By providing incentives to developers, Chicago canincrease its stock of affordable housing without deterring development, harming the local property tax base or exhausting public tax dollars, a study released Tuesday says.
The study, released by two groups advocating affordable housing, was designed to counter arguments by Mayor Richard Daley opposing mandated set-asides for all housing developments.
The study was done by the Balanced Development Coalition and Business and Professional People for the Public Interest.
Under a proposed ordinance co-sponsored by 24 aldermen, developers of projects with 10 or more units would be required to set aside at least a quarter of the units for lower-income purchasers and renters.
Only 10 percent of the newly constructed homes in Chicago during the last eight years have been affordable to households earning 80 percent of the area median income–$54,960, said Nicholas Brunick, the study’s co-author and staff counsel for Business and Professional People for the Public Interest.
Providing incentives that could entice developers to produce housing at reduced rates would help the city attract and retain workers–such as police officers, teachers and carpenters–who form the “bedrock” of the community, Brunick added.
“Many of the people who do the jobs that make our city work are having trouble finding any affordable housing,” he said.
The incentives include density bonuses, which allow developers more units than zoning codes would allow; fee waivers; reduced parking requirements; and expedited permit processing–without the need for a public subsidy.
While density bonuses would increase the total number of housing units, lower costs would lead to more home ownership, thus preserving the tax base, the study says.
The study pointed to cities with mandatory set-asides, including San Diego, Boston and Chapel Hill, N.C., where market-rate development has not been affected. It also pointed to studies of Washington, D.C., suburbs that show units in developments with set-asides preserved or appreciated in value.
Jack Markowski, the city’s Department of Housing commissioner, said those regions are all “extraordinarily high growth areas” in which the housing market has been hot the past decade. Chicago, he said, has only a few neighborhoods experiencing a comparable boom.
“It’s hard to prove the negative,” he said. “It’s hard to say, `This won’t deter development.’ How do you know how much development would’ve happened without this?”
He added the city has focused half its resources in recent years to help the neediest, families making less than $20,000 a year.
The city requires developers who receive city subsidies or city land at reduced cost to reserve some units for moderate-income customers, he said, and will introduce a proposal next year that would give developers density bonuses for developing affordable housing downtown.
If a 25 percent set-aside program had been in place the last five years in Chicago, more than 12,000 affordable housing units would have been created during that time, according to the study.
