An ‘Abundance’ agenda for Chicago

More housing. More transit. More power. Less waiting.

Ezra Klein and Derek Thompson’s Abundance: On the Future of Growth hit bookshelves in March with an urgent message for American progressives: if you want justice, get serious about building things.

“The places where Democrats hold power shouldn’t be advertisements for how bad they are at wielding it,” Thompson said. “If Democrats want to be the party that believes in government, they have to show that government can actually build what it intends to build … a liberalism that works. A liberalism that builds.”

Klein dubbed their approach “supply-side progressivism.” And it’s already reshaped how policymakers talk about housing, transportation, energy and more.

Abundance is ultimately about the moral (and political) imperative of making American life more affordable through more supply, more innovation, and fewer regulatory hurdles. It also provides an analytical framework that local leaders in Chicago need to reckon with – one that could prove decisive in mayoral and City Council elections in 2027, not to mention national elections in which Democratic governance in big cities like Chicago could become a big issue.

So this week in The Last Ward, we’re asking: What does it mean to take the message of Abundance seriously, in Chicago, today?

A few disclaimers before jumping in:

1. This is an exercise in localizing the Abundance lens. I’m not claiming Klein or Thompson endorse any specific policy recommendations here.

2. This is not an exhaustive account of everything that could be done to unleash growth and make government spending more effective in Chicago. Fiscal reforms like fixing the intergenerational injustice of the city’s pension debt, labor reforms like changing collective bargaining rules that give Illinois government unions more power than voters, lawmakers, and unions in any other state, and basic pro-business legislation like allowing smaller retail footprints are outside the purview of this piece.

3. More than its peer cities, Chicago is highly dependent on state action in order to make governance changes. This is owed in large part to its freakish lack of a city charter, and securing this foundational document is a critical part of any sustainable reform agenda. The following is a mix of state and local solutions, with an emphasis on local. For federal solutions, buy the book.

Let’s begin with housing.

How to make Chicago housing abundant

Chicago saw the highest growth in rents among the top 50 U.S. cities by population over the last year, according to Zillow. And Klein himself spurred a spirited debate in Chicago housing circles with the following passage in his recent New York Times column:

In March, Brandon Johnson, the mayor of Chicago, tweeted that Chicago had “invested $11 billion” to “build 10,000 more units of affordable housing.” That nets out to $1.1 million per unit. If you dig into the process for selecting affordable housing projects, you’ll find there’s a rubric that awards each project up to 100 points for fulfilling different goals. A project gets 10 points for “advanced level” green-building certification; it gets 11 points for “BIPOC development control” or a woman-led development team; it gets seven points for fulfilling certain accessibility requirements; “cost containment” is worth three.

Johnson is the most proudly left-wing big-city mayor in the country. He is happy to attack corporate power and oligarchic control. He’s also the least popular big-city mayor in the country and may well end up as the least popular mayor in Chicago’s history. Policy failure breeds political failure.

Chicago housing expert and author of “The Battle of Lincoln Park” Daniel Kay Hertz weighed in on Klein’s remarks here and Richard Day over at the great Substack City that Works responded to Hertz here. They’re smart guys and both pieces are worth reading. But the bottom line is this:

• The Johnson administration celebrated the idea of spending $1.1 million per unit of public housing. That alone proves Klein’s thesis that progressive elected officials like Johnson are focused too much on spending and not enough on results.

• Chicago is building government-funded housing at an absurdly high price. Here’s a recent project that cost more than $800,000 per unit. That cannot scale.

• Chicago makes it illegal or financially impossible to build the most affordable housing types we used to take for granted. I took a look at this problem in April on the anniversary of Bring Chicago Home’s failure at the ballot box.

Here’s a suite of eight reforms that can make Chicago housing more abundant.

1. Actually cut the tape: Johnson’s “Cut the Tape” initiative includes some great recommendations for reform, including eliminating Phase 1 and 2 environmental reviews on pre-cleared city lots, converting vacant storefronts to housing without discretionary rejections, allowing barber shops and nail salons to open without a Zoning Board of Appeals hearing, and repealing parking minimums. Here’s the problem: none of these have been implemented! City Council should introduce these reforms and pass them to Johnson’s desk. (In fact, at least one has already been introduced – see No. 8 below.)

