City initiative designed to increase affordable housing in parts of community; opponents express skepticism
January 4, 2018

A Chicago Department of Planning and Development map shows the zones in which the City has enacted new affordable housing requirement.

By Madeline Makoul

As worries over gentrification mount, the City is launching an initiative to increase affordable housing in several neighborhoods.

Mayor Rahm Emanuel announced the pilot plan will “create 1,000 affordable units,” improving upon the 2015 Affordable Requirements Ordinance (ARO), which required that 10% of units in new developments reflect affordable prices. The pilot increases the number to 20% of units in a Near North Zone that includes parts of the Near West Side and West Loop and 15% in a Near West Zone that includes parts of the West Loop and West Haven, said Peter Strazzabosco, deputy commissioner for the Chicago Department of Planning and Development.

Strazzabosco said officials created the new requirements in light of community concerns about affordable housing. The plan, which went into effect on Nov. 1 and will continue until Dec. 2020, took effect as two pilots, the Milwaukee Corridor Pilot on the North Side and the Near North/Near West Pilot.

“The goals of the pilot initiative are to mitigate the impacts associated with gentrification, to better protect the interests of the area’s economically vulnerable residents from demographic and housing market change, and to preserve the economic diversity that is critical to a healthy economy,” Strazzabosco said.

Plan details

The City selected these zones for the updated ARO because of their increased gentrification or “susceptibility” to it, their location as part of upcoming or new “City investments or planning activities,” or their having undergone a “recent or completed planning process in which affordability was identified as a community concern,” Strazzabosco said.

While the Near North and Near West form a single pilot area, the City customized requirements for each.

For the Near North Zone, the unit obligation is 20%, half of which “must be built on site or off site within two miles in the same ARO zone,” Strazzabosco said. Such units target those earning up to 60% of area median income (AMI), or $37,920 for a two-person household, he said. Developers can build the rest of the units throughout the pilot area for “residents earning up to 100% AMI,” or $63,200, according to a City statement.

The Near West Zone has a unit obligation of 15%, or 20% if using tax increment financing. Unlike the Near North Side, where half the units must be on site and 60% AMI, two-thirds of units on the Near West Side must be on site or within two miles. The remaining third must be within the pilot area and up to 100% AMI.

“The pilot addresses the unique needs within two distinct zones to create affordable workforce housing for the thousands of new jobs expected to be generated in the area by the North Branch Industrial Corridor modernization initiative and to stabilize Near West Side neighborhoods experiencing limited housing investment,” Strazzabosco said.

Beyond adjusting the percentage of affordable units and the AMI, developers no longer will have the option to buy out of the above standards, Strazzabosco said. Previously, developers could pay an “in lieu fee” instead of implementing affordable units in their new developments, but the new plan removed this to further ensure growth of affordable housing options.

Community concerns

While officials updated the ARO since the 2015 version, some community members do not believe it will benefit long-time residents barely able to remain in the area.

Mary Tarullo, the associate policy director for the Chicago Coalition for the Homeless, said that, while the group supports affordable housing plans from the City, it also is “fighting for these programs to serve families struggling at the lowest income levels.” While the new plan creates more affordable housing, she contends it is not affordable enough for area families.

“These pilots fall short because the additional units they will require serve people at even higher incomes than the current ARO,” Tarullo said. “Also, the Near North/Near West Pilot allows developers to substitute owner-occupied units where they would otherwise have been required to provide rental housing. That puts these housing units even more out of reach for struggling low-income families as well as many middle-income households.”

Leah Levinger, executive director for the Chicago Housing Initiative, echoed those concerns as she explained the downside to raising the AMI to 100%. Levinger said this shift is “unprecedented,” stating that, for decades, officials defined affordable housing at 60% of AMI as the “top bracket.” To redefine it at 100% no longer represents families in the area, Levinger said.

“They eviscerated the definition of affordable housing in the Near North Side,” Levinger added. “Affordable housing ordinances historically have served households at 60% of area median; that ends up being for a family of four around $47,000, but the Near North
Side raises that median.”

Strazzabosco said the increased AMI will aid in creating a “healthy, mixed-income residential environment” that will help to ensure future growth. While the raise in AMI for a portion of units does serve a person with a higher income level, Strazzabosco said it will help to promote mixed-income developments, an adjustment in an area where there was a “lack [of] private investment.”

However, with this higher median, Levinger said the historic African American and Latino population in the area, who have an average income of $30,000 to $40,000, will not benefit. Instead, Levinger said these new plans appeal to the single, entry-level tech worker.

Like the AMI that suits the needs of a higher income individual, so do the units, Levinger said, noting the affordable housing that comes from the plan will be mostly studios and micro apartments, neither of which suits families. To Levinger, this factor makes plain a “mismatch” between whom the City says it will help and the plans’ actual outcomes.

“There’s something really cynical about talking about displacement of families, primarily families of color, and then creating housing that is really just targeted at a much more white, professional resident,” Levinger said. “It’s just really hypocritical what’s happening here.”

Strazaabosco, on the other hand, clarified that the ARO units must “match the mix of market-rate units” in each project. Strazzabosco explained that if a building includes 50% one bedrooms, 30% two bedrooms, and 20% three, the units offered from the ARO will match the same ratio. Furthermore, Strazzabosco said the City has an array of strategies to help families at a variety of income levels with housing.

“ARO units are directed to working families that can’t afford market rates but also don’t require additional subsidies or services,” Strazzabosco said. “Other City programs help to create affordable units that address other priorities, including family units. For example, the City’s multi-family affordable housing programs involving in-lieu fees, tax credits, loans, bonds and other resources have supported approximately 3,500 units (including 538 units with three or more bedrooms) in the last four years.”

Siri Hibbler, founder of the Field of Dreams Visionary Center—non-profit that “exists to eradicate homelessness and poverty”— called the situation for families in these zones dire. Hibbler described the many families with whom she works, struggling to afford shelter for themselves and their children with a minimum wage job in an ever increasing housing market.

As prices continue to go up, Hibbler has seen shelters grow increasingly overcrowded, leaving struggling families with fewer places to turn.

“The city is truly in a state of emergency,” Hibbler said. “I don’t know what bubble our City Hall is living in, but folks down here on the ground are seeing this thing, and it’s very serious. People are panicking, and we are running out of answers. Change is good when it’s good change—that’s when it’s not forcing people out.”

Both Hibbler and Levinger have seen the effect family displacement has on the community. As a result of families forced to move elsewhere, school enrollment has declined, Levinger said. Because schools receive funds on a per pupil basis, fewer students enrolled means a serious impact on a school.

“When you lose students, you lose after-school programs, music programs, arts programs, and libraries and it puts the schools more at risk of closure,” Levinger said. “Something has to be done to stabilize the family population in these areas.”

Levinger said the Chicago Housing Initiative proposed some changes to the plan, suggesting the pilot mandate that two- and three-bedroom units be required, but officials rejected the idea.

While the plan remains in effect until Dec. 2020, Strazzabosco said the City will continue to watch the effects it produces , ensuring it benefits the intended groups.

For more on the Department of Planning and Development, log on to https://www.cityofchicago.org/city/en/depts/dcd.html. For more on the Chicago Coalition for the Homeless, see http://www.chicagohomeless.org/. To learn more about the Chicago Housing Initiative, log on to https://www.chicagohousinginitiative.org/. For the Field of Dreams Visionary Center, see https://fieldofdreamsvisionarycenter.com/.