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Developer, Trade Association Say City's Affordable Housing Ordinance is Unconstitutional

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There have been plenty of neighborhood battles over the lack of new affordable housing units being built in upcoming areas, but now one developer and a trade association are fighting back against the city for its affordable housing rules that apply to new developments. According to the Tribune, Hoyne Development and the Home Builders Association of Greater Chicago have filed suit against the city for its Affordable Requirements Ordinance (ARO) that requires developers to reserve ten percent of residences in buildings with ten units or more at affordable pricing (households earning up to 60 percent of the area median income). Developers also have the option to "buy out" of the ordinance and pay a fee of $100,000 per unit that they are required to provide. However, some alderman don't provide developers with the option to buy out, and require that developers provide the affordable units on site. Hoyne Development and the Home Builders Association of Greater Chicago have claimed that the ARO is unconstitutional and that is essentially the same as taking private property without "just compensation."

According to the Tribune, the suit specifically points to a new project at Irving Park Road and Hoyne Avenue in the North Center neighborhood where Hoyne Development has obtained a zoning change to build new condos and apartments on the site of former Ford dealership. The city says that the developer needs to provide two ARO units or pay a fee of $200,000, but the developer believes that they were wrongfully targeted.

The Affordable Requirements Ordinance has been lauded by affordable housing advocates since it was enacted in 2003, but many feel that ten percent of the units in new developments is still not enough. However, in just a few weeks, the rules will change to make the ordinance tougher on developers. The new rules still require that developers provide at a minimum ten percent of new units for affordable rates, but has changed the rates at which developers can buy out. If developers are building a project downtown, they will have to pay $175,000 per unit to buy out. In most other areas, developers will have to pay $125,000 per unit, and in lower income areas, developers will have to fork over $50,000 per unit. The new rules also provide developers with a "density bonus" for building near transit hubs. The updated ARO will affect projects that are proposed on or after October 13, 2015.

·Developer, builders group sue city over affordable housing rule [Tribune]
·Affordable Requirements Ordinance [City of Chicago]
·ARO Enhancements: Summary [City of Chicago]