Chicago Cityscape's '1909' newsletter
Sunday, July 22, 2018
In addition to Mayor Emanuel’s proposed initiatives, several alders have proposed three of their own ordinances affecting affordable housing and residential development requirements.
More flexibility in two of the three ARO pilot areas
An ordinance was proposed by three alders to change the Near North and Near West pilot areas to give the Planning department commissioner more authority, in consultation with the respective alder, to approve a variation of the ARO pilot, “including modifications to the number and size of required affordable units, provided that the commissioner finds that the proposed alternative mode of compliance would result in greater benefits, including larqer affordable units or greater affordability levels, than would otherwise result from the strict application of the otherwise applicable reguirements.” (ordinance O2018–4089)
Use Chicago Cityscape’s Address Snapshot reports to look up if a property you own or plan to own is in one of the ARO pilot areas. The report will also tell you what the affordable unit in-lieu fee will be for units that you don’t build on site.
The three pilot areas — Milwaukee Corridor is not part of this revision ordinance — were adopted last year to generate more affordable housing by increasing the number of units in each new development, and to require at least some to be built on-site.
Sweeping (and complex) changes to the ARO
Some of the proposed changes to the Affordable Requirements Ordinance in O2018–5102, called the “Development for All” ordinance, include:
- Increase the minimum number of units that have to be set aside as affordable from 10 percent to 30, 40, or 50 percent, depending on the income area (which can you see when you look up an address on Chicago Cityscape) and the type of benefit (zoning change, city-owned land sale, or financial assistance or TIF funds)
- Change the income thresholds: 25 percent of the affordable units are restricted to households earning 0–30 percent of Area Median Income; 50 percent of the affordable units are restricted to households earning 31–50 percent of AMI, and the remaining 25 percent of the affordable units are restricted to households earning 51–80 percent AMI. (The current standard is 60 percent of AMI.)
- Income thresholds for TIF-funded projects: 25 percent of the affordable units are restricted to households earning 0–15 percent of Area Median Income; 50 percent of the affordable units are restricted to households earning 16–30 percent of AMI, and the remaining 25 percent of the affordable units are restricted to households earning 31–50 percent AMI. (The current standard is half of the units must be for households earning up to 50 percent of AMI, and the other half is for 60 percent AMI.)
- For the first time, smaller buildings would be affected. Buildings with 3–9 units that receive a zoning change or city funding assistance would have to set aside at least one unit as affordable, and two units in the downtown area (the current code only applies to buildings with 10 or more units)
- The portion of affordable units that have to be built on-site would increase from 25 percent to 30 percent in low-moderate and higher income areas, and to 40 percent in the downtown area
- The bedroom mix of the on-site affordable units is specified: 60 percent must be 2+ bedrooms, and 30 percent must be 3+ bedrooms
- Develop an affordable housing search website that shows people where all of the units created by the ARO are located
Alders sponsoring the ARO revisions:
- 10th Ward, Susan Sadlowski Garza
- 16th Ward, Toni Foulkes
- 29th Ward, Chris Taliaferro
- 32nd Ward, Scott Waguespack
- 33rd Ward, Deb Mell
- 47th Ward, Ameya Pawar
Automatic approval of certain Planned Developments
I reported three weeks ago that there was an ordinance introduced that would automatically approve otherwise compliant Planned Development proposals if they met their resiential affordability requirements and were in a ward that had fewer than 10 percent affordable units.
Greater transparency at the CHA
In the same ordinance as the one above, called Chicago Homes for All (O2018–5099), there is a proposal to regulate more of the Chicago Housing Authority’s job to provide public and affordable housing.
- The ordinance would require the CHA to report to the City Council’s Committee on Housing and Real Estate every quarter.
- CHA would have to update its website to show which position people are in on the waitlist for CHA-supported housing.
