Two proposed City ordinances aim to improve public and affordable housing
September 7, 2018

By Nathan Worcester

A group of five aldermen led by Christopher Taliaferro (29th Ward) and Susan Sadlowski Garza (10th Ward) at the June 27 City Council meeting introduced the “Our Home, Chicago” legislative package. Supporters also held a press conference at City Hall on June 28.

Developed by the Chicago Housing Initiative (CHI), the package includes two ordinances. The Homes for All ordinance, which resembles CHI’s earlier Keeping the Promise ordinance, aims to improve the Chicago Housing Authority’s transparency by instituting a regular reporting process to the City Council Committee on Housing and Real Estate. It seeks to enhance the current public housing wait list system’s transparency and would require officials to replace all public housing units at a one-for-one ratio.

Based on its stated goal of fighting residential re-segregation, it mandates creating public housing in low-poverty sections of Chicago and establishes an automatic approval process for affordable applications if the Plan Commission, the Committee on Zoning, Landmarks, and Building Standards, and the City Council do not take action on those applications within 90 days.

The Development for All Ordinance is meant to fix what the CHI sees as shortcomings in the 2015 revamp of the Affordable Requirements Ordinance (ARO). It eliminates “in lieu of” fees, which presently enable developers to pay for off-site affordable housing rather than include it on site. In most of the city, in cases where developers request upzoning, it would require that 30% of units in any development with ten or more units be affordable. In downtown developments, 40% of units would need to be affordable.

Under the ordinance, a quarter of all affordable units would need to have rents at 15 to 20% of area median income (AMI), which translates to $251 to $354 for a three-bedroom unit. Another quarter of the units would need to have rents at 30% of AMI, with the remaining half at 50% of AMI. Downtown, 40% of units would have to be affordable, and 25% of that 40% (10% of all units) would meet those standards. Elsewhere, 30% of units would have to be affordable, and 25% of that 30% (7.5%) would need to meet those standards.

Citing that the ARO yielded only 22 affordable three-bedroom apartments between 2007 and 2017, CHI’s ordinance would require that 30% of affordable units have two bedrooms, with another 30% having three or four bedrooms. In addition, it would mandate that ARO units remain affordable in perpetuity, strengthen wheelchair accessibility standards, and create a web portal with information on available units.

Union support

Aldermen introduced the ordinances with support from several major unions and other organizations, including the Chicago Teachers Union, Service Employees International Union Locals 1 and 73, and United Working Families. CHI also worked with the nonprofit developer Full Circle Communities and other organizations to assess the package’s financial feasibility.

As CHI executive director Leah Levinger explained, the legislation addresses public housing and development, which account for two of the three major areas within CHI’s affordable housing agenda.

“The Homes for All Ordinance is about fixing the public housing system,” said Levinger. “That’s area one. The Development for All Ordinance is about getting to true inclusive development across all of Chicago’s 50 wards. It uses a tool called inclusionary zoning to produce affordable housing in every new market-rate development that comes online where the City is being asked by a developer to grant an upzoning request.

“We’re not actually seeing units produced on site even after the 2015 ARO update,” Levinger continued. “Developers opt out of the requirements more often than they opt in. It is much cheaper for developers to opt out and pay the fee than to actually produce affordable housing on site. We want to shrink the radius [for off-site developments] from two miles to a half mile. ”

Levinger emphasized that the requirements apply only to developers that are upzoning, which is changing the zoning to allow for higher value or more dense use.

Responding to Levinger’s statement that the Development for All ordinance would affect only developers seeking upzoning approval, Brian Bernardoni of the Chicago Association of Realtors (CAR) said the majority of locations available to developers likely would require upzoning.

The third major focus of CHI’s long-term affordable housing agenda is rent control, which neither ordinance addresses. “[It] first has to be fought at the State level and then can be fought at the City level,” said Levinger.

CHI’s partners articulated their strong support for the package.

“Think about this: Rahm Ema-
nuel has control of the entire city—the City Council, our public schools, the police department, and the Chicago Housing Authority, yet he’s allowed to talk about Black population loss as if it’s a coincidence or something beyond his control,” said Chicago Teachers Union Vice President Jesse Sharkey. “This legislation takes a strong step in righting the mayor’s housing wrongs—particularly against Black and Latinx students and their parents.”

According to organizer Lamont Burnett of Organizing Neighborhoods for Equality: Northside, which is working with CHI to promote the ordinances, the package is necessary “because of the way developers are allowed to exclude affordability.”

Local aldermen comment

Some of this community’s aldermen members cited the realities of their own wards in expressing their attitudes toward the ordinances and affordable housing more generally.

