Chicago has a lot of alleys and here is how they came to be:
According to Michael Martin, alley expert and professor of landscape architecture at Iowa State University, the “why alleys” question is easy to answer. You just have to go back to the late 1700s, decades before Chicago was founded. America was young, and had hardly touched any of its newest territories to the west…
According to cartographer and Chicago history buff Dennis McClendon, alleys had become so commonplace in the American West that the Illinois General Assembly “simply expected it to happen in Chicago.”…
The I&M Canal Commission hired surveyor James Thompson to lay out Chicago at the eastern end of the canal in 1830. To attract prospective land buyers, the General Assembly ordered that the new town of Chicago be “subdivided into town lots, streets, and alleys, as in their best judgment will best promote the interest of the said canal fund.”…
For its boom years in the 1800s, Chicago was an alley monster; it planned new blocks with alleys, annexed towns with alleys, and added territory to its alley-riddled gridiron. But all grid things must come to an end, and soon communities started popping up without alleys.
The first of those communities arrived in 1869. That year, Frederick Law Olmsted — the father of landscape architecture (and who later played a huge role in Chicago’s landscape) — planned the community of Riverside, which was situated on what was considered to be the far western outskirts of the Chicago region. It was the first planned suburb in America, and the earliest sign of divergence from Chicago’s alley trend.
In other words, Chicago has alleys because when it was founded, many communities had alleys. Chicago just happened to boom at this time and the alley was seen as a normal feature – until it slowly petered out in the late 1800s and early 1900s. Then, different expectations took over which emphasized lawns and cars. The vast majority of post-World War II housing does not include alleys as the car is given a prominent spot at the front of the house (with a driveway and garage) and the backyard became a private and important space. Today, New Urbanists promote alleys largely because they are a traditional design feature that removes undesirable activities (like cars) to the back and allows the house to be closer to the street (encouraging sociability). And, I have hard time imagining many municipalities want to pay for alleys – they add an additional layer of cost and infrastructure.