- The CHA must replace all public housing units one-for-one in redevelopment projects. This would include a project like Lathrop Homes if that would have been redeveloped after the ordinance’s adoption. This may end up affecting part of the upcoming Southbridge redevelopment of the former Harold L. Ickes Homes. It would likely affect all of the future Cabrini-Green area redevelopment.
- Twenty percent of the replaced units must be in “opportunity communities”, which is a ward “where less than 10% of the ward’s housing stock is provided as dedicated affordable housing”.
- The Department of Planning & Development would have to approve CHA’s redevelopment plans.
Sponsoring alders: This is the same ordinance discussed in the previous paragraph.
City Council members have their own affordable housing proposals was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Friday, July 20, 2018
Proposed: Planned Developments with affordable housing in wards with little of it should be automatically approved
A group of seven Chicago alders proposed an ordinance yesterday, called “Chicago Homes for All”, that would automatically approved a Planned Development project that included affordable housing in any ward where less than 10 percent of its housing units is designated affordable.
The ordinance doesn’t specify which wards meet that criteria, nor how to calculate the percentage of housing units in a ward that are “affordable designated housing.”
The goal would be to approve developments like Glenstar’s that has 300 apartments (30 of which are affordable) next to the Cumberland Blue Line station, which was denied at the City Council zoning committee this week.
A Planned Development is a process that the city zoning code requires in some instances (the site or proposed building is of a minimum square footage, or the number of units exceeds a threshold), and is elective in other instances. To use the elective PD procedures, the site needs to be at least 21,875 square feet (seven standard city lots) and meet one of four criteria.
The proposed ordinance, which only applies to proposed Planned Developments, reads exactly like one of the strategies in Metropolitan Planning Council’s anti-segregation report — Our Equitable Future — to “Lessen local control over affordable housing decisions”. The proposed ordinance states:
To reduce the entrenched segregation of Chicago’s stock of affordable family housing and ensure the City complies with its duty to affirmatively further fair housing, the Chicago Plan Commission and Committee on Zoning, Landmarks and Building Standards shall approve a Planned Unit Development (PUD) Application which includes affordable family housing units in wards where less than 10% of the housing stock within the ward is currently offered as dedicated affordable housing, subject to the following approval criteria and decision making process:
The criteria, which can only be refuted with “substantial evidence, are:
- not have an adverse affect on traffic flow or parking
- generate appropriate noise levels
- have a quality of exterior appearance similar to other residences
- complies with all other city standards
It’s a kind of “triggered” or “automatic” zoning approval.
In California, senate bill 35 accelerates approvals if projects meet certain affordable criteria. Recently, in Berkeley, a developer finally got a project approved despite local opposition that delayed it for five years because 50 percent of the units will be affordable.
One issue with the proposal is that the projects aren’t guaranteed to create a good minimum level of affordable units themselves. Presumably, the “complies with all other city standards” clause requires that the projects comply with the Affordable Requirements Ordinance (ARO). That means 2.5 percent of units must be affordable and on-site, and 7.5 percent of units can be “bought out” with an in-lieu fee. If it’s in one of the ARO pilot areas, the ratios are higher, and the in-lieu fees are not allowed (but not all units have to be built on site).
To use the Glenstar proposal as an example, they are building 300 units. Eight of them have to be built on site. While that’s eight more affordable apartments than the 41st Ward currently has, the proposed ordinance doesn’t change any of the rules to require more from property owners — more affordable units, less parking, etc. — who might take advantage of the expedited process, which could be seen as a giveaway to developers.
This would surely resolve the issue of “aldermanic prerogative”, which needlessly kills projects and wastes money (making housing more expensive), but with the way this ordinance is written a developer could propose a Planned Development, get it approved within six months, without having to do anything “extra”.
N.B. The proposed ordinance (O2018–5052) is currently misclassified in the City Clerk’s database as one banning plywood as a material to board up vacant houses. It has the wrong list of cosponsors, and is directed to the wrong committee.
