So I'm not agreeing with the alderman but what I think he means by naturally occurring is duplexes, triplexes, and fourplexes. Or any sort of plex, as opposed to single family homes. Obviously a rental in a two flat can be expensive, but the general idea is that those multi unit housing units were/are the backbone of affordable housing. That is, housing that for decades has been naturally affordable without a subsidy.

It looks like the logic behind this ordinance was that in Pilsen and Logan sq, duplexes and triplexes were being torn down for single family homes, this reducing housing supply technically.

Now I'll admit, I think I agree with you, that this can probably back fire and make building housing harder and ultimately more expensive. I don't think they thought through this enough.