We support the proposed amendments to the City’s Inclusionary Housing Ordinance (IHO), which are designed to increase the amount of affordable housing in the City. We think the approach is reasonable and addresses a critical need to preserve housing that is affordable to low- and moderate-income households in Evanston.
The amount of affordable housing in Evanston has steadily declined in the last decade. The number of housing units in the City that were affordable to purchasers with a moderate-income or to renters with a lower-income dropped from 7,730 in 2000 to 4,434 in 2011, according to data provided by the Illinois Housing Development Authority (IHDA). That represents a loss of 3,296 affordable housing units.
In addition, many people are stretching financially to live here. Under HUD guidelines, a household paying between 30% and 49% of its income on housing is “cost burdened.” A household paying more than 50% of its income on housing is viewed as “severely cost burdened.” The most recent data available shows that 18.5% of all households in Evanston are “cost burdened,” and an additional 19.6% are “severely cost burdened.”
The forecast is dim. The City’s draft Consolidated Plan for 2015-19 says in stark terms, “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.”
This includes many people working in the schools, the hospitals, and retail establishments, people serving our community as policemen, firefighters, and City workers, and many people starting out their careers at entry-level salaries.
The Inclusionary Housing Ordinance
City officials and housing advocates have recognized the need to address affordable housing for many years and have prepared many reports proposing how to address the need and taken many creative, at times herculean, steps in an attempt to address the issue. Unfortunately, the efforts have generated only several hundred affordable housing units in the last ten years – a drop in the bucket when compared with the net loss of 3,296 affordable units between 2000 and 2011.
One way in which the City attempted to create affordable housing was through the IHO adopted in 2007. The current ordinance requires developers of new condominium or townhouse developments containing 25 or more units to make 10% of the units affordable to moderate- or middle-income households. In lieu of these set asides, a developer may pay a $40,000 fee per unit into an affordable housing fund.
According to City staff, that ordinance has not resulted in the development of any affordable housing units or the contribution of any fees into the housing fund; and staff has proposed amendments to the IHO that would expand its reach and hopefully create some affordable units. The amendments have been revised based on input from community members, developers, and members of City Council.
As revised, the proposed amendments to the IHO would expand its reach in several ways:
First, the IHO would apply to developments of 10 or more units (rather than 25).
Second, the IHO would apply to additional types of projects: new apartment buildings and condominium conversions (rather than just to new condominium and townhouse developments).
Third, for projects funded with private funds, the percentage of units that must be affordable would remain at 10%; for projects funded with public funds the percentage would increase to 20%.
Fourth, for owner-occupied units, the affordable units must be affordable to households generally regarded as moderate- or middle-income. The rental units must be affordable to households with moderate- and lower-income levels. These requirements vary depending on whether a development is near public transportation, or is a “Transit Oriented Development” (TOD).
Fifth, the proposed amendments increase the amount of the fee-in-lieu of developing affordable housing units, which is currently $40,000, to $100,000 per unit for a TOD, and $75,000 for other projects.
There are some nods to developers. The affordable units may be smaller and have fewer amenities than the market-rate units. If approved by City Council, a developer may build any required affordable housing units off site, at a different location in the City.
In addition, a developer who provides affordable units on site would be allowed to increase the height of a building by 10% (or 20% for a TOD), the floor area ratio by 10% (or 20% for a TOD), and the density by 10% (or 20% for a TOD), on top of existing maximum site development allowances. In addition, the number of parking spaces normally required would be reduced. Developers would also receive a waiver of building permit fees for affordable units.
We think the approach is reasonable, and it attempts to address a critical need in the City. We urge City Council to pass it.
We appreciate that some people in the community and on Council are concerned that the amendments impose a burden on developers, but that burden is substantially reduced by the benefits provided to developers in the proposed amendments. And developers who choose to go forward with a development and people who choose to buy or rent units in the developments would do so voluntarily.
We do agree that the community as a whole should contribute to preserving affordable housing in the City, perhaps through an increased real estate transfer tax. We think, though, that that should not be in lieu of the proposed amendments to the IHO, but in addition to passing the amendments.