Affordable Housing and Transit Series 

Transit-oriented development (TOD) is a planning strategy that promotes high-density, mixed-use (residential and commercial) development centered around public transportation. Focusing development in the vicinity of public transit increases potential ridership and fare revenue while also generating less traffic and household transportation costs for the new development. While TOD can improve access and mobility, it can also increase housing prices, which pose the risk of gentrification. As a result, some governments have turned to equitable TOD (ETOD) as a strategy to ensure a more inclusive environment around transit developments, and affordable housing as a key element of ETOD strategies. 

This is the fourth installment in Eno’s continuing series examining how metropolitan areas across the country are approaching TOD work, including how agencies coordinate across housing, land use, and transportation, what tools they use, and what constraints they encounter on affordable housing and transit policy.  

 

This Week: Chicago 

Issues in Housing Affordability 

According to 2026 data from the National Low Income Housing Coalition, the Chicago region has 56 affordable and available units per 100 eligible households (those who earn at or below 50 percent of area median income), placing it above the national average in rental affordability of 54 affordable and available units per 100 households at that level.  

However, the report shows that for households at or below 50 percent area median income, the Chicago region has a shortage of 226,128 affordable and available housing units, suggesting an affordability and availability crisis. In areas of northern Chicago with high-income families, many buildings with two to four residential units have been replaced with single-family homes, reducing the overall number of housing units. This reflects an increase in demand for housing from families who want more space and can afford a single-family home, and an exclusion of low–income households. Low-income renters in northern areas of Chicago face significant affordability challenges, as the share of affordable units is generally between 0 and 20 percent in those areas. 

In Chicago’s South and West sides, 1950s-era redlining policies aimed at excluding Black and Brown neighborhoods from housing loans set the stage for decades of disinvestment and neglect in those neighborhoods, leading to the demolition of properties and undeveloped vacant lots. In 2023, the city owned 8,800 vacant lots, and over 80 percent of this vacant land was located in predominantly Black neighborhoods. The majority of the city-owned vacant land was zoned for residential use, and yet the housing shortage in the Chicago region persists. According to officials from the Chicago Housing Authority, the gap between the number of households that need affordable housing and the supply of housing is especially wide for residents at or below 30 percent of area median income, many of whom live in the South and West sides of Chicago. 

 

Data from the National Association of Realtors paint a slightly different picture on homeownership affordability in Chicago. According to the National Association of Realtors’ Housing Affordability Index, the Chicago metro area is relatively affordable among ten selected metropolitan areas. The ten selected metro areas are shown below in Table 1 along with their Housing Affordability Index score. The index measures whether the typical family in each region earns enough income to qualify for a mortgage loan on a typical single-family home. An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced single-family home, assuming a 20 percent down payment. The index for the Chicago area was 133, placing it above the threshold for affordability. In other words, among these metro areas, the typical family in the Chicago area earns enough income to qualify for a mortgage on a typical single-family home.  

 

Importantly, the table below is a good measure for comparing single-family homeownership, but it does not capture the full experience of housing affordability in Chicago. Homeowners outnumber renters in the Chicago area, with 65 percent of households owning a home and 35 percent renting a home. However, the index does not include home ownership of duplexes or triplexes, nor does it describe the affordability differences in geography. Wealthy households in the north and northwest of Chicago can afford single-family homes, but lower-income households in the West and South sides of Chicago are less likely to afford a single-family, duplex, or triplex home.  

 

Table 1. Housing Affordability Index 

Metropolitan Area	Index (2022)
San Francisco / Bay Area	47
Seattle	78
Denver	80
Northern New Jersey: New York-Newark-Jersey City	81
Salt Lake City	83
Austin	94
Raleigh	106
Chicago-Naperville-Elgin	133
Minneapolis-St. Paul-Bloomington (MN-WI)	141
Huntsville	142
Southern New Jersey: Philadelphia-Camden-Wilmington	144

 

 

RTA’s TOD Program 

The Chicago area has three large transit agencies. The Chicago Transit Authority (CTA) provides rail and bus services within the city and nearby suburbs, Metra provides commuter rail services for the region, and Pace provides bus service for the suburbs and paratransit for the entire region. The Regional Transportation Authority (RTA) coordinates the Chicago region’s transit system, oversees its financing, and conducts regional planning for the six counties of Northeastern Illinois.  

