Council Passes Downtown Zoning Reform Amid Developer Pushback

The Chicago City Council voted 32-18 Wednesday to approve sweeping zoning reforms that will fundamentally reshape downtown development over the next decade, despite fierce opposition from real estate developers and construction unions.

The new ordinance, championed by Alderman Maria Santos (25th Ward), establishes a 600-foot height cap on new residential towers in the Loop and River North while mandating that developments over 100 units include 15% affordable housing or pay into a city fund. The changes take effect January 1, 2025.

“This isn’t about stopping growth—it’s about ensuring that growth serves all Chicagoans, not just wealthy investors,” Santos said during Wednesday’s heated four-hour debate. “We’ve seen too many luxury towers rise while working families are pushed further from the city center.”

The ordinance represents the most significant zoning overhaul for downtown Chicago since the 2004 Central Area Plan. It comes as the city grapples with a housing affordability crisis that has seen median rents in downtown neighborhoods increase 34% since 2019, according to city data.

Under the new rules, developers seeking to build above the height limit must demonstrate “exceptional public benefit” and receive approval from both the Plan Commission and City Council. Projects approved before the ordinance takes effect will be grandfathered under current regulations.

The Chicago Association of Realtors and several major development firms lobbied aggressively against the measure, arguing it would stifle investment and reduce the city’s tax base. Construction unions also opposed the ordinance, fearing it could limit job opportunities.

“This sends exactly the wrong message when Chicago is competing with cities like Austin and Nashville for development dollars,” said James Hartwell, executive director of the Chicago Development Council, in testimony before the vote. “Height restrictions are a 20th-century solution to 21st-century challenges.”

Supporters of the ordinance include housing advocacy groups, several neighborhood organizations, and progressive aldermen who argue unchecked development has contributed to displacement and gentrification pressures throughout the city.

The measure gained momentum following a Chicago Gust investigation last year that found 78% of new downtown residential units were priced above $300,000, well beyond the reach of median-income Chicago families. The series also documented how luxury tower construction had accelerated the closure of affordable housing options in adjacent neighborhoods.

Alderwoman Santos worked for 18 months to build support for the ordinance, holding more than 40 community meetings and negotiating compromises with moderate council members. The final version includes provisions that were not in the original proposal, such as allowing developers to meet affordable housing requirements through off-site units within a three-mile radius.

The height restrictions will primarily affect the Loop, River North, River West, and portions of the Near South Side. Existing zoning in neighborhoods like Lincoln Park and Gold Coast remains unchanged, though the affordable housing mandate applies citywide to projects over 100 units.

Mayor Brandon Johnson, who campaigned on affordable housing issues, endorsed the ordinance last month after initially remaining neutral. His support proved crucial in swaying undecided aldermen, according to City Hall sources.

“Housing is a human right, and this ordinance helps ensure our development policies reflect that principle,” Johnson said in a statement following the vote.

Several major projects currently in the planning stages may be affected by the new rules. The proposed 720-foot residential tower at 300 N. Michigan Avenue would need to seek special approval, as would the mixed-use development planned for the former Chicago Tribune printing plant site.

Developers have until December 31 to submit applications under current zoning regulations. The city has already received 23 applications for projects over 600 feet since the ordinance was introduced in September, according to the Department of Planning and Development.

Real estate industry analysts predict the ordinance could reduce new construction permits by 15-20% in the first year, though supporters argue this reflects a return to more sustainable development patterns.

The ordinance also includes provisions aimed at improving transparency in the development approval process. Developers must now hold public meetings before submitting applications for projects over 200 units, and the city will maintain an online database tracking all major development proposals.

Opposition aldermen vowed to monitor the ordinance’s economic impact closely. Alderman Robert Kim (40th Ward), who voted against the measure, warned of unintended consequences.

“I support affordable housing goals, but artificial height limits could push development to suburbs, reducing our tax base when we can least afford it,” Kim said.

The ordinance passed with support from 20 of the City Council’s 25 progressive and moderate members, while most aldermen representing downtown wards opposed the measure. Two aldermen were absent for the vote.

Implementation will be overseen by a new Office of Equitable Development within the Department of Planning and Development, which will receive $2.3 million in funding through the city’s 2025 budget.