The Chicago City Council Committee on Housing and Real Estate has passed an ordinance to the full council that will legalize the construction and conversion of basement and coach house apartments in five “pilot areas” located on the city’s North, Northwest, South, Southwest and West sides for a three-year trial period.

It enables homeowners to legally build new coach houses for the first time since they were banned in 1957. Apartment building owners will be allowed to convert attic and basement space into new units.

The ADU ordinance was first proposed in May to introduce more housing at a time when inventory is low. The effort stalled in June when aldermen pushed back for fear that allowing homeowners to add units without zoning approval would limit their ability to vet individual proposals. The proposed also faced concerns that runaway conversions and construction could lead to runaway density in some of the city’s outlying areas and change the character of quieter neighborhoods.

The version of the ordinance that the housing committee approved was amended after discussions between aldermen and staffers with the city housing and planning departments to iron out some of those concerns.

“This ordinance we have before us is not going to solve all the problems of housing that we face in the city of Chicago,” ordinance sponsor and housing committee chair Harry Osterman (48th) said during the committee meeting. “It is one tool among many — a tool private homeowners and property owners can use to add units that by nature are affordable.”

Ald. Raymond Lopez (15th) cast the sole dissenting vote. Lopez argued that the ordinance would effectively shield some property owners who illegally turned their basements into housing units.

The five pilot areas were drawn to present a representative sample of the various contexts that would be affected by the addition of carriage house construction and basement conversions. Language was added to the original ordinance to make Low-Income Housing Trust fund vouchers more widely available to help low- and moderate-income households with building, rehabbing and preserving conversion units. The city would have the ability to add more pilot zones in response to demand in other neighborhoods.

The city will begin accepting applications for new coach houses and conversion units on May 1, 2021. The ordinance will give city housing and planning officials until May 31, 2024 to report back to the council on whether the pilot zones should be kept, expanded or eliminated.