City awards federal tax credits to 11 affordable housing developments

Eleven new developments bringing a combined 1,083 units of affordable housing to Chicago’s North, South, and West sides are moving forward after being selected by the city to receive Low-Income Housing Tax Credits (LIHTC).

Officials choose projects based on revised criteria from the Department of Housing, which was re-established as a stand-alone city department by departing Chicago Mayor Rahm Emanuel in 2018. The latest batch of developments aim to jump-start economic investment in historically underserved communities, provide opportunities for lower-income residents to remain in rapidly gentrifying neighborhoods, or preserve existing architecturally significant buildings.

The winning proposals include the long-discussed renovation of River North’s Art Deco Lawson House YMCA building, an upcoming tranche of the multiphase Roosevelt Square development in Little Italy, a new apartment building at 19th Street and Racine Avenue in Pilsen, and the Garfield Green development: a winner of an international sustainable design competition that will use modular construction. A full list of the projects—which were selected from a pool of 43 applicants—can be found on the city’s website.

“Federal tax credits are the heart and soul of the affordable housing community—they’re the biggest opportunity we have to make an impact,” said Chicago Housing Commissioner Marisa Novara in a statement. Novara added that this year’s selection criteria ensured that the resources went to “projects that meet Chicago’s most pressing housing needs.”

There are still steps in the approval and zoning process ahead, but the allocation of tax credits represents a key milestone in making these new affordable housing options a reality. Low-Income Housing Tax Credits are an important tool that makes it more cost-effective for developers to provide affordable housing. The eleven projects will cost a total of $398 million to build.

Adding 1,083 lower-cost units is, however, only likely to make a small dent in Chicago’s 120,000-unit affordable housing shortage. That deficiency is only expected to grow in the coming weeks and months as more residents face the economic fallout of the coronavirus health crisis, Novara acknowledged in an interview with the Chicago Sun-Times.

Meanwhile, the city is looking at other ways to increase the supply of affordable housing. Officials are considering lifting the ban on accessory dwelling units (ADUs) such as coach houses and granny flats and could revamp of the Affordable Requirements Ordinance (ARO), which governs the number of affordable units developers must build in new projects that get zoning changes or financial assistance from the city.