Update 7/19/18: The ordinance O2018-5052 (titled to prohibit wood board up) has been replaced by O2018-5099, fixing the title.
Proposed: Planned Developments with affordable housing in wards with little of it should be… was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Thursday, July 19, 2018
Last month, Mayor Rahm Emanuel’s administration announced several housing-related initiatives. Emanuel is up for re-election in February, and the last two weeks in June this summer seemed to be the densest two weeks of housing proposals in his entire administration (or my memory is losing it). I’ve summarized all 9 of them here.
💸 Today only, unlock all Address Snapshot reports for $4.99 each; the regular price is $9.99. This gets you the same information as a Cityscape Pro membership does (it’s a better deal to subscribe if you look up more than three addresses per month).
- Passed: Property owners who live near the 606’s western portion can apply for a grant up to $25,000 to renovate their house so they can fix issues and modernize it and stay put (our post about this in May)
- Proposed: The Department of Housing will make a comeback in the mayor’s 2019 budget, split from the Department of Planning & Development (Chicago Sun-Times)
- Passed: A program called Opportunity Investment Fund (OIF), administered by the Community Investment Corporation, will make secondary loans (a.k.a. mezzanine debt; the primary lender provides 80%, the loan holder provides 10%, and the secondary loan provides the last 10%) to small and midsize developers at lower than market rates to acquire multi-family housing if they hold 20% of the units as affordable for 15 years (our post from this month; this program is already embedded in the Development & Financial Incentives section of every Address Snapshot report)
- Passed in February (but re-announced in June): Similar to OIF, the Preservation of Existing Affordable Rental (PEAR) program will make interest-free loans to purchase or refinance multi-family housing and make 20% of the units as affordable for 30 years (press release); as of this writing, there has been one loan made, to Chicago Metropolitan Housing Development Corporation for $2 million on a 30-year term (ordinance).
- Committed: 1,600 new units for homeless by way of “non-time limited rental assistance and new subsidized housing units”. This isn’t a new program, but will use existing initiatives to generate these units. The Chicago Housing Authority and supportive housing organizations will be involved in identifying how to reach this goal. (press release)
- Proposed: $40,000–60,000 purchasing assistance in the “Building Neighborhoods and Affordable Homes” program for homebuyers to buy a house in certain community areas, to buy new single-family houses built by developers who got $1 land from the city through the “City Lots for Working Families” program (which was announced last year) (this program seems identical to Mayor Richard M. Daley’s “New Homes for Chicago” and “City Lots for City Living” programs) (press release, ordinance)
- Study: The City will pilot expanding the TOD ordinance to incorporate four bus routes, and a study will evaluate “Incentives to support affordability and allow all residents of communities with TOD to share in the benefits of new development” to address concerns about displacement (press release)
- Study: The Planning & Development department is asking for organizations to reply with information about tiny houses: how building & zoning codes would need to be modified to allow them, and how much they would cost to build (responses are due Friday, July 13, 2018)
- Proposed: Add a 2% surcharge to vacation rental housing (Airbnb, VRBO) to fund more shelter beds for victims of domestic violence (press release, ordinance)
In addition to Mayor Emanuel’s initiatives, several alders have proposed their own ordinances affecting affordable housing. I’ve written about one of them, which would set a policy to automatically approve certain Planned Developments in wards that have little affordable housing. Read about the other proposals in the next post.
One more thing…A new study from the Chicago Area Fair Housing Alliance, reported in the Chicago Tribune by Lolly Bowean, said, “any attempt the city may make to advance affordable housing is destined for inadequacy unless and until the structural barriers imposed by aldermanic prerogative [the policy that individual alders control zoning changes in their wards, and thus type, size, and cost of housing] are dismantled.”
