Chicago has a market for parking reform

The city’s new reforms will help build more units

Editors note: Zak Yudhishthu writes the excellent Pencilling Out, where this piece was also published.

On July 16th, the Chicago City Council approved an ordinance eliminating parking requirements for almost all new homes built in the city. This reform is the culmination of multiple smaller reforms that the city has passed over the last decade. While it’s great to see the city reduce barriers to new housing, it’s worth asking how much these parking changes actually matter — and whether developers are actually taking advantage of greater parking flexibility.

So far, we know relatively little about this question. Is there a substantial market for new housing development that includes little or no parking? In theory, it’s possible that even after lowering and eliminating parking requirements, developers would still voluntarily build the maximum amount of parking allowed — because the market doesn’t support low-parking development. On the other hand, if prior reforms have led to many developments with fewer parking spots, then parking requirements are indeed costly constraints on building housing in Chicago.

Alongside Steven Vance, founder of the data-focused website Chicago Cityscape, we have collected data on the amount of parking in hundreds of new developments in Chicago to help answer this question. This data shows a clear demand for low-parking housing in Chicago, as developers have widely taken advantage of reductions to the city’s parking requirements. Additional evidence suggests that these new, low-parking buildings won’t create an overload of demand for on-street parking.

From this analysis, we should have two main takeaways. First, Chicago’s existing parking reforms have already been a legitimate and under-recognized success for the city’s housing policy. Second, Chicago’s most recent reforms will meaningfully simplify the process for developers to build housing with very few or no parking spots, while also expanding coverage to a swathe of residential areas with lower-density zoning. As a result, we should expect new housing to continue being built with few or no parking spots. This trend will help reduce construction costs and expand the city’s housing supply.

A brief background on parking requirements in Chicago

Chicago has enforced some kind of parking requirements since the 1940s. Under Chicago’s current zoning code, multifamily housing is generally required to have one parking spot for every residential unit. This has been the baseline requirement for at least a couple of decades, since the city’s zoning code was rewritten in 2004.

The city's first modern zero-parking development (although courtyard buildings built before World War II are also car-free) was enabled by a narrowly written zoning code change in 2012. The building was 1611 W Division St, which replaced a one-story Pizza Hut restaurant next to the Blue Line with 99 apartments — and zero parking spots for residents. A citywide transit-oriented parking relief was adopted in 2015, which had limited geographic application. In 2019, the geography was expanded again.

Zero-parking apartments at 1611 W. Division Street. Photo by Steven Vance.

In July 2022, Chicago’s City Council reduced parking requirements for much of the city’s development by passing the Connected Communities Ordinance. As a result, developments within a half mile of CTA or Metra stations or a quarter mile of high-frequency bus routes would receive a by-right 50% reduction in their parking requirements — meaning that residential buildings don’t need special approval to build only one parking spot for every two housing units.

This covers 73.9% of Chicago’s land area (which also includes cemeteries and parks). Relative to previous policy, the 2022 Connected Communities Ordinance added more bus routes to the parking relief and made more residential zoning districts eligible. It also streamlined the approval process to build even less parking, or no parking at all: developers only needed an administrative adjustment to build even less parking, which is (in theory) a simpler, faster form of approval than getting a zoning change through the City Council.

Chicagoans should care about these reforms. High parking requirements can create a host of issues for new housing development. Parking spots are costly to build, especially if they come in a structured garage; they can add tens of thousands of dollars to development costs. They also constrain new development by taking up large amounts of space. This space carries an opportunity cost, as more square footage dedicated to parking means less square footage for living space. In addition to distorting the costs and layouts of the projects that do get built, parking-related constraints on construction costs and space can also make some new developments altogether infeasible.

New data on parking in Chicago development

To help us understand how new development has responded to lower parking requirements, Steven and I created a dataset tracking the number of new housing units and parking spots in over 900 developments, from 2020 through 2025 — including two and a half years both before and after the start of Connected Communities. This information comes from zoning change applications in Chicago. The majority (though not all) of multifamily housing developments in Chicago must first be granted a zoning change, or go through a bespoke Planned Development process. In these applications, developers report how many new housing units they’re planning to add, and how much parking they will include.¹

This data gives us a perspective on developers’ responses to TOD parking reforms that is both granular and large-scale. While our analysis can’t precisely identify the effect of one particular policy change in Chicago, it demonstrates how developers have responded to current TOD policies, informing our understanding of the market demand for housing that utilizes these reforms.

The headline finding is that parking-light buildings — where a developer is building considerably less than one parking spot for every housing unit they build — have been pervasive in Chicago’s recent housing development.

The chart below shows the distribution of parking-unit ratios for all 502 new residential construction projects in Chicago that received a zoning change since 2020. As these distributions show, while new construction often includes one parking spot per unit, there are also many projects that include substantially less parking.

Separating these developments by their size provides a richer picture. Projects with 10 or more units almost always include less than one parking spot per unit, and the majority build less than .5 spots per unit. At least part of this difference is likely driven by policy: under the Connected Communities Ordinance, areas with RS and RT zoning — where most 1-6 unit housing gets built — did not receive reductions in their parking requirement.

The above data examines new construction. Our data also allows us to look at the parking ratios for 275 residential renovation projects that requested a zoning change in order to add new housing units. Many of these renovations are relatively “incremental” developments: for example, it’s common to add a garden unit to an existing three-flat.

