Evanston’s City Council this week voted to send a proposal to restrict who can own a building with an accessory dwelling unit to the Plan Commission.

The proposal, from Ald. Clare Kelly (1st), would bar creation of new internal or attached accessory dwelling units in buildings that are not owner occupied.

Kelly had initially proposed that the Council adopt an immediate moratorium to that effect, but backed off after city legal staff explained that the moratorium, to be legal, would have to first be the subject of a public hearing by the Plan Commission.

The proposal was sparked by concerns from homeowners near the Northwestern University campus who fear absentee landlords will buy up large homes on their blocks, convert part of the building to an accessory dwelling unit and rent the property to students.

But affordable housing advocates opposed the new restriction — saying it would create another barrier to producing more affordable housing in the city.

The rule change to permit internal or attached ADUs was adopted by the City Council just last fall, and city staff told the Council Monday that only one application to create such an ADU has been received so far.

The commission has been wrestling since last fall with a proposal to repeal a zoning provision that is a long-time favorite of the near-campus homeowners. That’s the three-unrelated rule, which bars more than three adults who aren’t related to each other by blood or marriage from sharing a dwelling unit.

Affordable housing advocates see repeal of that measure as a key step in increasing the supply of affordable housing across the city.

At its last meeting, June 9, the commission edged toward recommending a repeal of the three-unrelated rule, voting 4-1 to ask staff to prepare language for a repeal ordinance but to also come up with answers to various questions about the issue.

One question not yet addressed about Kelly’s proposal is whether a ban on absentee ownership would actually be effective.

As Jennifer Pritzker demonstrated when the city several years ago tried to restrict ownership of bed and breakfast venues to owner-occupants, it’s pretty easy to set up a limited liability company to own a building and have an on-site manager be, say, a 1% owner, while the primary owner remains absentee. An absentee owner of a building with an accessory dwelling unit might easily find a prospective student tenant to enter into a similar ownership agreement.

Also unclear is whether the proposal would bar the sale of an owner-occupied building with an accessory dwelling unit to a new owner who didn’t plan to live there.

If enforceable, such a restriction would presumably reduce the value of properties with accessory dwelling units, by reducing the pool of potential buyers and thus discourage construction of ADUs even by persons who planned to live in the property while they owned it.

The Plan Commission’s next meeting is scheduled for July 14. It’s not clear yet whether the ADU moratorium proposal will be on the agenda for that session.

Bill Smith is the editor and publisher of Evanston Now.

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