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To view the Balanced Development Report,
please click here: Campaign
Report
Balanced
Development Victories
Draft 5/29/07
-Six years ago, developers who got city land or TIF money didn't have to do anything.
Now there is a law that requires 10 and 20% set asides in those cases.
-Three years ago, developers downtown would get density increases if they gave
enough money to the alderman. Now they give money for affordable housing.
In fact, we have $24 million promised for affordable housing, $6 million
that's come in for the Low Income Housing Trust Fund and new construction of
affordable housing.
What did we win on Monday, May 14, 2007:
-The city says this set aside will create 1,000 units of affordable housing per year.
What if half of those developers opt for the in lieu of option? That's $50 million
new dollars for very affordable housing per year. -The city currently spends less than that of city dollars on affordable housing - so
our work has more than doubled the resources the city is dedicating to affordable
housing.
-Chicago is now the biggest city with Mandatory Inclusionary Housing, and
the biggest city to cover so many types of developments.
-11 Aldermen stood strong with us, even as the Mayor pulled out all the stops to
pull people off (this is a Mayor who is angry when 1 alderman votes against
his budget).
-9 new aldermen where elected, most with affordable housing as a part of their
platform. 7 of them are strongly with us! The Mayor knows that.
11+9 is a political block - especially when other aldermen have interests in
our other progressive issues. Balanced Development, along with Living Wage,
set the stage for some real further progress on our issues.
Chicago’s
Affordable Requirements Ordinance (ARO) Expansion
What Is It?
o
The ARO was created in 2003. It mandates that any city development which receives land
from the City is required to set aside 10% of units for affordable housing, if
City financial assistance is given 20% must be set aside. It was expanded in 2007 to include a 10% set-aside for:
o
Any type of City land, not just discounted land.
o
Any zoning change (i.e. commercial to residential) that increases
density use.
o
All planned developments, except those outside of the downtown
areas that don’t take the density increase.
o
Only applies to developments with 10 or more units
Who does it help?
o
Affordable Housing is targeted to those earning:
o
60% Area median income(AMI) for rental housing ($45,000/family of
4)
o
100% AMI for owner occupied housing ($75,000/family of 4)
o
The 10% set aside requirement can be decreased if more for-sale
units are targeted to households at or below 80% of the AMI
Can a developer opt-out of
building affordable units?
o
There is an in lieu alternative: A developer may pay a fee of
$100,000 per affordable unit. This money is deposited in the recently
established Chicago Affordable Housing Opportunity Fund.
o
The fund’s money will be allocated so that 60% of the revenues
fund construction or rehabilitation of affordable housing.
The remaining 40% will be split between the Affordable Rents for Chicago
program and rent subsidization.
o
Failure to pay the fee-in-lieu or build affordable housing shall
result in a fine two times the fee amount, and could result in the revocation of
the developer’s real estate license.
How long must the units be
affordable for?
o
Units are required to be affordable for at least 30 years.
It is expected, but not required, that most units will be placed in the
Chicago Community Land Trust (est. 2006).
o
The Chicago Community Land Trust(CLT) creates a long term lease
designed to balance the goals of affordability with providing a fair return on
the homeowner’s investment.
o
If a rental unit is rented at a price beyond the affordability
requirements the owner will pay a fee of $500/day for each day of
non-compliance. If an affordable unit is sold at market rate the seller is
forced to pay a recapture fee, reimbursing the city for the 2nd
mortgage carried on the unit.
When does it take effect,
and who is exempt?
o
Effective 90 days after passage and publication. Exemptions:
o
Any zoning change or PD application filed prior to effective date.
o
Development on land acquired by developer within 2 years prior to
passage.
How much will it help?
o
Production estimate: 1,000 affordable units per year (six times
current levels). Since 2002, 1,383
affordable units in market rate developments have been built (857 through
the original ARO ordinance).
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