The city’s Department of Planning and Development has spent only 11% of this year’s resource allocation goal for affordable housing, while it added 42% of its unit goal, according to the department’s first quarter affordable housing report for 2016.
Attendance: Chairman Joe Moore (49), Pat Dowell (3), Sophia King (4), Gregory Mitchell (7), Sue Sadlowski-Garza (10), David Moore (17), Michael Scott, Jr. (24), Ariel Reboyras (30), Gilbert Villegas (36).
For 2016, DPD has projected commitments of over $250 million to assist more than 8,000 units of affordable housing. In the first quarter of 2016, from January to March, DPD committed almost $27 million of those funds to support 3,300 units of affordable housing.
At the City Council’s Housing Committee’s regular hearing on the department’s progress towards bringing more affordable units to Chicago, aldermen pressed DPD staff to explain the funding status of a special trust fund the city has in place to collect money from downtown developers for affordable housing.
In the fall of 2015, stricter metrics took effect requiring developers to provide up to 20% affordable housing units or pay an in lieu fee that, depending on where the project is located, ranges from $50,000 to $175,000 per affordable unit not added on site or within a mile of the new development. There was a rush of applications filed before the October 2015 cut off date before the new Affordable Requirements Ordinance (ARO) would take effect. And since payment is due when the developer applies for a building permit, not when the zoning application is approved by the city, it will be a while before the city starts recouping some of that money, DPD staff told aldermen.
DPD’s Tracy Sanchez said the Affordable Housing Opportunity Trust Fund currently has collections from payments made between September 2014 to September 2015. “To date, I don’t think it is impacting it very much yet, because they just became effective, the 2015 ARO. So we will probably see more effects of it going forward, like later on in the year or next year,” she said.
Cary Steinbuck, Executive Director for the Chicago Low-Income Housing Trust Fund, added that the fund relies on two sources of revenue: money collected through the Affordable Housing Opportunity Fund, which she said came in higher for 2016, and state funds.
“Unfortunately we have received no state money. We are tied up in the state budget, and even though our court case was successful there’s back money owed to the trust fund,” she said. Steinbuck said once the department is successful in recouping that money, the fund’s board of directors will decide how to spend it.
“This will be the first time we have new units in more than five years. Only thing we have been funding is relocation of subsidies, and those are mostly selected by the tenants themselves as to where they want to relocate or to move,” she said.
The Mayor’s new Neighborhood Opportunity Bonus the City Council passed this month was briefly brought up during the hearing. The plan, which takes effect in June, will leverage downtown development by collecting fees from developers in exchange for the ability to add extra square footage to their buildings. Eighty-percent of the money collected will go into the new Neighborhood Opportunity Fund. DPD will grant out that money to spur development in the city’s most blighted neighborhoods.
Kevin Jackson with the Chicago Rehab Network, an organization that regularly analyzes DPD’s quarterly affordable housing reports, said they’ve determined the new fund “will not result in any meaningful loss of affordable housing funds.”
But Jackson had some suggestions for how to improve transparency, such as creating a scorecard for evaluating competing projects and “better defined avenues for community control.” Jackson said one example of more local control would be to create advisory groups similar to the Pilsen Land Use Committee to publicly vet proposals. He’d also like DPD to hold hearings on its progress, similar to how the Housing Committee holds quarterly reports on its efforts to reach its affordable housing goals.