Chicago’s downtown housing program is targeting more than just public land
Chicago city planners are trying to solve a national problem that officials in many cities talk about but rarely tackle on a large scale — turning idle land into “downtown” housing in neighborhoods that have seen decades of disinvestment.
In the third round, planners and city officials have the initiative to sell parcels of surplus land for small housing, rather than marketing these parcels for parking, speculation or short-term budget plugs.
In a small but growing group of cities, planners are committed to repurchasing remaining public land for housing to increase supply and improve accessibility. Seattle, San Francisco, Los Angeles and Atlanta are among those startups, but they focus on more affordable or supportive housing, often rentals.
Chicago’s program supports buyer homeowners who earn up to 140% of the median income, or $134,400 a year for a family of two, otherwise known in the residential area as “middle class” or “working class homes.”
Windy City officials started the program in late 2024, when the Department of Planning and Development committed $75 million to the Missing Middle Infill Housing program. That funding is part of a $1.25 billion bond issue for economic development and housing.
“These developments will put the City’s vacant lots to productive use, bringing attractive and much-needed housing to neighborhood blocks while creating opportunities for homes that build community wealth,” Planning and Development Commissioner Ciere Boatright said in a statement.
Chicago compliance test
The first round in January 2025 included three developers, 35 vacant lots, and 40 buildings. From those parcels, the developers built a total of 115 market-rate, for-sale units. Last August, the second selection process led to the naming of developers with a total of 93 market-priced, for-sale homes spread over 31 buildings and 30 vacant urban lots.
In the latest phase, Chicago officials approved 35 small multi-unit buildings that will add 99 new properties to vacant parcels. They will close 24 city-owned locations. The total cost of the project is estimated at $35.5 million, a huge investment in blocks that have been neglected for a long time.
Each site is located in areas of the South and West Side where disinvestment and vacant land have long been conspicuous parts of the everyday landscape.
City leaders are donating the land itself for $1 to offset development costs for selected developers. The city also makes about $150,000 per unit available for construction and site preparation grants.
The rebates are intended to make sales, multi-unit housing released in areas where private developers are struggling to make projects work.
Housing, mostly small walk-up buildings and two- to six-unit apartments, is aimed at the “middle” of the market in these areas, replicating the neighborhood scale that fills many Chicago neighborhoods.
Selected developers include Citizens Build a Better Community, Westside Community Group, Garfield Together Partnership, TRUDelta again Urbanism LLCeach is responsible for including two apartments, three apartments and four apartments in city-owned residential properties.
In the McKinley Park neighborhood, Urbanism LLC is planning five two-story apartment buildings. The other four groups formed in the East and West Garfield Park areas.
For years, policy researchers have urged local governments to strategically use public property as a tool for housing affordability. They call this one of the most direct ways to increase housing supply without raising new taxes or fees for residents.
However, the trend remains unfavorable, as many cities are sitting on portfolios of empty or underutilized parcels in many departments. An analysis by the Lincoln Institute of Land Policy shows 276,000 buildable public acres nationwide in transit-oriented urban areas. Depending on density, that would be enough to build 2 to 7 million homes, George McCarthy, the Center’s president, wrote in November.
Those parcels are often sold short to the highest bidder or left in limbo for years due to administrative hurdles. Studies of public land systems point to many broken barriers, including divided ownership between agencies and lengthy land acquisition processes.
Officials also face pressure to raise quick, one-time sales revenue instead of prioritizing long-term public benefits like affordable housing. Even if land is earmarked for housing, inconsistencies in subsidy programs and long permitting delays can delay or halt projects, often long enough to render them unviable.
Those problems undermine the promise that free or cheap land will quickly translate into new homes for residents.
Some big cities are channeling more land toward housing
In Washington, DC, the Disposition of District Land for Affordable Housing Act requires 20% to 30% of units on surplus sites to be affordable, and the city is targeting high affordability near major transit facilities.
In Northwest, Seattle city planners are directing departments to prioritize surplus and underutilized city land for affordable housing and to donate large sales proceeds to housing funds.
The California Surplus Land Act became law in 1968 and was revised in 2023 to facilitate the acceleration of surplus public land for affordable housing, with strict long-term rental restrictions.
San Francisco city officials targeted large, underutilized public lands, including the 17-acre Balboa Reservoir, for mixed-income housing. Los Angeles is using surplus land tied up in transit projects and other income-restricted housing.
In Southeast Atlanta, planning leaders provide publicly owned land for affordable housing and drive programs that accelerate development on those sites. The main focus is on rapid housing – quickly built modular units and repurposed shipping containers – for people with a short history of homelessness.
New York City mandates have led to the conversion of surplus public land into thousands of affordable homes through long-term land leases or outright sales. However, critics say the process is slow and cumbersome.
Why Chicago stands out
In contrast, the approach of Chicago planners is notable for its focus on infill, home ownership and neighborhood improvement over individual, headline-grabbing projects. By consolidating projects in targeted areas, the city is a living laboratory of whether public property can help rebuild the fabric of small housing.
That housing fabric historically housed many working-class and middle-class neighborhoods before decades of disinvestment and demolition. Advocates view the plan as a template by which planning stakeholders draw up the city’s portfolio and identify the most reasonable areas for housing.
“This is one of the new ways to open up small developers,” said Ian Tudor, founder of a Charlotte real estate development firm. Decatur Investmentshe wrote on LinkedIn. “Give them the world with costs, proper funding, and clear rules.”
