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Mayor's Plan for Increased Density, Neighborhood Investment Passes Council

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The ordinance will charge downtown developers to build additional height and density

The Chicago City Council has approved an initiative by Mayor Rahm Emanuel that would see increased height and density allowances for new developments in the city’s prospering downtown while also generating new money to be reinvested in some of Chicago's most underserved communities. The ordinance will expand the downtown zoning designation to 800 new acres of land — an increase of roughly 20 percent — and will allow real estate developers to simply pay into the mayor’s new Neighborhood Opportunity Fund for the right to construct taller, denser projects.

Under Chicago’s previous Zoning Bonus Ordinance, developers typically achieved density increases by building features like underground parking, winter gardens, and green roofs. Because these types of upgrades only improved the immediate vicinity of development sites, many areas on Chicago’s south and west sides have reaped little direct benefit from downtown’s sustained building boom. While replacing the bonus system with payment into the Mayor’s discretionary fund aims to address this imbalance, there is also a concern regarding how these type of building improvements will be incentivized moving forward.

The new ordinance has also drawn comparisons to Chicago’s controversial Tax Increment Financing (TIF) program, which critics have often equated to a mayoral "slush fund." Though all Neighborhood Opportunity Fund grants of over $250,000 will require city council approval, the ordinance does give the Emanuel administration and appointed Planning and Development Commissioner David Reifman a great deal of control over how and where the money is spent.

The Chicago Sun-Times reported that downtown Alderman Brendan Reilly (42nd) warned of a lack of transparency and third-party oversight in the grant vetting process. Reilly and south side Alderman Leslie Hairston (5th) were the two dissenting 'no' votes cast at yesterday’s city council session, where the measure passed by an overwhelming margin.

The new density bonus tax on developers in the expanded downtown area is expected to generate an additional $10 million for the city each year. The ordinance stipulates that 80 percent of the fund goes towards the construction of new grocery stores and cultural facilities in neighborhoods lacking new investment, while the remainder would be split between the city’s "adopt-a-landmark" program and improvements to Chicago’s transit system and streetscape. The newly passed neighborhood opportunity fund ordinance goes into effect for projects after June 1st.