Chicago Ends Parking Minimums for Most New Developments

In a significant shift in urban planning policy, Chicago has eliminated minimum parking requirements for most new residential and commercial developments in transit-served locations. This change, which takes effect in September 2025, represents one of the most substantial zoning reforms in Chicago’s recent history.

For property owners, developers, and businesses, this creates new opportunities—and potential challenges—in how properties can be developed throughout the city.

What Chicago’s Parking Minimum Changes Mean

Chicago has eliminated parking minimums for most new residential and commercial developments located in “Transit-Served Locations,” which are areas within a quarter-mile of a CTA bus corridor or a half-mile of a CTA rail station.

This means developers in these areas are no longer required to include a specific number of parking spaces in their projects, providing greater flexibility in how they utilize their property.

The reform primarily targets areas close to public transportation, recognizing that residents and businesses in these locations often rely less on personal vehicles. Instead of mandating parking spaces that might go unused, this policy shift allows developers to determine parking needs based on market demand rather than rigid requirements.

Key Details of the New Ordinance

The new rules apply specifically to areas designated as “Transit-Served Locations,” which include:

• Properties within a half-mile of CTA or Metra rail stations
• Properties within a quarter-mile of high-frequency CTA bus corridors
• Most areas within Chicago’s downtown districts

These locations were chosen strategically to encourage development where residents and visitors have multiple transportation options beyond private automobiles.

What Has Changed

Under the previous zoning code, developers were required to provide a minimum number of parking spaces based on the size and type of development. For example, residential buildings typically needed to provide at least one parking space per unit, regardless of the building’s location or target demographic.

The new ordinance:

• Eliminates mandatory parking minimums in transit-served locations
• Maintains existing parking maximum caps to prevent excess parking
• Preserves accessibility requirements for ADA parking spaces
• Still allows developers to include parking if desired for market reasons

According to The Chicago Tribune, the reform introduced by 1st Ward Alderperson Daniel La Spata “passed with broad support” and will apply to an estimated three-quarters of the city.

Benefits for Property Owners and Developers

This reform offers several potential advantages:

1. Cost Reduction: Constructing parking spaces costs approximately $67,500 per underground space in Chicago, according to city estimates. Eliminating this requirement can significantly reduce construction costs.
2. Space Optimization: Land previously dedicated to parking can now be used for additional housing units, commercial space, or amenities like green space.
3. Design Flexibility: Architects and developers have greater freedom to design buildings that better fit neighborhood contexts without accommodating large parking areas.
4. Adaptive Reuse Opportunities: Historic buildings that lack parking facilities can be more easily repurposed for new uses without requiring variances or special approvals.

These benefits could make previously infeasible projects viable and allow for more creative approaches to urban development, potentially resulting in more vibrant, diverse neighborhoods throughout Chicago.

Impact on Different Property Types

The effects of this zoning reform will vary widely depending on property type and location, with each category of real estate facing unique opportunities and considerations.

Residential Properties

For residential developers, the changes mean:

• More units can potentially fit on the same lot
• Lower construction costs may translate to more affordable housing
• Buildings can be designed with different resident profiles in mind (car-free households vs. car owners)

For existing residential property owners, this could lead to:

• Increased property values in transit-rich areas
• New development potentially increasing housing supply in your neighborhood
• Changes to street parking dynamics as new buildings may include less off-street parking

Commercial Properties

Commercial property developers and owners may experience:

• Lower barriers to entry for establishing new businesses in existing buildings
• More flexibility in how commercial space is utilized
• Potential for more walkable, vibrant commercial districts as space formerly used for parking becomes active uses

Mixed-Use Developments

The reform particularly benefits mixed-use projects by:

• Allowing for shared parking arrangements among different uses
• Creating more economically viable projects through space optimization
• Encouraging ground-floor retail with residential or office above

​​Mixed-use developments stand to gain the most from these changes, as they can now more easily balance various uses without being constrained by rigid parking formulas that don’t account for complementary usage patterns.

Potential Challenges and Considerations

While eliminating parking minimums creates opportunities, it also introduces new considerations:

Market Realities

Despite the regulatory change, market demand for parking still exists in many areas. Developers will need to carefully assess:

• Target demographic preferences regarding car ownership
• Neighborhood street parking conditions
• Competition from nearby developments that include parking amenities

Community Response

Some neighborhoods may express concerns about:

• Increased competition for on-street parking
• Traffic patterns as new developments emerge
• Changes to neighborhood character

Working proactively with community organizations and aldermanic offices remains essential for project success.

Financial Considerations

Lenders and investors may have their own parking expectations that differ from the new regulations. Developers should consider:

• Lender requirements regarding parking ratios
• Market research to justify reduced parking plans
• Potential impact on rental rates or sales prices

Financing remains a critical consideration, as many lenders still have conventional expectations about parking that may not align with the new regulatory environment.

Frequently Asked Questions

Does this change affect existing buildings or only new construction?

The ordinance primarily affects new construction and substantial renovations. Existing buildings with established parking are not required to change, though property owners may have new opportunities to repurpose underutilized parking areas.

Can developers still build parking if they want to?

Yes. The ordinance eliminates requirements for minimum parking, but developers can still include parking spaces based on market demand, target demographics, or business needs. As 1st Ward Alderperson La Spata told the Chicago Tribune, “It makes it easier to build. It makes it more affordable to build. It gives much more flexibility to developers to add parking in ways that meet the market.”

Will this affect my ability to park on the street in my neighborhood?

The impact on street parking will vary by neighborhood. Areas with high development activity and already limited street parking may experience increased competition for spaces. The city’s goal is that reduced parking requirements will encourage more residents to use public transportation, potentially offsetting some of the increased demand.

What if my property is not in a transit-served location?

Properties outside transit-served locations still need to comply with existing parking requirements, though developers can apply for administrative adjustments or variations through the Zoning Board of Appeals if they wish to reduce parking.

How This Change Affects Your Development Plans

The elimination of parking minimums represents an important opportunity to reimagine urban development in Chicago, but success requires careful planning.

For specific guidance on how these changes apply to your property or development plans, contact Birchwood Law. Our team helps property owners, developers, and businesses make the most of Chicago’s evolving zoning landscape.