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On April 27, the City’s Planning and Development Committee considered proposed amendments to the City’s “Inclusionary Housing Ordinance” that was adopted in 2007 as a way to increase affordable housing in the City.
As it stands, the ordinance applies to new developments with 25 or more owner-occupied units. Under the ordinance, a specified percentage of the new housing units must be affordable to those households whose incomes are less than 80% of the area median income (AMI) and to whose incomes are less than 100% of the AMI. In lieu of these set-asides, a developer may pay a $40,000 fee per unit into an affordable housing fund.
The ordinance was heralded as a way to increase the amount of affordable housing in the City. Yet, it “has not resulted in the development of any affordable housing units or contribution of fees-in-lieu to the Affordable Housing Fund,” according to a City memo. In addition, in the last decade, the City has lost about 45% of affordable housing units.
The purpose of the proposed amendments to the Inclusionary Housing Ordinance is to expand its reach and provide affordable housing units.
At the April 27 Planning and Development Committee meeting, aldermen briefly discussed their views on the proposed amendments to the Inclusionary Housing Ordinance, which would expand its reach. Those proposed amendments were held in Committee because the Chair of the Committee felt an alderman absent from that meeting should be included in the discussion.
The proposed ordinance, which first came before the Planning and Development Committee last July, carries four major changes to the original ordinance: It covers both apartment and condominium developments, as well as condominium conversions, rather than only new condominium projects; it includes developments of five or more units, rather than 25 units; it increases the amount of required affordable units in the development from 10% to 20% for projects receiving public funds; and it increases the payment-in-lieu option from $40,000 to $100,000 per unit. The rental units must remain affordable for 25 years.
Income-eligibility limits have also been adjusted to make the rental units affordable to lower-income families: Half of the affordable rental units would go to households earning less than 60% of the area median income – currently $45,600 for a family of four – and half to households earning less than 30%, currently $24,250.
During the citizen comment portion of the meeting, residents and real estate personnel offered differing views concerning the proposed changes
Priscilla Giles said, “What happened to the Evanston that used to attract families? The City is for sale. Developers think they can pay their way out of providing affordable housing. Somehow every green space is being sold.”
Letitia Barge said, “My concern is inclusionary housing. … Inclusionary housing should increase diversity. What good is a set-aside if the developer is willing to pay instead of [constructing] units? They would prefer to pay the fine than include.”
Brendan Saunders of Open Communities in Winnetka said that organization supports the zoning amendments and suggested that the City consider incentives – such as a relaxation of parking or density requirements.
Reverend Debra Bullock of St. Mark’s Episcopal Church said from what she hears in conversations, Evanston’s “greatest asset is diversity. Adopting these amendments will not do enough, but it will help.”
Jane Wickenkamp said, “I’m concerned about there being enough affordable housing in Evanston. Seniors are being forced or priced out of Evanston. The luxury apartments that have been built are not affordable to seniors and those on fixed incomes.
Realtor Dan Schermerhorn offered an opposing view. He said, “I’m asking you to consider the effect of the proposed changes on small buildings.” He noted several recent smaller developments, such as the one at 2500 Green Bay Road, and said it is difficult to ask the developer of a small project to add $200,000 to the cost of a building. “The reality is that developers of small buildings cannot afford this.”
A representative of the North Shore-Barrington Association of Realtors said the organization believes that affordable housing is a good goal for the City, but “this very narrow ordinance will make Evanston more expensive. The ordinance seeks to penalize those who are providing housing.”
The five aldermen present – Delores Holmes, chair, 5th Ward, Judy Fiske, 1st Ward, Melissa Wynne; 3rd Ward, Don Wilson; 4th Ward, and Ann Rainey, 8th Ward – briefly discussed the proposed amendments.
“I keep hearing that developers are going to pay for [affordable housing] but the residents are going to pay, said Ald. Wilson. He said the added costs to provide affordable housing would likely be passed on to the tenants or to purchasers of the units. “It’s a focused tax. I don’t think we should be taxing tenants and condo owners,” he said.
Ald. Wynne said, “A concern that I have is adaptive re-use – when vacant warehouses are converted into housing. They might be smaller, and this ordinance is too burdensome for smaller buildings.”
“How many projects are in the pipeline that would be affected by this ordinance?” Ald. Rainey asked City Economic Development Director Mark Muenzer.
“I can think of two large-scale projects – one with 110 units and another with 200-plus units,” Mr. Muenzer said.
“If I were to vote on this tonight, I would vote ‘no,’” said Ald. Rainey. “It is too unrealistic. What will we do if we pass this and then have no development?”
Ald. Wilson said, “I’d be interested in hearing about incentives other communities are using.”
Mr. Muenzer said some typical incentives are reductions in parking requirements, expanded density allowance and reduction in the cost of permit fees.
“I will not go for a reduction in permit fees,” said Ald. Rainey. “That’s too harsh.”
“You may be right, but it’s harsh when people have no place to live,” said Ald. Holmes. “I get calls all the time about affordable housing.”
Ald. Fiske said she is concerned about using such incentives.
Ald. Wynne asked that staff provide information about what Highland Park is doing.
Ald. Holmes said, “I think it is important to have [Sixth Ward Alderman] Mark Tendam in this discussion. He is on the Housing and Homelessness Commission.” She suggested that the matter be held in committee until the June 8 City Council meeting.
Who Needs Affordable Housing?Although some people tend to associate the term “affordable housing” with poverty, the concept includes low- and moderate-income households: people working in schools, hospitals and restaurants; young people starting their careers and seniors on fixed incomes, as examples.
In an interview with the RoundTable for a Feb. 26 article on affordable housing, Robert Anthony, executive director of Community Partners for Affordable Housing (CPAH), said, “People don’t understand often that we’re talking about people who are living and working in the community. … What we’re doing by creating affordable housing is serving people who are working in the schools, the hospitals, retail establishments. That’s the reality of affordable housing.”
That same RoundTable article quoted the City’s Economic Development Director Mark Muenzer: “I wish there was this larger notion that ‘affordability’ does not equal ‘poverty.’”
Living in Evanston is costly. The City reports that the most current data from the U.S. Census Bureau shows that 28% of Evanston renter households and 10.2% of homeowner households are severely housing-cost burdened – meaning that they spend more than 50% of their gross income on housing. Households that spend more than 30% of their income on housing are considered cost-burdened. That is, after paying the rent or mortgage, these households may not have enough to cover such necessities as food, clothing, transportation and medical care.
Vanishing AffordabilityMarket forces and a wildly careening economy over the past decade have taken their toll on the City’s affordable-housing stock. A Feb. 26 article in the RoundTable reported that, according to data from the Illinois Housing Development Authority, Evanston had a total of 7,730 housing units that were affordable in 2000, compared to 4,434 in 2011 – a loss of 43% of the affordable housing units.
The City says it expects the decline to continue, as the demand for housing here will increase the cost of housing. Its draft Consolidated Plan for 2015-19 states, “Housing affordability is expected to diminish in Evanston based on consistent increases in both property values and rents and no foreseeable decline in the immediate future or longer term. Evanston’s low- and moderate-income population will continue to be priced out of their community as home prices and rental rates rise.”