In most US cities, new housing developments must receive approval under zoning regulations, which determine what types of and how much housing is built. In many cases, proposed projects undergo local zoning review “by right,” meaning planning departments approve developments that abide by city standards.
But for other projects, the approval process isn’t so straightforward. Some cities use discretionary review processes that mandate public hearings and city council votes for larger-scale investments.
Discretionary review has its benefits. It can enable cities and community members to work with developers to design projects and pursue local goals, such as higher levels of housing affordability, even if the projects do not otherwise meet by-right zoning standards.
But discretionary review also raises concerns. Residents who participate in hearings are not fully representative of their communities, resulting in disproportionate influence by a small group of voices—typically white people and homeowners—over what localities can build. Added review, in turn, slows permitting times and reduces the reliability of the approval process, which may ultimately reduce construction and drive up sale prices. Unsurprisingly, communities with longer permitting times have lower housing affordability.
In this post, part of a broader collaborative project on zoning with the Metropolitan Planning Council, I explore discretionary approval processes in Chicago. I show that three-quarters of large multifamily apartment buildings permitted in the city over the past 18 years have undergone discretionary review. This process—typically required for major investments—may delay construction and ultimately reduce Chicago’s housing affordability.
Chicago’s discretionary review process
In Chicago, most housing projects that undergo discretionary review follow one of two paths: either a zoning change or a planned development (PD) process (which is often paired with zoning changes as well). Chicago requires the PD process for residential projects whose planned heights are at least 80 to 440 feet and include at least 30 to 350 housing units, with exact thresholds depending on the underlying zoning district. PDs are also used for many nonresidential projects, such as large commercial and warehouse facilities, university campuses, and stadiums. Developers proposing a PD project must abide by the underlying zoning density standards and must be in general compliance with other elements of the code.
However, PD projects can raise the price of development because of the extensive time delays and costs associated with the discretionary review process compared with those for by-right review. The city recommends a concept review meeting with the developer, after which the city undertakes its own detailed reviews. Developers must submit a nearly completed plan (PDF), which is far more detailed than required for by-right projects, to the plan commission; receive recommendations from the zoning administrator and department of planning staff; and undergo a public hearing in front of the commission. This process can cost developers tens of thousands of dollars in fees. Then, the city council’s zoning committee must review before the city council finally approves the project.
In total, this process can take more than 250 days—enough time for developers to lose money by holding on to land they aren’t building on, thus increasing overall development costs and reducing project feasibility.
In addition, city councilors—called alderpersons in Chicago—retain considerable informal control, referred to as aldermanic privilege, over projects in their districts. Though the city has recently allowed some projects through without agreement of the ward alderperson, most projects only receive council buy-in after aldermanic approval. Developers typically seek their approval in advance of a city council agreement, which enables alderpersons to request project changes in exchange for their support. These changes have included design alterations or funding allotments, and often, reductions in building height or building size. Just this month, a city council committee rejected a major proposed project after the relevant alderperson announced his opposition.
Once projects are approved as PDs, developers sign a contract with the city to formalize the agreement, and the city changes the zoning map for the relevant land area from a by-right zone into a PD area.
Most multifamily housing development in Chicago requires discretionary review
New PDs have frequently rolled out across Chicago in parallel with new development. More than 13 percent of the city’s land area is now classified as PD, with 608 new PD agreements signed in the past two decades. During that time, about three square miles of land were converted from by-right zoning that allowed residential uses to PD zoning.
I reviewed permits for housing citywide between 2006 and 2024 to identify where new construction has occurred. My review shows that 58 percent of permitted housing units were in PD zones, meaning they undertook this lengthy review process. In fact, 74 percent of housing units in buildings with 10 or more housing units were in PD zones.
Though several thousand units were permitted in smaller buildings through the by-right process in residential and mixed-use business zones, this finding implies that developers seeking to build large multifamily buildings in the city almost always go through the PD process, which may lengthen project timelines and increase costs.
These PD-approved structures are disproportionately located in the city’s central areas, which follows logically given that most high-density projects must be approved under PD rules. Of all permitted housing units in the city’s central areas, 80 percent are in PD zones.
But PD development is common elsewhere in the city, as well. On the North Side, 32 percent of permitted units are in PD-zoned districts, and on the South Side, 44 percent of permitted homes are.
Locations of approved multifamily housing permits
Source: The author, based on an analysis of City of Chicago open data (2006–24)
Notes: Map only includes residential projects with 10 or more planned units.
Questioning the role of discretionary review in the planning process
This analysis shows that apartment developers in Chicago are highly reliant on the PD process to pursue new construction. This development path may increase costs and construction timelines, making some projects financially infeasible. On this front, Chicago is not alone. Cities like Boston and Seattle often use discretionary review to extract public benefits as well.
As Chicago and other cities continue to face an affordable housing crisis, local policymakers would do well to investigate the larger context and implications associated with discretionary review. For instance: Would developers build more housing units if the process to permit them involved less oversight? Does discretionary review increase the sale or rental prices of housing in the city? What changes could help developers build more moderate-scale buildings under by-right zoning processes? Should certain types of buildings—like those with permanently affordable apartments—be exempt from discretionary review? And would cities lose out on other public benefits if they could no longer negotiate with developers for project changes?
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