2. Automatically approve delayed permits: Create 30-, 60- or 90-day deadlines for each permitting stage, then grant automatic approval if the city misses the deadline.

3. Mandate objective building criteria: The de facto veto power held by each of the city’s 50 aldermen over new development, known as aldermanic privilege, leads to too many housing developments being blocked due to subjective criteria. That power should be limited to ease development of light-touch density properties (four- to 10-unit buildings.)

4. Remove hurdles for accessory dwelling units (ADUs): The city’s ADU pilot program restricts development to a few small pilot areas and creates unfair limitations to development on the South and West sides of Chicago. The city should allow more Chicagoans to build “granny flats.”

5. Allow for more multi-family housing in single-family zones: More than a third of Chicago’s residential land is restricted to single-family housing. Needing special approval from the local alderman to circumvent these restrictions adds time and complication to housing development.

6. Support Ald. Matt Martin’s single-stair ordinance: Martin, 47th Ward, introduced a single-stair reform ordinance in May that would allow new residential buildings up to six stories to have just one stairwell, as long as a fire-rated elevator is included. This would bring Chicago in line with cities like New York and Seattle in reducing the cost of building small-to-mid-size apartment buildings. Alds. Ruth Cruz, 30th Ward, and Bennett Lawson, 44th Ward, are co-sponsors.

7. Support Martin’s public housing reform ordinance: Another Martin ordinance prohibits the Chicago Department of Housing from holding publicly funded housing to higher approval standards than market-rate housing that is currently approved under the city’s building code. That’s an easy, commonsense fix.

8. Support Ald. Daniel La Spata’s parking ordinance: La Spata, 1st Ward, introduced an ordinance eliminating parking mandates for new construction near public transit – in line with Johnson’s “Cut the Tape” recommendation. This is one of the best “free” policy levers to boost housing production in Chicago.

So we’ve made Chicago housing abundant. Now onto transportation.

How to make Chicago transportation abundant

Klein and Thompson discuss at length California’s high-speed rail boondoggle, which has gained national infamy. Less known nationwide is Chicago’s Red Line Extension, which, while much smaller in scale, may prove just as calamitous.

The deeply financially troubled Chicago Transit Authority is set to spend $5.75 billion on a 5.6-mile extension of the Red Line from 95th Street to 130th Street.

“$1 billion per mile is almost a world record for an elevated line,” Alon Levy of the NYU Marron Institute’s Transit Costs Project told Crain’s. “There is no reason this should be the cost.”

Abundance forces local policymakers to call out this project for what it is: A financial albatross and a moral failure, especially for the least fortunate Chicagoans. And kudos to state Rep. Kam Buckner, D-Chicago, for doing so.

“The staggering budget overrun, with a billion-dollar cost per mile, puts the Red Line Extension on par with the most expensive transit projects in the world,” he said. “We should have had a conversation a long time ago on how to serve the South Side better for less, with things that would have been more cost-effective solutions.”

Here are five ways to provide more quality rides per dollar in Chicago:

1. Pause the Red Line Extension immediately and convene a blue-ribbon commission to study what went wrong: The estimated cost per projected daily rider for the Red Line Extension is $192,000. Local real estate investor AJ Manaseer pointed out that for this price, the government would be better off buying each daily rider a brand-new, fully loaded 2025 Porsche 911. And they’d still have $4,000 left over. Expanding service on Metra’s Electric Line, which already runs to the South Side, would be a much quicker and less costly option.

2. Reform prevailing wage mandates that inflate labor costs by 40%: One element of the Red Line Extension’s cost explosion is prevailing wage rules. As my former colleague Dr. Orphe Divounguy pointed out in this excellent 2017 analysis, Illinois’ prevailing wage mandates inflate labor costs on public construction projects by at least 40%. For example, the average Cook County carpenter earned $31.04 per hour at that time, according to Bureau of Labor Statistics data. But Illinois’ prevailing wage law mandated a wage of $43.35 per hour for carpenters in Cook County on public construction projects.

