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Why More ‘Transit-Oriented Development’ Could Mean Lower Rent

New rules proposed by the mayor would allow for increased density and relax parking requirements. The goal is lower rents and more affordable housing, but issues of equity fall along familiar geographic lines.

1611 W. Division St.: 99 units, not a single parking space   Photo: Abel Uribe/Chicago Tribune

Mayor Rahm Emanuel last week introduced a new transit-oriented development ordinance, the second in as many years and a much bigger step forward over the last one, which passed in 2013.

Phrases like “transit oriented development” or its acronym, TOD, tend to make people’s eyes glaze over, but it could have profound effects on what the city looks like—though not as much as some would like—and how we live in it. So here’s a simple way to look at it.

In much of Chicago, new residential construction must have one off-street parking space per unit. Consider what that means. A parking space, plus the aisle needed to get into it, is a couple hundred square feet. That’s about half the size of some studio apartments, and it comes at a cost: around $4,000 (for the most basic lot space) to almost $40,000 (for a partially below-garage space). Unless a developer tries selling the spaces, that expense—which can be a couple years worth of rent to recoup—gets baked into rent, whether you have a car or not. It also can mean fewer units, which can mean higher prices still.

“This is an affordable-housing strategy,” Kyle Smith, who manages TOD work at the Center for Neighborhood Technology, told me. With parking costs, “it’s harder to make a building with an affordable-housing subsidy cancel out.”

Nearly all households have at least one car in many Chicago neighborhoods—but not all of them. Car ownership drops off steeply near the lakefront. East of the Red Line, car-free households represent about 25-50 percent of all households almost all the way from the far Southeast Side to Evanston. Unsurprisingly, those car-free households also cluster by el stops. Almost every stop on the Brown Line, for instance, is adjacent to a census tract with an above-average percentage of carless households (above 25 percent).

Beyond that, the city has to be aware of current trends. In 2000, 14 percent of Chicago households didn’t own a car. In 2010, it was a quarter; it’s probably higher now.

So in 2013 the city passed what Streetsblog Chicago called a “watered-down” ordinance. Buildings could offer one parking space for every two units if they were 600 feet from a rail station, or 1,200 feet from a rail station in a “pedestrian street,” or P-street zone. That’s not really very far: a bit over a tenth of a mile and a bit less than a quarter-mile, respectively both less than a five-minute walk, which is generally considered the average of what a pedestrian will walk before driving. It was a pretty conservative standard for a walk to transit.

The first thing the new proposed ordinance does is double those measures, to a quarter-mile and a half-mile from rail stops in non-pedestrian and pedestrian zones. Then a development could get rid of the parking requirement altogether with bike parking, on-site bike share, or on-site car share.

That’s been getting a lot of attention, because the media love a cars versus bikes frame. But there are bigger things in play—literally. In much of the city, buildings in denser areas have to have what’s called a floor-to-area ratio (FAR) of three or less. One building parcel times three floors equals a FAR of three, effectively a limit for density. Here’s a map of zoning-allowed density in Chicago; not much of the city can get very dense.

Under the new ordinance, including a certain percentage of affordable housing would allow buildings in 3-FAR zones to go above that density—up to a FAR of four if 10 percent of the building contains affordable housing.

“I think what’s great about the ordinance is that there’s a sliding scale for affordable housing—more density means more revenue,” Smith says. “It’s something developers have told me that they need.”

But the change to density has come under criticism for being too conservative still—and falling along familiar geographic boundaries. Smith thinks the city could go farther with the ratio changes. Daniel Kay Hertz points out that very little of the city has 3-FAR zoning, even around transit stops, so that density change won’t apply to as many transit-proximate areas as might make sense.

And Hertz has also documented that the North Side has more pedestrian-zoned streets than the South Side. Fewer P-streets  means less area eligible for transit-oriented development incentives. For example: citywide, 1.1 square miles qualify for the “density boosts.” (No, it’s not a lot; 9.24 square miles of the city qualify for parking reductions, or about four percent.) Of that area, 0.21 square miles are in the Near West Side alone. Add the Near North and Near South sides, and that’s about a third of those 1.1 square miles. All the other South and West side neighborhoods outside the downtown area, combined, make up about a third of the area eligible for density boosts.

“When you permit more density and less parking,” Smith says, “from a project point of view, it’s easier to do a project at lower rent levels. What you put in the zoning code sends a message about what’s important.”

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