Debating Affordable Housing


On April 9, the Chicago City Council passed Mayor Richard M. Daley’s version of an affordable housing ordinance. Many activists are concerned that the mayor’s ordinance does not go far enough to alleviate the affordable housing crisis in Chicago.

According to Fourth Ward Ald. Toni Preckwinkle, “We think that this is a good beginning and we’re looking for consideration of our [alternative] ordinance which would apply to the private development community and involve the creation of a lot more units.

Our ordinance is still in committee and we are hoping there will be a point at which it is heard, and we will have an opportunity to provide testimony for its support.”

I next asked Preckwinkle how effective the Mayor’s affordable housing ordinance would be.

“I was there when the Commissioner of Housing (Jack Markowski) testified in favor of the ordinance, and what he stated at that time was that the ordinance would provide 500 to 1,000 units of affordable housing per year,” said Preckwinkle.

Based on figures also asserted by the councilman, at that rate, it would take at least 50 years even to begin to make a dint in the affordable housing need citywide.

Preckwinkle had figures showing the present need set at about 50,000 units for the Chicago area alone. Many housing advocates are certain those figures will grow incrementally over time.

Afterwards, I immediately called the Mayor’s Department of Housing to see if someone might amply explain the ordinance to me and was directed to Stacie Young.
Young is the director of policy and research in the Department of Housing.

RJ: “I have some really important questions related to those often asked by our readership. Most of our readers are really interested in Ald. Preckwinkle’s suggestions for affordable housing and exclusionary zoning. We understand that the City Council actually accepted Mayor’s Daley’s affordable housing plan instead.”

SY: “The mayor put out an ordinance; actually, there are a few initiatives that he talked about last fall in terms of affordable housing.
This is one piece of it.
Another piece of it is density bonuses for downtown.

We know that Preckwinkle’s ordinance is out there but, when you said instead, well, I wouldn’t put it that way. They never actually went head to head, and this is just one of the things the mayor is doing for affordable housing.”

RJ: “Well, I understood that the mayor doesn’t care that much for Preckwinkle’s citywide inclusionary zoning proposals, that he favors an alternative. That’s why I used the term, ‘instead of.’

Right now, it seems like the City Council is agreeing with the mayor. Last week (April 9th), they chose to positively affirm the mayor’s position by their vote.

The vote was overwhelmingly yes, with only one dissenting vote.”

SY: “I would explain the ordinance to you this way. Simply, what it says is that the developers who receive city financing would be required to provide 20 percent of the units as affordable housing or developers receiving city owned land at a discount, then you must set aside 10 percent of your units as affordable.

The affordability level in a for-sale development is 100 percent of area median income and that translates to a family of four with an income of $75,000 a year.

In the case of a rental development, the affordability level for a family of four comes to $45,000 a year or 60 percent of area median income.

“If a developer purchased city-owned land and the city wrote down the price of that land and gave it to the developer at a discount, they have to set aside 10 percent of their units as affordable.

“It’s a standard way that we gave affordability levels. I believe that HUD annually puts out a number that reflects the median income of households in the area. They look at incomes for households in the area and figure out what the median is – in other words, what’s right in the middle

“That’s what they found for their median, so that’s $75,000, or 100 percent of median. Next, they look at different proportions on that level, and so $45,000 being 60 percent of $75,000 is the affordability level on a rental property.

“The ordinance requires that the developers’ affordable units stay affordable for 30 years.
Now, when you ask about the Preckwinkle ordinance, on the other hand, it is asking for a citywide mandate – a requirement on every single development.

Our concern is that, since this idea has not been tested in this city, whether requiring this type of mandatory set-asides would discourage investment in Chicago.”
RJ: “In my research on the Internet about inclusionary zoning, Boston comes up as a model city.”

SY: “However, Boston is not mandatory. It is an executive order and relates similarly to developments that are receiving city financing and city-owned land and developments receiving administrative changes – that is to say, zoning changes and the like.”

RJ: “What did Preckwinkle model her plan after?”
SY: “There are other cities that have citywide mandates. Those cities tend to be much smaller or include a whole county and are therefore less urban. In that way, they are different from the kind of metropolitan environment one encounters in a city like Chicago.

“Montgomery County, that’s a whole county and [the policy] was imposed 25 years ago.
There, developers were dealing with, primarily, large parcels of land in a decidedly less urban area.”
RJ: “What is the mayor proposing and why are his initiatives much better for our purposes here in Chicago?”

SY: “We believe that incentives are the way to go. For those developers who want to receive the incentives, they can include the affordable housing discount when they go before the city seeking permits and other business.”

RJ: “Why are incentives the way to go?”

SY: “Incentives aren’t going to discourage investments. Developers can figure out on a case-by-case basis whether the incentives work for them.
From what we understand, the other mandatory programs across the country have not really been tested in an urban area like Chicago.

The closest in population is Boston and it is not a citywide mandate.
There the subsidies are only for administrative changes, state financing and city-owned land.

“The other cities are much smaller.
If the developer needs some change from the city such as zoning variance if they are receiving an administrative change, then they have to include the affordable housing in their development.”

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