Illinois Moves To Boost Housing By Curbing Parking Mandates

Eliminating or reducing parking minimums for new housing developments near public transit has become an increasingly popular policy tool for cities and states across the U.S., with the primary objective of lowering the cost of building new housing. The idea is to create walkable, transit-friendly communities that buyers and renters can better afford.​

In June, Chicago took a step similar to a handful of other cities. Now, Illinois Gov. JB Pritzker has legislation on his desk to sign into law that would eliminate parking requirements for new construction near public transit across the state. The People Over Parking Act positions Illinois to become the fourth state to enact such a reform, following in the footsteps of states like California and Colorado.​

The reform was a key element of a larger bill that has a $1.5 billion funding package for public transportation. It created the Northern Illinois Transit Authority to streamline planning and establish a new funding stream to avert a looming fiscal crisis for the region’s transit agencies.​

The state-level action builds on momentum from Chicago, which in July 2025 became one of the largest U.S. cities to scrap parking mandates for new projects in transit-rich areas. Chicago eliminated parking minimums for most new developments located near its extensive network of Chicago Transit Authority and Metra stations and high-frequency bus routes, a change that officially took effect in September.​

That ordinance allows builders to forgo expensive off-street parking, a significant barrier to creating more affordable, walkable communities. The new state law, set to be effective June 1, 2026, would extend this principle across Illinois to all municipalities, including home-rule communities like Chicago, and apply to any new or renovated development within a half-mile of a rail station or a one-eighth mile of a high-frequency bus route.​

Cost of Parking

For developers, the financial implications are significant. In Chicago, an underground parking space can inflate project costs by an average of $67,500 per space, an expense ultimately passed on to residents through higher rents and sale prices.​

By removing this “one-size-fits-all” mandate, the People Over Parking Act would give builders the flexibility to construct parking based on actual market demand rather than arbitrary requirements. Proponents, including the Metropolitan Planning Council, argue that this will prevent the costly overbuilding of parking in neighborhoods already well served by public transportation.​

“The measure would mean that housing developers would not be given an arbitrary number of parking spots to build, but rather ‘can decide for themselves what the market needs is,’ Adani Sanchez, volunteer for Abundant Housing Illinois, said in March. ‘This is going to be another way to encourage people to use the transit that we already have.'”​

Studies have shown that eliminating parking minimums can significantly boost housing construction. Research in Denver suggested that cutting these requirements could increase housing construction by about 12.5%, adding roughly 460 more homes per year.​

These reforms also encourage the development of “missing middle” housing, such as duplexes and triplexes, by making it feasible to build on smaller, underdeveloped parcels. This “gentle density” can increase the overall housing supply and make neighborhoods more affordable. In Minneapolis, for example, adjusted rents declined by 20% after the city eliminated single-family zoning and parking mandates.​

By untethering development from costly parking mandates, Illinois is betting on a future with more housing, lower construction costs, and more vibrant, transit-oriented communities.​

As seen in other cities and states that have embraced this reform, the goal is to create neighborhoods where a car is an option, not a necessity, thereby lowering development costs and making cities more accessible to everyone.