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City Council members on Oct. 8 heard proposed changes to the City’s Inclusionary Housing Ordinance, which were crafted by the Inclusionary Housing Subcommittee.

In October 2017, Mayor Stephen Hagerty appointed seven members to the subcommittee: Evanston residents Rob Anthony, Lynn Robinson, Jolene Saul, Kent Swanson, and Aldermen Judy Fiske, Don Wilson, Eleanor Revelle and Ann Rainey.

The subcommittee met four times to craft revisions to the ordinance that would generate more on-site affordable units in new projects. The subcommittee recommended some reduced and some increased incentives – simplifying requirements for on-site units, for example, and increasing the fee-in-lieu for contributions to the City’s affordable housing fund.

Housing and Grants Administrator Sarah Flax and Zoning Planner Melissa Klotz presented the recommendations and left some issues for City Council members to consider.

Onsite Units
Developers seeking zoning variance from the City who did not wish to construct on-site affordable units have been able to make fees-in-lieu in the form of contributions to the City’s Affordable Housing Fund. The change would mandate at least some – 5% of the total – affordable units available in each development and would increase the fee-in-lieu to $150,000 per unit for those in the downtown and Research Park districts and $150,000 per unit in all other zoning districts.

Under the current ordinance, affordable dwelling units – also called Inclusionary dwelling units, or IDUs – may vary in size, appearance and materials from market-price units.

Ms. Flax also said the subcommittee would like to see the affordable units be the same size and have the same appearance as the other units in the development.

The proposed change states that the interior finishes may be different from those on market-rate units but must be “contractor-grade or higher” and the exterior and common areas must be “indiscernible from market-rate units.” The size must be the same as or larger than the minimum size requirements in place when the project was approved.

Recommendations to discourage the payment-in-lieu include increasing the fee per unit and requiring the developer to pay the fee at the time the company receives the building permit – not upon completion of the project.

The proposed new definition of a project covers all projects of five or more units.

In the affordable rental units, tenants for all inclusionary development units (IDUs) in rental projects must earn no more than 60% of the area median income (AMI).

The Subcommittee has requested that City Council choose from two options about the affordability levels for homeownership. One option is that all IDUs must be sold to households early less than 100% of the AMI. Under the section option, half of the IDUs would be sold to households earning at below 80% of the AMI, and half to households earning at or below 100% of the AMI. All rental units would be offered at 60% or less of the AMI.

The changes also provide new definitions for, among others, “affordability period.” Owner-occupied units would remain affordable in perpetuity or “as long as is allowable by law.” The affordability period for rental units would be increased by five years, from 25 to 30 years.

Representatives of Reclaim Evanston spoke about several of the proposed changes.

Residents’ Comments
Sandy Wilson said the fee-in-lieu should be $300,000 per unit. “The Affordable Housing Fund is one way to create affordable housing and payment-in-lieu is one non-tax way to get money for affordable housing.”

Rich Faddis said of Evanston’s very small homes are being torn down. “A lot of former residents live in Skokie. We are losing our diversity and improving theirs.”

Sue Loellbach of Connections and of Joining Forces for Affordable Housing said Joining Forces would like to see the fee-in-lieu be higher and would like to see “staggered” affordability, so not all units would end their affordability at the same time.

Patsy Benveniste said another potential obstacle to affordable housing is that real-estate firms are buying up condominium developments and re-converting them to apartments. This she said, will “progressively jack up rental prices.”