3. Modernize transit governance: Our region’s transit is fractured among CTA, Metra, Pace, and the RTA – leading to siloed planning and inefficient service. The city would be better off knocking down those siloes. A much-debated proposal in Springfield would merge these agencies into the unified Northern Illinois Transit Authority, or NITA, potentially aligning bus and rail schedules and fares into a “one network, one timetable, one ticket” model. With a coordinated network, Chicago could run more frequent off-peak service and better integrate routes like the Electric Line without each agency guarding its turf.

4. Bus Rapid Transit (BRT) and bus priority: Buses move the bulk of CTA riders, but they’re often crawling behind car traffic. Chicago shouldn’t shy away from building world-class BRT corridors. Seventeen aldermen led by Ald. Andre Vasquez, 40th Ward, and Ald. Matt Martin last year asked the city to study BRT on Western Avenue, Chicago’s longest street. This single line would link with five CTA train lines and four Metra lines, dramatically improving access for many areas lacking rapid transit. Every minute shaved off a bus trip is an abundance win for riders who gain back time.

5. Smarter pricing for the CTA, road use and autonomous vehicles: The CTA hasn’t hiked fares since 2018, when bus fares increased to $2.25 and train fares jumped to $2.50. Just keeping up with transportation-sector inflation since then would put those fares at $2.82 and $3.13 today, respectively. The CTA is seeking a state bailout, but would be wise to pursue a reasonable fare increase on its own riders first rather than cut services. At the same time, Chicago has among the most congested roadways in the world and the city is exploring a congestion fee for trips into the most gridlocked parts of the Central Business District. The rise of autonomous vehicles could also help reduce congestion, and the city should explore options like a Vehicle Mileage Tax for those rides.

One caveat for a congestion charge or automated vehicle tax: Rather than dumping that new revenue into public transportation, officials should consider financing cuts to other, economically harmful taxes the city imposes. One prime candidate is a 1:1 cut in the city’s absurd cloud computing tax, which drives the most innovative businesses away from Chicago with a punishing 11% tax on SaaS. As Bloomberg put it last year, the cloud tax “threatens Chicago’s silicon valley dream.”

And that brings us to the fuel for such a dream: abundant energy.

How to make Chicago energy abundant

I recently heard from a Statehouse lobbyist that labor unions recognize there is just one sector of construction jobs currently growing in Illinois: data centers.

As Drive Capital’s Landon Campbell put it: “Chicago can save America’s compute challenges … Between our nuclear-powered grid, access to fresh water, and deep research talent, Illinois is built to support the next wave of AI infrastructure.” (I recommend attending Landon’s AI in the Heartland event July 21.)

Rapidly growing demand for energy requires Chicago to think outside the box about power. Thankfully, the city has huge natural advantages in this area.

Here are four changes that would bring Chicago closer to energy that’s too cheap to meter:

1. Simplify energy permitting: The permitting process for rooftop solar in Illinois can drag on for weeks, and sometimes months, according to a recent report from the Chicago Tribune. Illinois solar installers are canceling jobs because the red tape is so bad they can't justify doing business here. But the Residential Automated Solar Permitting Act (SB 2395/HB 3265), sponsored by state Sen. Bill Cunningham and Rep. Marcus Evans, would solve this problem by requiring local governments to adopt instant solar permitting for residential rooftop solar and home battery storage. Adoption of automated permitting tools like SolarAPP+ would unlock thousands of energy projects and save residents money.

2. Create a real-time electricity pricing option for residential and commercial customers: Illinois is one of the few states that allows residential real-time pricing through Ameren and ComEd, but uptake is low. The state and city should work with utilities and regulators to expand awareness and enrollment in real-time pricing programs, which can lower electricity bills and reduce stress on the grid. The inimitable Lynne Kiesling notes this is especially effective when paired with smart thermostats, which can automate usage to take advantage of lower rates. Making Chicago a national leader in smart pricing adoption would reduce peak demand and emissions – an abundance move that saves money and unlocks cleaner, more efficient grid use.

