a financing product for homeowners to fund a Granny Flat. In the ULI Chicago task force for ADU policy, we recognized that funding and finance would be a huge hurdle, and that existing loan products (like a construction loan or a HELOC) may be insufficient. Schwartz said it’s possible that a lender could make a 10-year interest-only loan that’s based on an appraisal that considers the post-construction property value. An interest-only loan has much lower monthly payments, but requires repayment of the principal in one lump sum — presumably the rental income would be saved up to pay off the principal after a few years of renting.
What kind of ADU do you want to build? Peruse Chicago Cityscape’s ADU resources or contact us with your questions. Double check the Chicago Cityscape map of ADU supporters — it hasn’t changed since the hearings in July — and email your alder if the ward isn’t shown in green.
P.S. We created a new Property Finder map for brokers and developers to find Chicago properties that are eligible to add ADUs.
Get a look at new basement ADUs in Bronzeville + 2 other projects was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
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