Chicago’s ADU Expansion: A Pathway to Affordable, Energy-Efficient Housing for Families

Chicago is on the brink of a transformative housing solution: Accessory Dwelling Units (ADUs). Also known as coach houses, in-law suites, backyard homes, or granny flats, ADUs are gaining attention as a vital tool to combat Chicago’s housing shortage. With citywide legislation in motion, more homeowners will soon have the opportunity to build ADUs on their properties, creating flexible, affordable, and energy-efficient housing in every neighborhood.

In a city known for extreme winters and humid summers, comfort and efficiency are paramount. Spray foam insulation, a high-performance material, is quickly becoming a go-to solution for energy-conscious Chicago homeowners. By building ADUs with innovative, sustainable materials, families can ensure long-term affordability, durability, low utility bills, and year-round comfort.

The Evolution of Chicago’s ADU Laws

ADUs were once common in Chicago, particularly before 1957, when zoning changes effectively banned them. In December 2020, the City Council passed a pilot ordinance reintroducing ADUs in five zones: North, Northwest, West, South, and Southeast.

Since then, Chicago has seen promising results. As of 2025, nearly 400 permits have been issued, primarily for basement and attic conversions. The momentum is building: Mayor Brandon Johnson and housing advocates are now calling for the full legalization of housing throughout the city. A City Council vote is expected by late summer 2025, potentially unlocking the ability to build ADUs across all 77 community areas.

Simultaneously, the Illinois state legislature is weighing laws to prevent cities from banning ADUs. Together, these initiatives aim to expand affordable housing while preserving the neighborhood’s character.

Why Chicago Families Are Building ADUs

Whether you’re a homeowner in Lincoln Square, Pilsen, or Englewood, ADUs can meet a wide range of family needs. These flexible housing solutions support multigenerational living, generate passive income, and offer affordable options for young adults or aging relatives.

Aging in Place: The Lakeview Coach House Example

In Lakeview, the Peterman family built a 700-square-foot coach house above their garage for Fiona Peterman’s elderly mother, Louise. Completed in 2023 for around $300,000, the unit allows Louise to live independently, close to family, while contributing rent below market value.

The Petermans describe the arrangement as life-changing, as it avoids costly eldercare expenses and offers a safe, dignified alternative to institutional living. This model is ideal for families who want to care for aging parents without sacrificing their own space.

Creating Income with Backyard ADUs

Many Chicago homeowners are building ADUs to supplement their income. Rents for ADUs typically run hundreds of dollars below market rate, offering tenants an affordable option while helping owners offset mortgage payments or taxes.

Coach houses and basement conversions can also boost property value. In neighborhoods where housing costs are rising, ADUs offer a sustainable way to build wealth while contributing to Chicago’s affordable housing stock.

Helping Adult Children Live Independently

For adult children priced out of Chicago’s competitive rental market, an ADU offers a private, affordable living space close to home. Whether they’re pursuing college, starting a new job, or saving for a home, these small units provide security, stability, and a stepping stone toward independence.

Why Energy Efficiency Is Essential for Chicago ADUs

Building an ADU is only the first step. Operating it affordably and sustainably is equally essential. Chicago’s climate presents challenges, including sub-zero winters, hot summers, and high humidity. Without proper insulation and sealing, heating and cooling costs can erode the financial benefits of ADUs.

Spray Foam Insulation: The Gold Standard

Closed-cell spray foam insulation offers superior thermal performance, high R-values (6-7 per inch), and acts as both an air and moisture barrier. For basement or attic ADUs, it’s an ideal solution that prevents air leakage, mold, and temperature swings.

Benefits of spray foam for Chicago ADUs:

• Year-Round Comfort: Maintains stable indoor temperatures, even in extreme weather conditions.

• Lower Energy Bills: Cuts heating and cooling costs by 20-50%.

• Durability: Lasts decades without settling or losing effectiveness.

• Moisture Control: Essential for preventing dampness and mildew in basement ADUs.

In one Chicago retrofit project, spray foam was paired with a ductless mini-split HVAC system—the result: a quiet, energy-efficient space with energy costs reduced by more than 40%.