3. Modernize regulatory incentives for grid innovation: The Illinois Commerce Commission still primarily uses cost-of-service regulation, which rewards utilities for capital expenditures rather than outcomes like reliability. Kiesling recommends performance-based ratemaking as a better model, where utilities are financially rewarded for reducing outages, increasing DER (distributed energy resource) interconnections, or reducing interconnection wait times. City and state lawmakers should advocate for legislation that enables these reforms, and the ICC should be empowered to set performance metrics that matter to Chicagoans.

4. Double down on nuclear: Illinois is the nation’s nuclear leader, and nuclear remains essential to a clean, abundant energy future. For years, an outdated state law banned the construction of new nuclear plants, including next-generation designs. That changed in 2023 when Gov. JB Pritzker signed legislation championed by state Sen. Sue Rezin, R-Morris, lifting the moratorium for small modular reactors (SMRs) up to 300 MW, starting in 2026. Rezin has also introduced a separate bill that would lift the ban on full-scale reactors. State lawmakers should pass it.

Chicago has the tools and natural advantages to unlock abundance – land, transit lines, a nuclear-powered grid, and world-class research institutions. But those assets alone aren’t enough. We also need to confront how our political culture gets in the way of building.

Bringing an Abundance mindset to Chicago policymaking

Chicago struggles with a problem coined by Noah Smith as “checkism,” or the belief that all the government has to do is cut a big enough check, and everything else will work itself out.

One example: When asked how he would grade Chicago’s education system, Mayor Brandon Johnson replied, “I personally don’t give a lot of attention to grades. I don’t…My responsibility is not simply to grade the system, but to fund the system. That’s how I’m ultimately going to grade whether or not our public school system is working. Based upon the investments that we make for the people who rely upon it.”

The opposite approach is “pull funding,” which handsomely rewards outcomes and doesn’t care about the inputs. Klein and Thompson discuss pull funding in the context of big technological breakthroughs, where the government could commit to paying a prize for successful technologies that, for example, capture carbon in the atmosphere, or cure a rare disease.

Could pull funding be applied to city government? Take the issue of homelessness, for example.

Today, Chicago awards huge upfront grants or contracts to nonprofit providers and developers to build affordable housing and shelters. Payment happens regardless of the long-term effectiveness of these interventions.

Instead, the city could announce a clear, measurable goal, such as permanently housing 1,000 chronically homeless Chicagoans by a specific date, and commit publicly and legally to a financial reward that is paid upon success.

Providers would front the initial investments (using private or philanthropic dollars), knowing that if they deliver on results, the city will guarantee full payment plus perhaps a premium for speed or exceeding targets. Only upon verification that people have been housed for a sustained period (e.g., verified via city-led audits at 12-month intervals) does the prize get paid.

The same mechanism could be applied to reading interventions in schools, software reducing wait times for trains and buses, or even crime-fighting tools.

If Chicago wants to win back trust, population, and investment, politicians can’t just promise more spending. The city has to deliver more building: more homes, more rides, more energy, and better outcomes.

The policies outlined here aren’t exhaustive, but they point to a new governing philosophy – one that should play a prominent role in the city’s path forward.

In the news

Last week I spoke with Ted McClelland at Chicago Magazine about what former Illinois House Speaker Mike Madigan’s downfall means for term limits. And I joined the RealClearPolitics Podcast on Sirius XM to discuss Chicago Mayor Brandon Johnson, Chicago Public Schools CEO Pedro Martinez, and last week’s edition of The Last Ward regarding the pension sweetener heading Gov. JB Pritzker’s desk (interview starts at 21:57).

See you at the movies

Join the Chicago Policy Center, Civic Federation, and Better Government Association at the Chicago History Museum on July 1 for an exclusive screening of “Drop Dead City,” the Library of Congress Ken Burns Prize-winning documentary on New York City’s 1975 financial crisis. Grab your ticket here.