With these renovations, we can’t always tell if a building may have had extra, unused parking spaces beforehand. That said, the great majority of renovations are adding no new parking spots, despite creating new housing units. This nicely illustrates how parking reform creates flexibility for more incremental redevelopment of existing buildings.

Reforms won’t make parking a huge problem

One concern about reducing or eliminating parking requirements, and the resulting shifts in development patterns, is that this allows developers to offload responsibility for parking onto city streets.

In part, this demonstrates the near-impossible standards to which critics often hold new housing development: if a project has many parking spaces, it’s criticized for worsening traffic, but if it has limited parking spaces, it’s criticized for crowding out on-street parking.. Often, individual developments are expected to shoulder the responsibility of managing much larger parking management issues in a neighborhood. But even if we might quibble with the premises underlying these concerns, they are prevalent in conversations around parking reform, and thus worth responding to.

In the scope of this analysis, we can’t say much about how nearby on-street parking is utilized near these developments, nor can we measure how many new tenants have their own cars. However, a few pieces of evidence can help address this concern.

First, consider the following map, which shows the location of all new construction in our dataset with less than 0.5 parking spots per unit (154 projects). By the nature of the Connected Communities ordinance, the city’s new low-parking buildings have been built in areas proximate to transit. This map also confirms that most of these developments are built in areas where residents are substantially less likely to own a car at all.

Additional evidence comes from a 2016 study by the Center for Neighborhood Technology, which showed that many developments in Chicago had excess parking. CNT’s report surveyed 41 multifamily buildings across the city, tracking the number of parking spots provided by the building as well as how much tenants utilized these parking spots. Frequently, more parking spots existed than were used — on average, a third of off-street parking spots were vacant on a typical night. This was particularly true in buildings closer to transit, where parking utilization was well below the baseline requirement of 0.5 spaces per unit.

One more relevant piece of evidence comes from research on San Francisco, where applicants to affordable housing were assigned by lottery to specific buildings. When residents were assigned to buildings with lower parking ratios, their likelihood of owning a car dropped. For each one standard deviation decrease in a building’s parking/unit ratio, households were about 12 percentage points less likely to own a car, even after controlling for a building’s transit access and walkability.

Put another way, when we require buildings to have large quantities of parking, we are encouraging higher rates of car usage, and potentially exacerbating existing congestion issues and competition for curbside parking.

In other words, tenants do not only choose their housing options based on whether they have a car. In part, their transportation decisions are shaped by the housing (and parking) options available to them. It is not guaranteed that building more low-parking buildings, particularly in transit-rich locations, will exacerbate local parking issues. A more positive-sum cycle is possible: with more low-parking buildings, less residents have cars, and instead they help support a vibrant transit system — providing the customer base to help ward off a transit fiscal cliff — and the continued development of walkable amenities.

Suggestions for continued reform

All of this evidence suggests that Chicago’s transit-oriented parking reforms have helped get more housing built, with less costs going towards building parking.

Chicago’s newest parking reform ordinance, passed in July and effective in September, will almost entirely eliminate parking requirements in transit-served areas of Chicago.² Prior to this change, developers needed to receive an administrative adjustment from the city to build anything less than .5 spaces per unit. In theory, this should be relatively quick and easy (and cost $500), but that’s not always true — in some instances, administrative adjustments entail a back-and-forth between developers and the city, creating some uncertainty regarding the time and effort necessary to receive approval.

Yet even under Chicago’s previous transit-oriented parking rules, developers were widely taking advantage of parking relief, and frequently willing to request an administrative adjustment (or, prior to 2022, a more formal zoning change request) to build very low quantities of parking. Now, building low quantities of parking will become even easier.

The biggest impact of the new policy, however, likely comes from expanding the range of zoning categories that are eligible for relief by adding areas with RS and RT zoning. This means that smaller-scale housing developments, typically with 1-6 units, can now be built with low parking ratios. According to an analysis by Steven, this could include about 314,000 existing detached houses and small apartments buildings, and over 17,000 vacant lots.

In short, the city’s latest changes should give us a little more of a good thing in large projects, and potentially make a real difference for smaller-scale projects.

We shouldn’t yet consider parking reform to be complete. The city should reduce or eliminate parking minimums in the remaining parts of the city. Even if these less transit-rich areas have higher car ownership rates, a rigid requirement of one parking spot per unit is still costly. Fortunately, these areas constitute a very small portion of the city.

While these streamlining rules are unambiguously positive, it’s worth being clear-eyed about their limits. Chicago still has major problems with discretionary housing approvals, aldermanic prerogative, and an arbitrary zoning map that blocks multifamily housing in most of the city. Reducing or eliminating parking requirements addresses one arbitrary barrier to building much-needed housing, but stringent by-right zoning and long approval processes continue to be problems. Parking reform is only one valuable component of a broader pro-housing agenda for Chicago.

1. Not every building that is granted a zoning change will ultimately be built, but the effort of applying for the permissions necessary to build a project at least show that the developer initially considered it feasible.

2. The July ordinance has a slight carveout on which transit zones are eligible for relief: Downtown zoning districts, and areas where only Metra is the proximal transit facility, don't receive the full elimination of parking minimums. This covers a very small portion of the city.