Housing Integration Proposal #1: Expand and re-direct the City’s Affordable Requirements Ordinance to produce more units overall, more integrated developments and better serve families.
Return to 2019 Chicago Housing Agenda
Recent research has bolstered the positive impacts of moving children from low-income . Children who were younger than 13 years old, who moved to a low-poverty neighborhood had significantly higher earnings by their mid-twenties. Increasing access to low-poverty community with quality schools has long been an important strategy in promoting equity in our society (Chetty, Hndro & Katz 2016)
A centerpiece of how modern, progressive cities accomplish this is through inclusionary housing policies that link development of affordable housing to new development of market-rate residential housing. Chicago’s Affordable Requirements Ordinance has been an important tool, but needs to be expanded and revised to more effectively addressing the need and create more affordable housing in more places.
Proposal 1. Expand the PILOT areas created under the 2017 Ordinance to more areas required to have 15% of units build-onsite or 20% built in the same neighborhood. These would add to the existing PILOT locations of Milwaukee Corridor, Near West, Near North (and Pilsen as of Jan 1, 2019). Proposed “PILOT” areas include: South loop, Lincoln Park, Hyde Park, Logan Square, Woodlawn and any residential development city-wide on land previous publicly-held lands.
Proposal 2. Expand the in-lieu fee to $350,000 per unit when studio and 1BR units are not built on-site everywhere under the program and $300,000 per unit for all 2BR units and above. This should intentionally serve as an means to promote construction of more family housing at all levels of affordability.
Proposal 3. Restore ARO to the concept of “value capture” that capitalizes on the byproduct of previous public investments (ones that created today’s hot markets and land values) and curtails the over-reliance on other public subsidies. Simply-put, this seeks to normalize the view within the local market that ARO projects create affordable housing as a return on previous public investment. In practice, this would mean that ARO projects that benefit from other direct government subsidy programs (LIHTC, Project-Based Vouchers, etc) will be required to deliver twice the requirement for affordable housing.
Proposal 4. Require units created under the ARO to have the same bedroom composition of the units in the project that triggered, regardless if they are on-site or completed nearby. It is widely recognized that lack of building family units is not in the interest of affirmatively furthering fair housing, and it currently a major flaw in the ordinance since inception.
Proposal 5. Improve transparency and reporting of projects covered by the ARO. As recommended by my own analysis of the Quarterly Affordable Housing reports provided by DPD on the ARO, each projects covered by the ARO should published in the City of Chicago Data Portal along with the overall unit requirement (not just the units proposed), the associated in-lieu payment fee, the bedroom sizes and general inventory of challenges and successes in the programs. The City of Cambridge, Massachusetts produces such a report that could serve as an example for Chicago.
Proposal 6. Expand the ARO to require linkage payments from commercial and office developments over a reasonable size threshold (similar to how the ARO applies to projects with more than 10 units). These projects increase the demand for housing and should also be held responsible for funding affordable housing through a $3-$7 per square foot of construction payment into the appropriate affordable housing fund. Boston has implemented this policy for several years, recently increasing the affordable housing linkage fee to $9.03 per square foot of construction and $1.78 per square foot of job training.