Emanuel’s nine recent affordable housing initiatives was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Monday, July 02, 2018
Emanuel & the Preservation Compact propose new loan fund to increase the affordable housing stock in Chicago
Two weeks ago Mayor Rahm Emanuel announced the creation of an “Opportunity Investment Fund” which the City of Chicago would seed with $5 million. The $30 million fund is predicted to generate 300 affordable apartments with low-interest mezzanine loans. The OIF’s intention is to increase the amount of affordable housing, in existing buildings, by filling a gap in the mortgage market for small and mid-size property owners and developers.
Investors, owners, and developers would apply for funding from the Community Investment Corporation (CIC) to provide them with more equity. Typically, a bank will loan 80 percent of the value (loan to value ratio, LTV) of a property acquisition or construction loan and the developer must provide the remaining 20 percent LTV with their own equity. The OIF loan would cover up to 10 points of the remaining LTV, leaving the developer to cover the last 10 points.
Stacie Young, Preservation Compact director, said this is called subordinate or mezzanine debt. “Our fund will take you to 90 percent, and we’re charging you a very low interest rate,” she said.
“Typically,” Young said, “mezzanine debt in the market might cost you 14–15 percent, and ours is priced at 7.5 percent, in the best case, and it goes up from there. It’s a lot cheaper than the market mezzanine.”
The funds will only be used to acquire existing rental buildings in high opportunity areas — these are areas with a low concentration of poverty, lower crime, and higher employment rates. Preservation Compact is also calling these areas “strong markets”.
The map of eligible areas was made by combining the Chicago Housing Authority’s “mobility areas” with the Illinois Housing Development Agency’s “opportunity areas”.
But, Young said, “We’re not holding fast to these boundaries. A developer could make the case for us to lend to them outside the boundaries.” The final rules will be set after City Council approves the ordinance, and the CIC and Department of Planning & Development commissioner sign an agreement.
Cityscape Pro members can immediately determine if any of their existing or prospective properties are in an OIF area by searching for the address, and looking under “financial incentives” in the resulting Address Snapshot.
Additionally, this information can be seen without a membership by purchasing individual Address Snapshot reports for $9.99.
In exchange for the low interest rate, the owner must make 20 percent of the units in the buildings in the deal affordable for at least 15 years. Young said that “the fastest way to get affordable units in your building is to use Housing Choice Vouchers or project-based vouchers, and contract with the Chicago Housing Authority.”
Young said there are also a couple of other options: vouchers subsidized by the Veterans Administration, or reducing profit margins and subsidizing the units with the other rents. The units would be available to households earning less than 50 percent of the area median income (AMI), and rents would be set by the City’s existing mechanism.
One of the reasons that this new fund focuses on existing buildings is because renovation is faster and cheaper than new construction, but also that landlords in these “strong markets” have high occupancy at market rate rents.
Housing authorities are very eager to place HCVs and project-based vouchers (PBVs, which are subsidies that attach to a building) in strong markets. Yet many market rate owners in strong markets are seeing near 100% occupancy, and would not have a reason to enter into a PBV contract.
The Chicago Housing Authority is a slow-moving housing creator, and it also works with private developers to build its mixed-income projects. This fund could accelerate that in areas with greater opportunities than CHA and the city’s affordable housing fund typically work in, despite their own policies.
Young said that CIC prefers “larger” deals, “bigger than 24–32 units, that would be great, but we have to see what’s available on the market.” Young said 10–12 units is another target deal size. Any deal, however, must be six units or greater, according to Emanuel’s proposed ordinance.
For some clients and deals, it might be possible to refinance a building through this fund.
The $30 million loan fund is expected to preserve 1,500 units of mixed income housing, twenty percent of which would be 300 affordable units. It would be impossible to create 300 new affordable homes for $30 million, but Young and the Preservation Compact believe it can help acquire, renovate, and bring 300 affordable units to the market. It’s possible that some units in existing buildings are already affordable, for now, but use of this fund ensures they will remain affordable for 15 years more.
