Affordable Housing Policies Becoming Law

Developers seeking a write-down on the cost of city-owned land will be required to set aside 10% of their units as affordable for renters and buyers. Those seeking other financial help, including tax increment financing, will need to set aside 20% of their units.

For condominiums and townhomes, affordability means prices within reach of households earning 100% of the area's median income or less. For multifamily rental projects, affordable units must be within reach of those earning 60% of the area median income.

Although 23 of 50 aldermen are supporting a mandatory set-aside of 25%, even on projects involving private property and no financial assistance, the department of housing's proposed ordinance was passed by the committee, with 3rd Ward Ald. Dorothy Tillman casting the lone dissenting vote.

However, 50th Ward Ald. Bernard Stone, a real estate broker, questions the constitutionality of 4th Ward Ald. Toni Preckwinkle's mandatory 25% affordable housing set-aside on all city projects. He also says it will turn developers away from the city.

"When you create a disincentive to build, you create a situation where the developer caters to a market where he can make money," Stone says. "The market does not cater to social necessities, but to profit."

Among those supporting the affordable housing requirements were the 10,000-member Chicago Association of Realtors and the Chicagoland Apartment Association, whose 300 members own or manage 12,000 multifamily rental units.

The proposed ordinance allows developers to pay $100,000 per unit in lieu of providing affordable units, an option expected to be exercised only in the more costly developments in and around the Central Business District. That flexibility was one reason for the Chicago Association of Realtors' support, says president John Vranas.

Community Investment Corp. president John Pritscher says his firm, a consortium of 50 lenders who loaned $57 million last year to finance the rehabilitation of 110 multifamily buildings, supports the ordinance despite reservations about the set-aside requirements lasting 30 years.

"It might be a disincentive for some people who we're trying to draw into some areas to do rehab," Pritscher says. "To me, the issue is preservation of the affordable housing stock we already have in the city."

The Chicagoland Apartment Association supports the proposed ordinance because it "is an incentive-based approach," says EVP Judith Roettiger.