Zoning Reform & Multiunit Housing: Oak Park's Feasibility Study Insights

By RadCRE Research · 2026-10-02 · Market Updates

A recent financial feasibility study in Oak Park indicated that multiunit developments face significant financial gaps, with high rents predicted despite proposed zoning changes [1].

Zoning Reform and the Feasibility of Multiunit Development

The conversation around revitalizing urban centers and addressing housing shortages often includes strategies such as office-to-residential conversions or encouraging new multiunit developments through zoning reform. While the concept holds promise, a recent financial feasibility study conducted for the Village of Oak Park offers a nuanced perspective on the challenges involved [1].

The study, prepared by SB Friedman and referenced by the Wednesday Journal of Oak Park and River Forest, specifically examined multiunit developments under proposed zoning changes aimed at encouraging "missing middle" housing [1]. The findings indicated that while zoning reform might be a foundational step, it is not a standalone solution for creating affordable housing. The analysis predicted high rents for new multiunit developments and identified significant financial gaps, suggesting that additional financial backing would be necessary to achieve affordability objectives [1].

This report from Oak Park underscores a critical point for developers and investors considering adaptive reuse or new multiunit construction: the economic viability is heavily influenced by factors beyond just zoning. While regulatory adjustments can streamline processes or allow for higher density, they do not inherently solve the cost implications associated with development, including land acquisition, construction, and financing [1]. The study implies that for projects to truly deliver affordable options, a more comprehensive approach, potentially involving subsidies or other financial incentives, may be required [1].

The Village of Oak Park's initiative, led by Village President Vicki Scaman, to explore zoning changes for multiunit developments highlights a broader trend among municipalities seeking innovative solutions to housing challenges [1]. However, the study's conclusions serve as a reminder that the path to creating affordable multiunit housing is complex and often necessitates a blend of policy reform and robust financial strategies.

RadCRE Perspective

The Oak Park study's findings are highly relevant to the broader discussion on office-to-residential conversions and other multiunit developments. It illustrates that while zoning adjustments are often lauded as catalysts, they are insufficient on their own to bridge the financial viability gap for affordable housing. For many adaptive reuse projects, especially those targeting a value-add component, understanding these financial gaps and identifying supplemental funding or incentive programs is paramount. Our analysis consistently shows that successful conversions often hinge on a multi-pronged approach that combines favorable zoning with strategic financing and, where applicable, public-private partnerships to address affordability requirements. Without additional financial support, even well-intentioned zoning reforms may lead to projects that, while increasing housing supply, do not meet broader affordability goals. Investors must perform rigorous financial modeling to account for these potential gaps and identify viable pathways to profitability, whether through market-rate rents or by accessing specific programs designed to offset development costs for affordable units.
– Majid Radaei, Founder & Principal Broker, RadCRE

RadCRE advises clients on navigating these complex real estate landscapes, leveraging deep market insights and financial expertise to identify opportunities and mitigate risks in value-add acquisitions, including potential multiunit conversions and developments.

Tags: office to residential conversion, zoning reform, multiunit development, affordable housing, real estate feasibility study