Chicago politics and supply
- A Chicago Tribune editorial says city politicians publicly lament rising rents while opposing apartment development and tightening rules. - It singles out city council resistance and union-linked constraints as key factors limiting new housing supply. - That political friction keeps deliveries muted and raises execution risk for multifamily projects in Chicago (chicagotribune.com).
Chicago’s rent debate is colliding with City Hall’s own housing rules, as a stalled 2,451-unit apartment plan becomes a case study in how supply gets choked. (therealdeal.com) At 700 West Chicago Avenue in River West, Onni Group has proposed four towers with 2,451 apartments, including nearly 500 affordable units, on a 7.1-acre site near Bally’s planned casino. The Chicago Plan Commission approved the project in June 2024, but the City Council zoning process kept slipping in 2025. (therealdeal.com, therealdeal.com, costar.com) The immediate fight was not over height or traffic. Service Employees International Union Local 1 pressed Onni to sign a labor agreement covering janitorial, security and door staff, and Alderman Walter Burnett, who chaired the zoning committee and represents the ward, deferred the vote while the sides argued. (therealdeal.com) Chicago’s housing politics already gave aldermen unusual leverage over development before this project hit a labor impasse. In November 2023, the U.S. Department of Housing and Urban Development said Chicago lawmakers’ use of aldermanic prerogative let council members control “if and how” affordable housing gets built in their wards. (wbez.org) City Hall has tried to narrow that custom without eliminating it. On May 20, 2019, Mayor Lori Lightfoot signed an executive order directing departments to end aldermanic prerogative in mayor-controlled administrative decisions while preserving aldermanic input, but zoning fights at the council level remained. (chicago.gov) The supply backdrop is getting tighter. MMG Real Estate Advisors said Chicago multifamily starts fell from 5,606 units in 2023 to 3,625 in 2024, and projected 2025 completions at 5,203 units, down 40% from 8,633 in 2024. (mmgrea.com) That slowdown is showing up in rents and occupancy. MMG said Chicago-area renters absorbed nearly 11,000 units over the prior year while just 6,700 delivered, pushing occupancy to 95.6% in the first quarter of 2025, with rents up 3.3% year over year. (mmgrea.com) Chicago has also added new rules aimed at preserving existing housing in fast-changing neighborhoods. The Northwest Side Preservation Ordinance, approved in September 2024, created a Tenant Opportunity to Purchase Act and raised demolition surcharges in the Pilsen and 606 pilot areas to $20,000 per unit and $60,000 per building, up from $5,000 and $15,000. (chicago.gov) The city has paired those restrictions with some pro-supply changes. Chicago first approved accessory dwelling units in 2020 and expanded the ordinance citywide in September 2025, reopening the door to basement apartments and coach houses that zoning had largely barred since 1957. (chicago.gov) The result is a housing market where officials are trying to preserve existing units, add smaller ones and negotiate labor standards while large apartment projects still face long political gauntlets. In Chicago, the argument over rent now runs straight through zoning committee calendars, ward politics and whether towers like 700 West Chicago can get built at all. (chicago.gov, chicago.gov, therealdeal.com, mmgrea.com)
