Housing in Evanston is becoming less affordable for families who have low or moderate incomes, the City’s Housing Commission reported to the City’s Planning and Development Committee meeting on June 9. Susan Munro, chair of the Housing Commission, said a key factor in the reduction of affordable housing is “incomes are not rising as fast as sales prices of homes are rising.”

According to an April 2008 report prepared by Business and Professional People for the Public Interest (BPI), during the period 2000 to 2006 the median household income in Evanston grew from $56,335 to $62,138, or a 10 percent increase. During the same period, the median sales price for a single-family detached home grew from $343,250 to $550,000, a 60 percent increase; the median sales price for a single-family condominium or townhouse grew from $171,500 to $276,500, a 61 percent increase.

Despite the recent downturn in the general real estate market, median sales prices in Evanston have increased since 2006. According to data provided by Ms. Munro, the median sales price for a single-family detached home was $552,875 in the last three months; the median sales price for condominiums was $299,000.

“There will continue to be unmet housing needs for people of low and moderate incomes,” BPI says. “Proactive housing policies and programs are critical to stemming the tide of a growing affordability problem.” The BPI report, commissioned by Evanston Housing 4 All, a network of volunteers and social service and housing providers, was presented to the P&D Committee on June 9 by the Housing Commission.

The City’s One Year Action Plan for FY 2008/09 (for using federal CDBG, HOME and ESG funds) similarly concluded, “The overriding issue in Evanston is the growing disparity between income growth and increases in the cost of living. Housing costs are significantly above the average costs in the Chicago metropolitan area and are exacerbated by high taxes and rapidly increasing utility costs.”

Ald. Edmund Moran, 6th Ward, told the RoundTable, “The BPI Report shows there is a serious need for affordable housing in Evanston. The need is only going to grow through time.”

Fifth Ward Alderman Delores Holmes told the RoundTable, “I am very concerned because there are so many foreclosures in my ward. The connection between these foreclosures and affordability is very real. The economy is pushing folks out of our community.”

At the Housing Commission’s recommendation, City Council decided on June 9 to form a task force to develop a comprehensive plan to address affordable housing.

Housing Prices/Income

A household earning less than 80 percent of the area median income in the Chicago metropolitan area (AMI) is regarded as low-income under HUD’s and the City’s definitions. A household earning between 80 percent and 100 percent of the AMI is regarded as moderate income.

Under HUD guidelines, a household should pay no more than 30 percent of its annual income on housing, including rent or mortgage, property taxes, utilities and condominium assessments. A family of four with an income of $37,700 (50 percent of the AMI for a family of four) could afford a home priced at $113,100. A family of four with an income of $59,600 (80 percent of the AMI for a family of four) could afford a home priced at $178,800.

The median sales price for single-family homes far exceeds what a family of four earning even a moderate income could afford. The median sale price for a single-family detached home in Evanston is about $550,000, more than three times what a family of four earning $59,600 (80 percent of the AMI) could afford. The median sales price for a single-family condominium or townhouse is about $300,000, about $120,000 more than a family of four earning $59,600 could afford.

Evanston’s median home sale prices “remained out of reach for low- and moderate-income persons,” the City concluded in its Consolidated Annual Performance and Evaluation Report for Fiscal Year 2007/2008 (CAPER). “The majority of homes below the median are one- and two-bedroom condominium units. High prices coupled with the contraction in mortgage financing and negligible growth in incomes creates an ongoing scarcity of affordable housing.”

BPI analyzed the number of homes listed for sale in Evanston in February 2008 to determine the number of homes affordable for low- and moderate- income families. This study found that there were no detached homes and only three condominiums or townhouses, with two or more bedrooms, affordable for families earning $37,700 (50 percent of the AMI); there were three detached homes and 37 condominiums or townhouses, with two or more bedrooms, affordable for families earning $59,600 (80 percent of the AMI). This was about five percent of the homes listed for sale in Evanston.

BPI concluded, “Only a small percentage of homes with two or more bedrooms (attached and detached) were priced affordably for low- and moderate-income families.”

The Rental Market

In 2000 there were 4,257 rental units in Evanston that contained two or more bedrooms and that were affordable for a family of four earning $59,600 (80 percent of the AMI), according to BPI’s report. While data is not available for 2006, BPI conclude based on trends in the rental market that the number of rental units has declined.

Fewer rental options exist for lower-income households in Evanston. The City’s CAPER concludes, “There is a very limited number of rental units affordable to very low-income persons without housing choice vouchers or other subsidy.”

As of January 2008, 618 housing choice vouchers (formerly known as Section 8 vouchers) were used in Evanston, down from 1,123 in 2003. The voucher holders are concentrated in south and west Evanston.