The City’s $5 million share of the fund would come from the Affordable Housing Opportunity Fund, which property developers pay into when they don’t build affordable residential units on-site. Other lenders so far include MB Financial and the U.S. Department of Treasury’s Capital Magnet Fund.
Emanuel & the Preservation Compact propose new loan fund to increase the affordable housing stock… was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Monday, July 02, 2018
Some of our members have asked about the status of Property Finder this year, because it wasn’t working properly. The map helped our Cityscape Pro members dive deep into our database of over 1.8 million properties in Cook County, and filter them by zoning, size, classification, and location.
We’ve replaced PF with five new topical maps that are easier to use:
- Vacant land (this includes residential side yards)
- Chicago-owned land (using their new and more accurate database)
- Underbuilt apartment buildings (based on Chicago zoning, they could have an additional unit, like this one)
- Single-family houses in multi-family zones (houses in Chicago that could potentially be converted to apartments)
- Car repair shops & filling stations (these are ripe for conversion, as shown here, here, and here)
You can zoom into a specific location by clicking the magnifying glass icon and typing an address. Or, click and drag the map to move to another area. The map will automatically repopulate with properties in that view — just like the popular residential real estate websites (Trulia, Zillow, and Redfin).
Have any questions, or want to suggest an additional topical map? Contact us or leave a comment below.
Topical maps help you find developable property in Chicago was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Wednesday, June 27, 2018
To get the kind of information that’s exclusive to Chicago Cityscape, including TOD status determination, zoning history of a Chicago property, applicable financial incentives, and more, you needed a Cityscape Pro membership.
Now, you can purchase Cityscape Pro-level access on a one-time basis, for each Address Snapshot report that you want.
While a monthly or annual Cityscape Pro membership will give you access to our exclusive information for an unlimited number of Address Snapshot reports, you can instantly purchase individual Address Snapshot reports and have permanent Pro-level access to them. Look up an address now.
For developers and brokers who look up multiple addresses and PINs, it’s a better deal to purchase a membership as buying individual reports will add up. But this is a great opportunity to see what Cityscape Pro has to offer you in an individual Address Snapshot.
Cityscape Pro and those who purchase individual Address Snapshot reports get the following insightful and exclusive features:
- Property owner/manager name and history
- Property owner/manager names of nearby properties
- Download spreadsheet or GIS map of nearby properties
- Zoning Dashboard — we automatically calculate how many dwelling & efficiency (studio) units you can build on any given parcel in Chicago
- Filter and download building permits, building violations, nearby businesses, nearby properties for sale, and other datasets
Purchase the Address Snapshot securely using Stripe, our payment processor, and get instant access to the report. A link to the report is also saved in your My Account & Profile page for quick access to it later.
Buy single Address Snapshot reports and get the same insights as a Pro member was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Thursday, June 14, 2018
Tax Increment Financing (TIF) districts are areas where property tax revenues above the amount collected when the district was established are diverted into separate funds that can only be used to pay for projects that fulfill goals outlined in a redevelopment plan.
They skim the property tax revenue from all property value increases in that district (that’s the “increment” in TIF). In Chicago they’ve been used to pay for new school construction, big box stores, affordable housing, and the Wintrust Arena. The funds have also been used to help small businesses to expand and hire more local workers as well as retrain workers. In local infrastructure, the funds have paid for road resurfacing, bike lanes, and Divvy stations.
Now, a new feature on Chicago Cityscape lets you see what percentage of your property’s taxes are being diverted into a TIF district (provided your property is in a TIF district).
When you look up an address on Address Snapshot, you’ll need to select one of the properties (also called a PIN) in the “Property Info” table to be able to see the stat.
Chicago Cityscape needs to know the specific property’s PIN in order to determine the tax code and then look it up in the Cook County Clerk’s “Tax Increment Agency Distribution Summary”.
Address Snapshot will also tell you how much money the TIF district earned in 2016.