(Note that in June, the RTA will be replaced by a new agency, the Northern Illinois Transit Authority.)     

 

The RTA engages in TOD work through its Community Planning program, which provides funding and technical assistance to local governments to help foster the growth of “sustainable, equitable, walkable, and transit-friendly communities.” Since 1998, the RTA has allocated funds through its annual Community Planning program to more than 200 transit-related projects around the region. Funding comes from RTA, federal, and local funding sources, and most of the project work is performed by consultants.  

 

Originally, the Community Planning program focused on creating densely populated walkable communities with a mix of uses with little emphasis on affordable housing. In recent years, however, RTA has shifted to the term Equitable Transit Oriented Development (ETOD), rather than TOD, recognizing the region’s affordability and attainability housing crisis. The program prioritizes funding for the many economically disconnected and disinvested communities in the Chicago area. Examples of eligible projects include drafting ETOD plans and conducting transit corridor studies. The program also supports implementation initiatives, including organizing and hosting developer discussions and assisting with zoning code updates. 

 

The RTA’s role in TOD work varies within the Chicago area. RTA-funded Community Planning Projects located in the City of Chicago are led by the city’s planning and transportation departments and by CTA. In smaller communities with limited staff, an RTA project manager often works directly with the mayor or the town’s administrator and provides ongoing assistance, including help with procuring and managing consultants. The Chicago metropolitan area consists of more than 250 municipalities that have a wide range of resources and technical capabilities.  

 

The RTA board does not formally approve any municipal plans, but when the RTA provides funding for a municipality’s study (e.g., to prepare an ETOD plan), RTA staff reviews and provides comments on the plans to ensure that they are supportive of transit and that recommendations are realistic and support ETOD goals. 

 

The City’s ETOD Policy 

The City of Chicago adopted a TOD ordinance in 2013, and since then the city has been encouraging TOD across the transit system. Early TOD activity, however, was largely concentrated in the North and Northwest sides of Chicago, leaving the South and West sides without much TOD. 

 

In 2021, the Chicago Plan Commission unanimously adopted an ETOD policy plan, which established equity as a guiding framework for TOD initiatives moving forward and laid out the city’s ETOD goals. These goals include attracting investment near transit in disinvested communities, especially communities of color; preventing displacement in communities facing rising housing costs; and promoting affordable housing options near transit in low-affordability communities – all while creating more walkable, people-centered neighborhoods and closing socioeconomic gaps between neighborhoods that are predominantly people of color and those that are predominantly white.  

 

The city reinforced its ETOD policy by passing the Connected Communities Ordinance in 2022, which implemented many recommendations from the 2021 ETOD Policy Plan. Key provisions include: 

• Extending ETOD incentives to a 4-block radius from rail stations and 2-blocks from additional strategic bus corridors. 

• Implementing pedestrian-safety standards on new construction near rail stations. 

• Strengthening incentives for the provision of on-site affordable units in ETOD projects. 

 

To put its ETOD efforts into practice, the city established an ETOD Pilot Program to support new developments that follow the Connected Communities Ordinance. Several of the selected projects in the pilot program are located in the South and West sides of Chicago, reflecting the city’s move towards investing in historically disadvantaged neighborhoods of color.  

 

 

City of Chicago’s Zoning and Parking 

Zoning 

The City of Chicago employs inclusionary zoning to promote affordable housing. The Affordable Requirements Ordinance requires residential developments with 10 or more units to provide a portion of the units as affordable housing (ranging from 10 to 20 percent depending on the type of project). The Connected Communities Ordinance also ties density bonuses to affordability. A development is eligible for the Affordable Housing Zoning Bonus if the developer or property owner plans to build all of the required affordable housing units on-site.  