The City’s Efforts

The City works with community housing development organizations (CHDOs) and private developers to increase the supply of affordable housing for low- and moderate-income persons. In the last four years the City approved federal HOME grants totaling about $2.4 million to CHDOs and private developers to subsidize the development of nine housing projects containing a total of 30 dwelling units – condominiums, townhouses or single-family homes. The average subsidy per housing unit was about $80,000. The City has also used HOME and CDBG funds to rehab apartment and other buildings and to assist persons with down-payments.

In addition, the City recently passed three ordinances that address affordability issues:

• An Affordable Housing Demolition tax, which imposes a tax of $10,000 on teardowns of residential properties that do not result in replacement housing for the current owners. The City has collected a total of $220,000 since the ordinance was enacted, according to the City’s CAPER. The taxes are placed in the City’s Affordable Housing Fund.

• An Inclusionary Housing ordinance which requires that 10 percent of the units in new, residential, owner-occupied developments with 25 or more units to be affordable dwelling units. In lieu of providing affordable units in the development, developers may pay a “fee-in-lieu” of $40,000 per required affordable unit into the City’s Affordable Housing Fund. According to the City’s CAPER, the City has collected about $380,000 in fees-in-lieu.

• A Downpayment Assistance Program under which the City may make forgivable loans up to $25,000 or $30,000 to households earning up to 100 percent of the AMI. The program is funded with federal HOME funds and the City’s Affordable Housing Fund.

Sue Calder, chair of Housing 4 All, told the RoundTable, “I think the City has made good strides forward, but we have a ways to go. The percent of affordable housing is declining.”

The Task Force

At the City’s P&D Committee meeting, the Housing Commission recommended that the City adopt a comprehensive plan to address affordable housing. Ms. Munro said the comprehensive plan should set meaningful goals, strategies and timelines for developing affordable rental and home-ownership units in particular areas of the City. She said this would guide CHDOs who plan affordable housing projects and who request HOME grant subsidies to assist in their projects.

“What makes it difficult for CHDOs is the unpredictability,” Ms. Munro told the RoundTable. “If a goal is to have 100 new rental units on the west side, they would have some predictability that a project would be approved if it satisfied that goal.” She added, “It would also create more of an onus on City staff to work with CHDOs to develop housing that met the City’s goals.”

Ms. Calder told the RoundTable the comprehensive plan should address, “how we can put affordable housing units throughout the City and not just in certain wards.” She said if it costs more to purchase and develop housing in certain areas, such as along Central Street, “maybe we just have to do that.”

Ald. Moran said he hoped the task force “would build consensus on how we pursue affordable housing,” and that it would “find some way to build greater momentum to addressing affordable housing.”

“Families of four making $60,000 are finding it difficult to find affordable housing in the City,” Alderman Cheryl Wollin, 1st Ward, told the RoundTable. “I’m hoping the task force comes up with a comprehensive plan that will carefully list our priorities so we can address the needs in a very specific way.” She suggested the task force could explore working with large employers in Evanston to develop employer-assisted housing.

“I’m hoping the task force will look at ‘who are we talking about,’” Ald. Holmes told the RoundTable. “If we are going to keep diversity, that has to be a consideration. … People who go to work every day, and who make $40,000 a year, can’t afford to live here. The City needs to be more aggressive in finding ways to make this happen. Let’s be as creative as we can be to keep low-income people in the community.”

Several persons told the RoundTable the City should strengthen the Inclusionary Housing ordinance by expanding its application to rental developments and to smaller projects, by making the requirement to include affordable housing units in a project mandatory (not waivable by paying a fee-in-lieu), or by increasing the fee-in-lieu from $40,000 to $100,000. Ms. Munro said the fee should be high enough to cover the cost of developing an affordable housing unit off-site. Chicago and three other communities in the area have fees of $100,000 or more, she added.

Ald. Moran suggested the task force should also consider providing incentives to developers that would make it beneficial to include affordable units in a project. He said making some concessions to increase density of developments may be necessary to create affordable housing.

At the June 9 meeting, Eighth Ward Alderman Ann Rainey said, in the context of opposing an additional subsidy to a housing developer for a single family home, that the City should consider providing homebuyers with down-payment assistance rather than subsidizing housing developers to develop affordable housing units. She said there are many condominiums available on the market in all parts of the City, and if the City provided homebuyers with down payment assistance, they could select where they wanted to buy a home. She said, “Why aren’t we stopping and stepping back and saying could we get more for our money if we had a different policy. We give most of our money to the developers who write down the cost for one family.”

Larry Gavin

Larry Gavin was a co-founder of the Evanston RoundTable in 1998 and assisted in its conversion to a non-profit in 2021. He has received many journalism awards for his articles on education, housing and...