The percentage of property taxes collected into the TIF varies from a few percent to all of it. In Chicago, 359 property owners pay 100 percent of their taxes into into five TIF districts, which collected $1.88 million in 2016.
- Read more about TIFs from Civic Lab’s TIF Illumination Project.
- You can see some TIF-funded projects in Chicago on the TIF map.
Block Club Chicago launched Wednesday morning. The new news organization is staffed by all former DNAinfo Chicago reporters and editors. Congratulations to BCC!
Here are relevant stories:
- Congress Theater renovations gets a nearly $10 million TIF grant
- $2 million renovation of an historic Wicker Park mansion
Reporters who write about neighborhood property development, and related stories about transit and housing, in Chicago, can get a free Cityscape Pro membership to assist them in their reporting, in exchange for a link back to the site as a citation.
Look up how much of your property taxes are going into a TIF district was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Tuesday, June 12, 2018
Opportunity Zones are low-income areas that were designated by states to be places where investors can invest their capital gains for 10 years and get a tax break. Only 25 percent of a state’s low-income Census tracts can be designated, and Illinois submitted its map to the U.S. Treasury before last month’s deadline. A majority of the tracts are in Chicago.
Adam Looney at the Brookings Institution wrote an opinion article about some of the possible effects, while trying to find evidence of their future outcomes based on the OZ’s similarity to Empowerment Zones and New Market Tax Credits.
Looney wrote that there is a risk that it accelerates displacement in already gentrifying areas, so I took a look at the map of Opportunity Zones and compared them to a recent “displacement pressure” map created by the Institute of Housing Studies at DePaul University.
I selected this passage because it summarizes Looney’s article:
In an optimistic scenario, the tax benefits might encourage purchasing and rehabilitating residential property or expanding local businesses. But the value of the tax subsidy is ultimately dependent on rising property values, rising rents, and higher business profitability. That means a state’s Opportunity Zones could also serve as a subsidy for displacing local residents in favor of higher-income professionals and the businesses that cater to them — a subsidy for gentrification. Indeed, the highest returns to investors, and thus the largest tax subsidies will flow to those investing in the fastest gentrifying areas. Most major metropolitan areas are already grappling with the right balance between promoting development and helping existing residents. Opportunity Zones favor one side of that balance. With few guardrails that might promote so-called “smart gentrification” — policies to retain local residents and preserve or expand low- and middle-income housing — it is uncertain whether poor residents will benefit or be kicked out.
There is very little overlap — just one Census tract — between the proposed OZs and IHS’s gentrification map of high-cost areas, which might mean that the OZ map in Chicago was well-designed.
When you take a closer look at this area you’ll notice very few people actually live here — it’s mostly industrial and warehouse users, including at least three breweries. Only 20 of the 490 properties are residential, although there is a significantly-sized affordable housing development south of Lake Street. Outside of that, the rest of residents live in condos in a single building.
The population is low, at 1,638 people, with a density of 8,448 people per square mile. The median household income is $21,250. (Census Reporter) Given that the residents of the affordable housing development pay rents tied to their income, their rents will only go up if their incomes go up.
(For comparison, a typical neighborhood density is my own Census tract which has 24,710 people per square mile. I wrote about on Streetsblog Chicago because IHS’s map rated it “red”, which means it has “significantly” rising prices.)
Measuring gentrification is often a nebulous activity. IHS doesn’t use the word to describe their map, calling theirs a study of “displacement pressure”, or areas where, because of quickly rising housing prices, are at risk of pushing out certain groups of people who are most sensitive to price.
There is a fair amount of overlap, though, between the proposed OZs and the moderate-cost areas on IHS’s map of gentrifying areas (see above). However, I don’t think there would be any way to avoid selecting Opportunity Zones that didn’t avoid potentially-gentrifying areas.
