People Over Parking: How Illinois’ Parking Reform Law Reshapes Opportunity for Developers and Property Owners

As part of a sweeping legislative package aimed at modernizing land use and supporting public transit, Illinois has enacted the People Over Parking Act (SB 2111)— a major policy shift for commercial real estate. Taking effect on June 1, 2026, the Act eliminates minimum automobile parking requirements for most new developments located near public transportation. This opens new opportunities for developers, property owners, and investors across the state.

While the law is embedded within a broader reform package focused on stabilizing Illinois’ public transit systems, it stands out for its potential to reshape how and where development occurs throughout the state.

A Major Departure From the Status Quo
Historically, minimum parking requirements have been a standard but costly component of local zoning regulations. They add complexity to real estate development and limit flexibility, particularly in transit-served areas. By requiring a fixed number of off-street parking spaces for residential and commercial projects, municipalities have unintentionally inflated construction costs, hindered redevelopment of urban infill sites, and discouraged density near transit.

The People Over Parking Act reverses that trend. It prohibits local governments from imposing or enforcing minimum automobile parking requirements on qualifying developments. These include projects that are not used for transient lodging (such as hotels or bed and breakfasts) and are located within a half mile of a public transportation hub, like a rail station or high-frequency bus intersection, or within one-eighth of a mile of a public transportation corridor served by frequent bus service.

The change applies broadly across Illinois, including home rule municipalities such as Chicago, many of which have historically imposed strict parking minimums. Because the law defines transit access in broad terms, the coverage area is extensive. It includes large portions of the Chicago metropolitan region, the MetroLink corridor in Metro East, and high-frequency bus zones in cities such as Champaign-Urbana. With Metra alone operating 168 stations outside Chicago, the development potential is substantial.

Civic groups have already begun mapping potentially eligible zones, highlighting how widespread the opportunity will be once the Act takes effect.

What Developers Need to Know
Cost Reduction and Increased Feasibility

By eliminating mandatory parking, developers can avoid the significant costs associated with structured or surface parking lots. This change makes compact, financially feasible development more achievable, especially for smaller or irregular parcels that were previously constrained by parking layout requirements.

Design Flexibility

Developers retain the option to provide parking voluntarily. If parking is included, municipalities may still regulate certain elements, such as:

• Shared or public-use parking
• Car-share vehicle spaces
• Paid (not free) parking access

This flexibility allows developers to align parking strategies with market demand rather than arbitrary municipal mandates.

Strategic Value of Transit-Oriented Development (TOD)

The Act effectively incentivizes TOD by removing barriers to higher-density, mixed-use projects near public transit. These developments advance sustainability goals, attract residents who value walkability, and can command premium rents or sale prices due to convenient access to jobs, amenities, and services.

Implications for Property Owners and Investors
Increased Demand Near Transit

As developers focus on sites that no longer require costly parking infrastructure, parcels near qualifying transit nodes and corridors are likely to see heightened interest. Owners of underutilized or vacant land within these areas should explore rezoning opportunities, entitlement strategies, or joint venture partnerships to take advantage of this shift.

Revenue From Parking as an Amenity

When parking is provided voluntarily, it can be monetized. This marks a significant change from traditional zoning models where parking was bundled or provided free of charge. For mixed-use or residential projects, this flexibility could generate new revenue through paid parking, shared public lots, or partnerships with car-sharing providers.

Sustainable Asset Positioning

As institutional investors continue to prioritize sustainability and responsible investment standards, properties in walkable, transit-accessible areas that reduce reliance on personal vehicles are becoming increasingly attractive for long-term value and growth.

What Stays the Same

• Municipalities can still regulate on-street parking and establish maximum parking limits.
• Bicycle parking minimums remain unchanged.
• The Act does not override existing site plans or development agreements unless amendments are made that increase parking requirements.
• Electric vehicle parking standards, governed by the Illinois Electric Vehicle Charging Act, are unaffected by the People Over Parking Act.

Looking Ahead
As Illinois moves to establish a new regional transit oversight authority, the Northern Illinois Transit Authority, new maps, policy guidance, and implementation tools are expected to follow.

For now, developers, investors, and property owners should identify qualifying sites, evaluate entitlement risk, and adjust financial models that no longer assume parking as a baseline requirement.

Mandatory parking requirements in transit-served areas are being phased out under Illinois’ new law. Those who act early to understand and leverage the People Over Parking Act will be best positioned to build, own, and invest in the next generation of urban real estate.

Questions about how the People Over Parking Act may impact your development plans? Reach out to Benjamin Altshul or another member of LP’s Real Estate Group.