It will likely not come back to Council again until September.
The Zoning Committee approved the measure Tuesday.
The "granny flats" ordinance would give residents across the city the ability to convert different spaces into residential units.
That includes unused spaces like coach houses, attics and garden units, but the measure has a long way to go before it could be passed.
RELATED: Chicago City Council committee approves additional dwelling unit, or 'granny flat,' ordinance
City Council members say the proposed ordinance addresses the longstanding issue of high rent and adding more affordable housing.
Mayor Brandon Johnson and some other City Council members like 44th Ward Alderman Bennett Lawson are behind the idea.
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Lawson is the sponsor of the ordinance, which passed the Council's Zoning Committee with intense debate.
"We do maintain limits in the single-family zones so that they're not able to build more than a certain number per year, per block, and home ownership is also going to be required," Lawson said.
The ordinance also prohibits short-term rentals and eliminates aldermanic prerogative, which gives aldermen the final say about zoning in their wards.
Alderman Andre Vasquez had a pilot program in his ward.
But opponents say the measure will negatively impact neighborhoods.
Thirteenth Ward Alderman Marty Quinn says one of his concerns with the ordinance is that investors would swoop in to buy single-family bungalows and convert them into two- or three-flats, increasing neighborhood density and taxing neighborhood resources.
The Rev. Robin Hood, a community activist, says the ordinance is a double-edged sword that could both help and hurt neighborhoods, especially on the city's South and West sides.
"It could speed up the gentrification process because neighborhoods are changing, but it could also help stabilize some homes," Hood said.
But some residents say the ordinance would help.
"It was already beneficial for me unless that's the house that my grandmother left us the house," West Side resident Sharmora Geiger said.
Geiger is hoping to build generational wealth, and says the newly proposed ordinance allowing her family to legally convert their basement and garage into residence space might just be the way she can do it.
"It would be a suggestion probably the garage into a coach house cause I do know that coach house is kind of rare in Chicago, but that would be an amazing opportunity for us to make money if we could," Geiger said.
Parking requirement reform passes
While the additional dwelling unit ordinance did not pass Wednesday, aldermen did approve parking requirement reform.
Ordinance SO2025-0015577 provides parking flexibility for new construction, rehab or reuse projects near CTA stations, the mayor's office said.
"We need to pull every lever that we possibly can to grow our housing supply and drive down the cost of rent in Chicago," Johnson said in a statement. "Parking requirements often act as an obstacle to building faster and more efficiently. I am glad that City Council has begun to take action on this critical issue. This is about making our city more affordable by making it easier to build across our city."
The ordinance allows some developments to reduce the amount of off-street parking provided by up to 100% without the need for an administrative approval, the mayor's office said.
"Today is a great day for equitable transit oriented development in Chicago," Alderman Daniel La Spata said.