How do the proposed Opportunity Zones line up with gentrifying areas? was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Friday, June 01, 2018
Part of the tax code changes enacted in December 2017
An Opportunity Zone is a low-income area that’s been designated as a place where people can invest their capital gains for 10 years and potentially pay less in taxes than if the capital gains were realized immediately. Each state that wanted to participate had to submit a list of Census tracts — which meet similar criteria as the Low Income Housing Tax Credit (LIHTC) program — earlier this month to the U.S. Treasury.
Look for the “financial incentives” section in the Address Snapshot report — look up an address here.
After the Census tracts are certified, investors will be able to set up privately-managed Opportunity Funds which would own property in the zones. A minimum of 90 percent of the assets would have to be qualifying properties in Opportunity Zones. Capital gains can be reinvested in these funds, which would defer the capital gains tax for 10 years. Then, there are no taxes on the appreciation of the capital gains in the Opportunity Fund if the capital gains are held there for 10 years.
A white paper from Economic Innovation Group (EIG) illustrates the additional income earned because of investing in a Qualified Opportunity Fund. Property owners and institutional investors interested in setting up or investing in an Opportunity Fund should read this interview on Bisnow.
Now on the map: Proposed Opportunity Zones intend to spur investment in low-income areas was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
Tuesday, May 29, 2018
A program proposed last year to help property owners along the 606 park and trail system by three alders has been superseded by just two of the original alders. The “606 Bloomingdale Trail Neighborhood Area Neighborhood Improvement Program”, or NIP, is being cosponsored by Alders Moreno (1st) and Maldonado (26th) without Alder Ramirez-Rosa (35th) — the new ordinance also has the support of Mayor Emanuel.
The proposed legislation is only a minor part of what the three alders proposed last year. The “606 Pilot Act”, for short, would have raised demolition and teardown fees massively to discourage the loss of naturally occurring affordable housing due to demand pressures spurred by the 606 as a neighborhood amenity. In that ordinance, the collected fees would have been made available to pay for home repairs and renovations. It was never discussed in a committee.
The current proposed ordinance borrows the home repair grant program from the first proposed ordinance. The new ordinance has an agreement showing that it would be administered by Neighborhood Housing Services. The city would pay NHS a fee of 15 percent to administer the program.
The home repair program would be available to eligible owner-occupants who have a household income of less than 120 percent of the area median income, and live in a 1 to 4-unit building within the boundary. The program would pay for certain exterior and interior fixes and renovations to improve the property’s condition.
Specifically, the allowable expenses are:
- “exterior improvements including but not limited to roofs, windows, entryways, porches and masonry”
- “up to 30% of the total Grant amount may be used for interior life/safety improvements, but only to the extent that such improvements are designed to address a current (rather than potential) health and safety risk”
- “related permit fees and architect’s fees”
Two requirements ensure minor energy efficiency upgrades: If the owner is adding or replacing insulation in the roof cavity, it must be R-49 level insulation; new heaters must meet Energy Star standards.
Each grant to an owner would not exceed $25,000. The ordinance would dedicate $1 million to the program, paid out of the Affordable Housing Opportunity Fund. If each property owner received the maximum grant, then 40 owners could be assisted. All eligible applicants will be entered into a lottery.
NHS will approve the plans and contracts between the owner and the contractor they select. It appears that grant money is given to the owner before work starts, instead of as a reimbursement.
Recipients wouldn’t be required to pay back the grant after five years if they remain living in the building. If they leave, the grant must be repaid: 100% if they leave in the first year, 80% if they leave in the second year, and so on.
This is the second ordinance with which Mayor Emanuel and the ordinance co-sponsors spurned Alder Ramirez-Rosa. Three months after the first ordinance was proposed last year, Emanuel proposed a separate ordinance that increased the affordable housing set-aside, and preventing buying out of the affordable housing requirement — without consulting community organizations or Ramirez-Rosa. The “ARO Pilot Areas” ordinance passed and has been in effect since November 1 2017.
Mayor, Moreno, and Maldonado propose a new repair & upgrade ordinance for houses near the 606 was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
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