February 27, 2026
By Jeffrey Butcher and Brooke Lenneman
As the fourth installment of our ongoing series analyzing the legislative components of Governor Pritzker’s proposed housing agenda, the Building Up Illinois Developments (BUILD) initiative, this alert focuses on the proposed mandates and restrictions related to “middle housing” developments.
The initiative’s middle housing reform component is Senate Bill 4060, filed by Senator Mattie Hunter on February 19, 2026. The provisions of SB 4060 track the middle housing provisions of House Bill 5626 that we highlighted in a prior alert. This legislation would amend the Illinois Municipal Code to establish uniform statewide administrative and zoning regulations to allow the construction of mid-sized, multi-unit residential developments in areas currently restricted to single‑family zoning districts.
If enacted, SB 4060 would require non-home rule and home rule municipalities to allow up to eight-unit developments by right in all residential districts, subject to certain lot size and bulk restrictions. SB 4060 would effectively eliminate single‑family zoning districts as we currently know them.
Defining Middle Housing
SB 4060 defines “middle housing” as a class of residential housing comprising the following development types:
- duplexes;
- triplexes;
- fourplexes;
- cottage clusters (defined as three or more detached or semi-detached dwelling units on a shared lot, arranged around a common open space);
- townhouses;
- attached courtyard housing;
- detached courtyard housing; and
- stacked-flat plexes (defined as buildings containing two to eight vertically arranged units that are designed to resemble a single-family home).
Unit Allowances Based on Lot Size
If adopted, SB 4060 would require municipalities to allow the construction of middle housing units in any zoning district where single-family homes are allowed by right. Density would be determined by lot size as follows:
| Lot Size (in square feet) | Units Permitted as of Right |
| 2,500 ≥ [X] | One detached single-family home |
| 2,500 < [X] ≤ 5,000 | Up to four dwelling units |
| 5,000 < [X] ≤ 7,500 | Up to six dwelling units |
| 7,500 < [X] | Up to eight dwelling units, including cottage clusters |
SB 4060 would prohibit municipalities from requiring a minimum lot area of more than 2,500 square feet for detached single-family homes. For reference, this is significantly smaller than the traditional 25’ x 125’ “Chicago Lot,” which is 3,125 square feet.
Conversion of Existing Structures
Under the legislation, Municipalities would be required to allow existing residential structures to be divided into middle housing units, with the permitted unit density based on lot size as described above, provided that the structure’s floor area is not increased by more than 50 percent or 1,200 square feet, whichever is greater. Converting an existing residential structure into middle-housing units would be permitted without triggering new construction standards or requiring any existing nonconformities to be corrected. For example, an existing large single‑family home on a lot exceeding 7,500 square feet (approximately 0.17 acres) could be converted into eight middle-housing units by right, without triggering new construction standards or requiring that existing nonconformities be corrected.
Limits on Local Zoning Authority
SB 4060 provides that all regulations pertaining to the allowance, siting, and bulk of middle housing units must be “clear and objective,” cannot delay or discourage the development of middle housing, and must be applied equally to single-family, middle housing, and multi-family developments. To meet the “clear and objective” standard, municipalities would be prohibited from requiring any type of approval that involves discretionary judgment, such as special use permits and planned developments (although historic preservation review related to the proposed demolition of a structure designated as historic would be permitted), unless that same discretionary review also applies equally to single-family homes. On an administrative level, municipalities would be required to process middle housing applications within the same timeframe as applications for detached single-family dwellings.
In addition to the density mandates summarized above, SB 4060 provides specific default design and bulk standards for middle housing units, including yards, setbacks, building height, parking, floor-area ratio, lot coverage, vehicular and pedestrian access, unit size, and building separations. Municipalities would be prohibited from imposing standards inconsistent with the default standards set by the state. Notably, the default standards proposed in SB 4060 are significantly more permissive than many of the standards currently in place in most municipalities. For example, the bill proposes the following mandated standards:
- Setbacks. The minimum setbacks for dwellings cannot exceed 10 feet from the front of the dwelling, five feet from either side of the dwelling, 10 feet from the rear of the dwelling, or 10 feet from the corner-lot street.
- Building Height. Municipalities may not impose a maximum building height of less than 35 feet, or require any additional height reductions based on building form, articulation, roof type, or architectural style.
- Lot Coverage. The maximum permitted lot-coverage must be at least 70%.
- Floor-area Ratio. The maximum FAR must be at least 1.5.
- Building Separation. The minimum required separation between structures on the same lot cannot exceed six feet, except as required by the State Fire Code.
- Municipalities may not require parking for residential dwellings of less than 1,500 square feet or for any lot within a half-mile from public transit; and may not require more than 0.5 parking spaces per multi-family unit or one parking space per single-family home.
- Design Standards. Design standards must be limited to: one primary entrance facing the street except for cottage clusters; roof-drainage compliance with State law and stormwater codes; at least 20% transparency on street-facing facades; materials permitted under the State building code; no standards based on subjective criteria such as compatibility or character are permitted;
- Cottage Cluster-Specific Criteria. Units must be at least 150 square feet; common open space of at least 150 square feet per unit must be provided; consolidated parking must be permitted; and pedestrian paths must be permitted as needed for fire and life safety.
- Townhome-Specific Design Standards. Minimum setbacks cannot exceed 10 feet, except that lots with rear alley access shall not be required to have minimum rear setbacks.
SB 4060 would provide municipalities with a grace period to adjust to these state mandates. Within eight months of its effective date,1 SB 4060 would require every municipality to review and amend its local zoning regulations as necessary to authorize middle housing in conformance with the mandated density, “clear and objective,” design, and bulk standards. Municipalities can continue to review middle housing permit applications under existing local standards until the expiration of this eight-month period. Thereafter, any municipal ordinance that conflicts with the statewide density, review, and bulk standards would be void and unenforceable, and the default regulations set forth in the bill would govern.
Big picture – out of all the component Senate bills, the middle housing legislation has the potential to change the face of suburban communities most significantly. The impact should not be understated. The 2,500-square-foot ceiling on minimum lot size alone could allow a wave of large lot subdivisions. Allowing eight dwelling units on 7,500-square-foot lots in districts previously limited to single-family homes would be a huge change to suburban areas with larger lot sizes.
As the legislative session progresses, this proposed legislation will likely continue to evolve through ongoing review and negotiation. We will continue to monitor developments and keep our clients apprised of changes to the bill and the potential impact on local development controls. In the meantime, please contact Jeffrey Butcher, Brooke Lenneman, or any other Elrod Friedman attorney for additional guidance on middle housing or other components of the BUILD initiative.
1 As with House Bill 5626, which includes identical language, SB 4060 does not include a specific effective date. If adopted during the spring legislative session, the earliest that SB 4060 would take effect is January 1, 2027. Therefore, municipalities would be required to adopt conforming amendments to their local codes by September 1, 2027.