Chicago Basement Units

[DTB]

I'm just trying to wrap my head around how a property unit being or not being rented matters to Zoning? and How it is not deceptive to say I'm calling it something it is not ( just a finished basement) because if I call it what it actually is, a Dwelling unit, then its Illegal.

Just so I understand, are you calling SFRs with finished basements consisting of a bath, open (living/rec room) area, bedroom(s) and a kitchen ILLEGAL as to zoning because it has an additional dwelling unit?

And are you contending that this is the official position of the City of Chicago?

As we all know this is a very murky gray area in Chicago, that is why I do not report it as black and white.

Housing court can very tricky for the unfamiliar, was able to get $38K in fines waived by removing a basement kitchen in an Auburn Gresham 2 unit I bought. Those fines scared the bejeezes out of the other bidders.

Now 3 years later, the kitchen is back in with the city's blessing and duplexed to the first floor. Is that, in your opinion, an additional dwelling unit?

I wish more peeps would weigh in, my mind is comfortable with how I did it but it's certainly not the only way.:blush:

 

[William K]

It was I believe in the 1990's when the city decided it was going to start enforcing Bungalows with added living units in single family districts due to "safety" concerns. They started in Little Village , Pilson and Humboldt park....... it lasted only days. Once city hall got calls from all around the city it stopped.

The properties I am finding now are 2 units which have actual garden style basements. Half the block has them just finished into added living space, family rooms etc. The other half have full 2 bedroom units with living rooms and kitchens separate utilities and furnaces and when they go to sell it becomes "Oh its just an inlaw unit". No its an Illegal unit. Thats why its priced much cheaper than legal 3 units and more than 2 units with just a finished garden basement. The market knows what it is, but the city when they get wind of these will crack down on them.
I've run across several recently and almost every time its the same old story..." the appraiser on the other one I sold had no problem with it he just called it finished area".

I had one of the large Octagon Bungalows a few months ago in a single family zoning. Finished attic with separate exterior entrances, heat and electrical meters, 4-2-1 also the same for the basement. The listing (listed as a Single Family) states "3 levels of living spaces". They had 3 electrical meters, 3 furnaces with separate gas meters, and each unit had separate entrances and the very first thing out of the agents mouth at the property right after he says hi is " Is this going to be a problem, because everyone knows its a bungalow and is zoned for only single family". I haven't even seen the front door or said anything other than Hi My name is Bill......
Is it going to be a problem? No not for me I'm not trying to sell or get funds to buy something I know is in violation to current zoning!m2:

 

[William K]

Just so I understand, are you calling SFRs with finished basements consisting of a bath, open (living/rec room) area, bedroom(s) and a kitchen ILLEGAL as to zoning because it has an additional dwelling unit? Not necessarily, in most instances they share electric and gas meters and also have an interior entrance which passes through the main floor, which in my view makes it clearly accessory.

And are you contending that this is the official position of the City of Chicago? It is the position when they go out on a complaint. As I was told, "we get into buildings so seldom that when we do we try to make it count"

As we all know this is a very murky gray area in Chicago, that is why I do not report it as black and white.

Housing court can very tricky for the unfamiliar, was able to get $38K in fines waived by removing a basement kitchen in an Auburn Gresham 2 unit I bought. Those fines scared the bejeezes out of the other bidders. Exactly

Now 3 years later, the kitchen is back in with the city's blessing and duplexed to the first floor. Is that, in your opinion, an additional dwelling unit? No , because it is clearly accessory and not meant to serve as an additional unit.


I wish more peeps would weigh in, my mind is comfortable with how I did it but it's certainly not the only way.:blush:

We all know it's about who you know in the city. However in most instances the problem properties are problems because they don't know anyone and think they can "get-away-with-it".

Where Mrs. O'Shea has lived in the neighborhood her whole life and her adult son Danny has had to move back home so they finish the basement and put in his own kitchen-their property will probably not get looked at by the city.

Where as the guy new to the city sees Mrs O'Shea put in a kitchen and decides hey I can do that in the attic and the basement and then I can bring in my relatives or even rent it out, is going to have trouble from the city, its just a matter of when.

Its almost a matter of how much Illegal is too Illegal.

 

[DTB]

"Just so I understand, are you calling SFRs with finished basements consisting of a bath, open (living/rec room) area, bedroom(s) and a kitchen ILLEGAL as to zoning because it has an additional dwelling unit? Not necessarily, in most instances they share electric and gas meters and also have an interior entrance which passes through the main floor, which in my view makes it clearly accessory.

