New affordable housing initiative to curb gentrification headed to Chicago City Council

City of Chicago

A three-year-long pilot program aimed at bolstering affordable housing in three Chicago neighborhoods experiencing unprecedented gentrification is expected to be introduced to the Chicago City Council tomorrow. Sponsored by Mayor Rahm Emanuel along with Aldermen Walter Burnett and Joe Moreno, the initiative would cover the city’s Near North side, Near West side, and the booming Milwaukee Avenue Corridor.

The move represents a major change to Chicago’s existing Affordable Requirements Ordinance that currently requires 10 percent of units to be priced affordably in new projects receiving zoning changes from the city. The new pilot program proposes to increase the required number of affordable units, completely remove the option for developers to “buy out” of providing said units, and tweak the resident eligibility requirements.

Specific changes across the three designated pilot zones are as follows:

• In the Milwaukee Corridor Zone, the measure would increase the 10 percent ARO unit obligation to 15 percent if a developer opts to build on-site and 20 percent if a developer opts to build off-site within the pilot area. It also increases the number of households eligible for affordable units by expanding the pool of eligible tenants to those earning up to 80 percent of the Area Median Income (AMI) of $50,600 for a two-person household.
• For the Near North Zone, the the 10 percent ARO unit obligation would be boosted to 20 percent. Half of the units would be required to be built on site or off-site within two miles in the same ARO zone (60 percent AMI/$37,920 for a two-person household). The remainder could be built anywhere in the same pilot area (100 percent AMI/$63,200 for a two-person household).
• Meanwhile, in the Near West Zone, the pilot program would increase the ARO unit obligation to 15 percent. Here, two-thirds of required units must be built on site or within 2 miles and in the same ARO zone (60 percent AMI) and one-third of the required units could be built anywhere within the pilot area (100 percent AMI).

If all goes as planned and the measure is ultimately adopted, it is expected to create up to 1,000 additional affordable units across the three pilot areas deemed to be experiencing “gentrification pressures” due to new market-rate development. Since the City last modified its ARO rules in 2015, the Chicago Tribune reports that 536 affordable units have been delivered in new buildings with $18.5 million collected in “opt out” fees.

“Access to affordable housing is critical to Chicago’s legacy as one of the world’s most livable big cities, especially as the real estate market undergoes unprecedented neighborhood development,” Mayor Emanuel said last week via statement. “This initiative will create more affordable units in targeted areas while helping the city to assess the most effective ways of meeting neighborhood affordable housing goals.”

While an influx of affordable rate units will provide needed relief to some renters, it’s worth noting that gentrification is far from the only reason many Chicago neighborhoods are seeing prices climb. With landlords feeling the squeeze from multiple tax hikes, it’s natural that some of that pain is being passed to existing and prospective tenants.

• Mayor's pilot program would boost affordable housing units [Chicago Tribune]
• Mayor Emanuel Announces Pilot Initiative To Generate New Affordable Housing Options In Gentrifying Neighborhoods [City of Chicago]
• Previous Chicago gentrification coverage [Curbed Chicago]