MARCH 31, 2021



(Image source: City of Chicago Kinzie Industrial Corridor – Fulton Market Innovation District Plan Implementation Presentation, October 10, 2017)


On March 24, 2021, Mayor Lori Lightfoot introduced proposed Ordinance 2021-1217, a zoning code amendment that, if adopted, will eliminate a long-standing prohibition on residential uses in the Kinzie Corridor Overlay District (“KCO District”).

Adopted by the Chicago Plan Commission in 2014, the Fulton Market Innovation District Plan (“FMID Plan”) set forth the City’s vision for preserving existing jobs in the Fulton Market District and the Kinzie Corridor while accommodating private sector investments that reinforced the area’s expanding role as an innovation-driven employment center. Since then, the area has continued to evolve and transition from its industrial past to a mix of commercial, hospitality, and other innovative uses. However, until now, housing has been left out of this mix.

The KCO District was established in 2017 to replace a portion of the Kinzie Corridor PMD (PMD 4) as part of the Industrial Corridor Modernization Initiative. The KCO District regulations apply to property within the area generally bounded by West Hubbard Street on the north, North Halsted Street on the east, West Wayman Street and West Carroll Avenue on the south and North Ogden Avenue on the west.

The KCO District was established to supplement base zoning regulations and to serve as a tool to guide future development. For example, property owners and developers may only rezone land within the KCO District to Downtown Service and Downtown Mixed-Use Districts. The KCO District regulations also made property within the district eligible to receive floor area bonuses through the City’s Neighborhood Opportunity Bonus program. Finally, the KCO District explicitly prohibited residential uses in order to preserve the industrial character of the area and protect industrial operators from potentially negative impacts of housing, entertainment, and lodging.

As discussed in a recent Elrod Friedman LLP Client Alert, the Chicago Plan Commission adopted an update to the FMID District Plan in February 2021. The plan update recommends an expansion of residential uses north of Lake Street, a 30 percent affordability requirement for new residential projects, and public investment in pedestrian-friendly infrastructure and public amenities.

For years, local elected officials have opposed proposals for residential development north of Lake Street in Fulton Market. But with the arrival of the pandemic economy, in 2020, policymakers signaled a willingness to loosen the ban in order to facilitate continued investment and development in Fulton Market. The proposed ordinance, if adopted, will eliminate the longstanding legal and de facto ban on new housing in the area while continuing the opportunity to rezone to the Downtown Districts and take advantage of the available floor area bonuses and corresponding increases in residential density. These changes will build on the success of office, retail, and hospitality development in Fulton Market, creating new opportunities for residential developers and allowing the neighborhood to reach its full potential.

The proposed amendment still requires approval by the Committee on Zoning, Landmarks and Building Standards and the full City Council. It is expected that a hearing on this ordinance will take place this spring. When approved, the ordinance will go into effect immediately.

For questions about the proposed ordinance, information about the City’s guidelines for floor area bonuses in Fulton Market, or to learn more about the regulations of the Kinzie Corridor Overlay District, contact any Elrod Friedman attorney.