And are you contending that this is the official position of the City of Chicago? It is the position when they go out on a complaint. As I was told, "we get into buildings so seldom that when we do we try to make it count" "

So now you are again at odds with the City's official position that you just posted?

BTW, you know why they get into places so seldom? When they come to your door, you don't have to let them in. Make them work and go to a judge first, they seldom will.

I have been in enough these joints, owned enough of these joints to know that I cannot be certain one way or another what the City would do. Honest truth, they have blown me away with what they have allowed and what they have not allowed. Not my call to make and I'm not making it.

 

[chicago guy]

Would you find it accurate to state that the "market" doesn't care if it is a legal 2 or 3? I have been in legal 2s with basement rented and collecting section 8 rent in basement unit. Big hassle when I explain I can't count basement income without proof of zoning compliance. However plenty of comparable sales to support a given value of similar buildings with 3 rentable units.

 

[William K]

Would you find it accurate to state that the "market" doesn't care if it is a legal 2 or 3? I have been in legal 2s with basement rented and collecting section 8 rent in basement unit. Big hassle when I explain I can't count basement income without proof of zoning compliance. However plenty of comparable sales to support a given value of similar buildings with 3 rentable units.

Almost always I find Legal 2-4 units get a higher price.

 

[William K]

"Just so I understand, are you calling SFRs with finished basements consisting of a bath, open (living/rec room) area, bedroom(s) and a kitchen ILLEGAL as to zoning because it has an additional dwelling unit? Not necessarily, in most instances they share electric and gas meters and also have an interior entrance which passes through the main floor, which in my view makes it clearly accessory.

And are you contending that this is the official position of the City of Chicago? It is the position when they go out on a complaint. As I was told, "we get into buildings so seldom that when we do we try to make it count" "

So now you are again at odds with the City's official position that you just posted?

BTW, you know why they get into places so seldom? When they come to your door, you don't have to let them in. Make them work and go to a judge first, they seldom will.

I have been in enough these joints, owned enough of these joints to know that I cannot be certain one way or another what the City would do. Honest truth, they have blown me away with what they have allowed and what they have not allowed. Not my call to make and I'm not making it.

Re-read my comment in RED. Zoning permits a 2nd kitchen if it is clearly accessory. However when it is not then yes it meets the city's definition of a dwelling unit.

Its no different than in some of the small southern towns that have zoning that will not guarantee the rebuild of a non-conforming building then when you're at the village hall the Mayor / Building Inspector/ Police chief says we'd let it be rebuilt we just wont put it in writing. Well that does me nor my client the Lender any good! So it gets reported as not being able to be rebuilt according to current zoning.

Officials die, retire, go to jail or get voted out of office all the time, but the zoning ordinance stays. Some times it gets vigorous enforcement other times no enforcement.
(remember the rear porches in the city a couple years back. I thought every property was going to have to have a new porch the way they were going)

 

[Pat Butler]

One of the best courses I took years ago was the AI course on illegal and nc uses. I do very little mortgage work nowadays, but two things I remember were--

-Fannie will lend on an illegal use.

-Nowhere do they require that you appraise the property at its HBU. They ask what it is, but don't require that you necessarily appraise the subject at its HBU. I don't know if they've changed that since the class. I haven't a need to research it myself.

But it appears you have plenty of market data to use in order to show the market's reaction to such an illegal use.

 

[DTB]

Re-read my comment in RED. Zoning permits a 2nd kitchen if it is clearly accessory. However when it is not then yes it meets the city's definition of a dwelling unit.

)

I understood your point.
My point is that given the anomalies that we've both seen in the City, I am surprised that you are applying YOUR judgement as to what the City would deem the area.

I do not go there, because even if I'm right, the City can and will come along and prove me wrong!

 

[AlwaysLearning]

Would you find it accurate to state that the "market" doesn't care if it is a legal 2 or 3?

Yes, the market does not care.

However, would you find it accurate to state that the client and/or intended user may care to know if it is a legal 2 or 3?

I have been in legal 2s with basement rented and collecting section 8 rent in basement unit. Big hassle when I explain I can't count basement income without proof of zoning compliance. However plenty of comparable sales to support a given value of similar buildings with 3 rentable units.

Considering your example above, do you think that the client and/or intended user may want to know that the subject is an illegal 3unit property?