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Chicago seeks to boost supply of affordable housing, particularly downtown and in gentrifying areas

Sarah Freishtat and Darcel Rockett, Chicago Tribune on

Published in Home and Consumer News

CHICAGO — Housing developers building downtown and in gentrifying neighborhoods would have to boost the number of affordable units they create under a plan by city officials.

The reworked Affordable Requirements Ordinance, introduced Wednesday by Mayor Lori Lightfoot and the Chicago Department of Housing, is an attempt to close the city’s affordable housing gap and slow the displacement of families in gentrifying neighborhoods.

Developers aren’t keen on the proposed changes but some housing advocates say the measures should go further.

The current ordinance, passed in 2015, requires residential developers putting up buildings with more than 10 units who receive city funding, require a zoning change or build on city-owned land to designate at least 10% of the units for rents below market rate or pay fees to the city.

Some projects are required to include a higher percentage of affordable units, and the revised ordinance would raise the bar to 20% for developers of rental housing downtown, in neighborhoods with little affordable housing or in gentrifying areas.

In addition, the city seeks to restrict developers’ ability to pay fees to the city rather than build affordable units. A developer would have to build half the required affordable units on-site or elsewhere, and could pay fees to satisfy the remainder of the requirement. Under the current ordinance, developers only have to build 25% of the units.

 

Marisa Novara, commissioner of the city’s Department of Housing, said the changes are intended to increase the supply of affordable homes in areas that lack them, serve lower-income households, expand the number of family-sized units and emphasize affordability near transit.

Novara said the city is about 120,000 affordable housing units short of what is needed. “I wish there were a switch that we could flip to fix that,” she said. “I think the reality is that it (the solution) is multipronged and multiple steps forward.”

Since the first version of the ordinance was passed in 2007, more than 1,000 affordable units in market-rate developments have been constructed and developers have paid more than $124 million of “in lieu of” fees, according to a Housing Department task force report.

The current ordinance has been plagued with shortcomings. In a 2018 investigation, the Tribune found that the number of affordable residences being built was below City Hall projections by some measures, and the developer fees were mostly steered away from gentrifying neighborhoods.

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