“As the alderman of a ward where a third of the housing stock is either public or subsidized housing in a city where less than ten percent of the housing is public or subsidized, I am committed to giving full consideration to the Development For All and Homes for All ordinances,” said Alderman Pat Dowell (3rd Ward).

“I look forward to this important and much needed discussion in
the Housing and Real Estate Committee, of which I am a member,” Dowell continued. “Some wards have almost no public or subsidized housing units, and there should be an equitable distribution of affordable housing opportunities across the entire city and not just concentrated in a few wards.”

“Due to community input, Alderman Solis has been a strong advocate of affordable housing and has mandated that Pilsen has a requirement double the entire City of Chicago,” said Daniel Egan, spokesperson for Alderman Daniel Solis (25th Ward). “He believes this pilot program will take Pilsen to the next level and that it will show keeping communities affordable and livable ensures Chicago neighborhoods are the best places in the world to raise a family.”

CAR’s Bernardoni conveyed his organization’s concerns with the Development for All ordinance.

“This is a bad ordinance,” said Bernardoni. “It should be rejected just from the fact that there was a community involvement process that was done that the aldermen could have been involved in at any point. They all voted for the ARO when it came into effect, not only once but twice.”

Aldermanic prerogative

Bernardoni stated that aldermanic prerogative already provided a means of addressing community concerns with development.

“Aldermen have freely been able to negotiate what works for their community and what does not work for their community,” Bernardoni continued. “Alderman Walter Burnett is able to get developers to bend to what he wants. It’s up to the alderman ultimately to decide what he or she would like in their community, period.”

In contrast, CHI’s Levinger said aldermen’s free rein regarding development allows communities to reinforce economic and racial segregation.

“Aldermanic prerogative can function in white spaces as a new form of restrictive covenant,” said Levinger. “With aldermanic prerogative, if we make affordable housing a parochial, deal-by-deal, alderman-by-alderman system instead of a city-wide plan for equity and access, what we’re going to see is that aldermen in more affluent spaces and more white spaces almost always feel beholden to block the creation of affordable housing because the voters in their ward don’t see themselves as needing that affordable housing.”

Bernardoni also emphasized that CAR also was concerned with the original ARO’s design.

“The development community and the realtors made it very clear that the numbers that they were projecting would not happen,” said Bernardoni. “We assumed that developers would go into the in lieu fund. They [build affordable housing] at a much more expensive rate than the market does. They tout $440,000 units—private developers could build three units at that rate. We asked for a larger area to build off site, but the City rejected that. They wanted the in lieu funds, so that’s what they got.

“If you do not have property tax incentives—which there are none—if you do not do anything about the building code—which is the most expensive in the country—if you do not do anything about incentives in order to get developers to build, then deals do not pencil,” continued Bernardoni. “Developers have left the city. A number of major developers are out now. All the stuff that people are seeing that’s being built in the city, all of that is rental projects that were [planned] before the ARO was codified. That building boom came because they wanted to build before the ARO took place.

“In this ordinance, the same mandates for affordable housing are placed on low-income communities where [units] are already going to be priced affordably based on land costs,” Bernardoni continued. “It’s going to mandate extra affordability on those projects, which again is going to make it a significant challenge for developers to actually go in there and develop. If you want affordable housing, you need to start putting it outside the neighborhoods of the CBD [central business district].

“It’s very easy to say that the realtors and the development community are against it, period,” continued Bernardoni. “I’ve provided alternatives in every single bit of testimony: put property tax credits on the table like they do in New York; do something about the building code and make it more affordable; do something about different kinds of innovation within construction, including prefabricated homes, [tiny homes], or other pilots so we can make the city more affordable and provide more access to it.”

Bernardoni also responded to Dowell’s comments.

“I’m a big fan of Pat Dowell,” said Bernardoni. “If the City of Chicago wants to make housing a mandate, then you can’t have aldermen undermining that, can you? You can’t have aldermen that are for affordable housing yet don’t want to develop at the same time.”

At the June 27 meeting, both ordinances were referred to the Committee on Housing and Real Estate, which is led by chairperson Alderman Joseph Moore (49th Ward) and vice chair Gregory Mitchell (7th Ward) and includes Dowell. Moore and Mitchell will decide whether and when lawmakers consider the legislation. If one or both ordinances then receive a majority of votes, the committee will send them back to the full City Council for a vote.

For the Chicago Housing Initiative, log on to https://www.chicagohousinginitiative.org/. For the Chicago Association of Realtors, log on to https://chicagorealtor.com/.