 

Parking 

A key part of Chicago’s ETOD policy is flexibility on requirements for off-street parking near CTA and Metra stations. Off-street parking mandates are eliminated for projects located within a TOD area if half or more of the dwelling units are affordable. 

 

The city also streamlined the process to reduce parking for eligible developments. Under previous TOD ordinances, projects required a Special Use permit from the Zoning Board of Appeals to have a 50 percent reduction in parking. Under the city’s Connected Communities Ordinance, eligible projects only need to submit a request for an “administrative adjustment” to reduce parking by 50 percent and up to 100 percent. Additionally, the ordinance expands eligibility for parking reductions from developments located a quarter mile from CTA and Metra stations to those located a half mile from transit stations.  

 

The city further reinforced parking reductions with a development incentive. Through the Connected Communities Ordinance “parking swap” bonus, each parking space reduced compared to the baseline non-TOD parking requirement allows a development to use an additional 350 square feet of floor area without counting against floor-area-ratio caps.  

 

Parking at Metra Stations 

Metra’s involvement in TOD depends on the project type, location, and land ownership around stations. One approach the agency uses to promote TOD is swapping land with municipalities. For example, a municipality might own property adjacent to a station with commuter parking, while Metra owns a parking lot on nearby property more appealing for residential use. If Metra and the municipality swap land, then the community engages with potential developers on building a residential or mixed-use development on the previously Metro-owned land. In exchange, Metra gains control of the parking facility that had been owned by the municipality to ensure that it remains in commuter use. This also ensures the more developable properties are made available to the municipality for TOD. 

  

The agency’s approach to TOD is consistent with its evolution toward a regional rail service model, focused on providing regular rail service for a wider ridership base beyond the traditional commuter. While traditional commuters park at Metra stations in the morning and return after work, TOD residents are more likely to use the railroad throughout the day and on weekends. Metra also understands that affordable housing can be an important element of successful TODs, but is not actively advocating for it. The agency considers that a topic that should be left up to communities. 

 

An important consideration for Metra’s planners is whether potential development could have any negative impact on parking. Metra wants to ensure that parking capacity will meet expected long-term demand and that stations can accommodate passengers. Another consideration for Metra is minimizing total travel times for commuters, especially if a parking deck replaces a surface lot as part of a redevelopment project. For instance, if Metra customers have to drive to an upper level of a parking deck located three blocks from a station, they might be deterred from traveling by train. 

 

Barriers to TOD and Affordable Housing 

Perceptions of Affordable Housing 

The term “affordable housing” often has a stigma associated with it. Communities are more open to allowing rental apartments instead of limiting housing to owner-occupied homes, but many still prefer market-rate units over affordable units. In some communities, opposition may be influenced by racial discrimination, which can shape resistance to affordable housing proposals. 

 

Parking 

Some suburban municipalities do not want to reduce parking requirements and are wary of increasing density in station areas, if density and reduced parking requirements impact parking availability around stations. In 2025, the Illinois state legislature passed the “People Over Parking Act,” which prohibits municipalities from enforcing minimum parking requirements for developments near transit stations and high-frequency bus routes. 

 

Key Lessons 

ETOD as an equity tool 

• Historic disinvestment resulting from racially charged redlining has left many neighborhoods with vacant lots and a lack of development, contributing to the housing affordability crisis. 

• ETOD programs that support and prioritize development and housing in traditionally disadvantaged areas can close the gap left by decades of underinvestment. 

 

Public Agency Support 

• Municipalities are responsible for land use, zoning, parking, and development decisions. But smaller municipalities often require additional planning and technical support to pursue ETOD. Regional public agencies like RTA can provide planning and technical assistance to smaller communities. 

 

Parking and Zoning 

• Reducing or eliminating parking mandates encourages developers to build additional housing or amenities in place of parking spaces, but such policies face challenges in car-dominated communities.  

• Tying affordable housing requirements to zoning policy, like the Affordable Housing Bonus, ensures that zoning codes align with affordable housing goals. 

• Land swaps between transit agencies and municipalities encourage the development of underutilized surface parking lots.