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Lightfoot takes first step to chip away at 120,000-unit shortage of affordable housing

The mayor has created a 20-member task force that will recommend ways to strengthen Chicago’s Affordable Requirements Ordinance.

Housing Commissioner Marisa Novara said the mayor’s plan to create “more affordable housing options citywide” must begin by “evaluating existing tools and resources” like the Affordable Requirements Ordinance.
Housing Commissioner Marisa Novara said the mayor’s plan to create “more affordable housing options citywide” must begin by “evaluating existing tools and resources” like the Affordable Requirements Ordinance.
Rich Hein/Chicago Sun-Times

Mayor Lori Lightfoot on Monday took the first step down the long road that must be traveled to chip away at a 120,000-unit shortage of affordable units now driving Chicago’s precipitous population decline.

Lightfoot started confronting the monumental challenge the same way Chicago politicians almost always confront intransigent problems — by creating a task force.

This one will include up to 20 members charged with revising an “Affordable Requirements Ordinance” that applies to developers receiving city subsidies, city land or a zoning change. They are required to make 10-to-20 percent of the units they build or renovate affordable or pay hefty fees “in lieu of” building on-site units.

Starting in November, the task force will meet once-a-month for the next four-to-six months with an eye toward recommending specific ways to strengthen the ordinance by mid-2020.

It will be co-chaired by three people characterized by City Hall as a “trio of experts on housing, community investment and development”: Stacie Young of Community Investments Corp.; the Metropolitan Planning Council’s Juan Sebastian Arias and Tony Smith of PNC Bank.

Ald. Harry Osterman (48th), chairman of the City Council’s Housing Committee, and Aldermen Walter Burnett (27th) and Byron Sigcho-Lopez (25th) will serve as aldermanic co-chairs and preside over “subject matter hearings.”

The Department of Housing will conduct “neighborhood focus groups” to facilitate the process and maximize public “engagement.” The department will also “publish criteria by which ideas were chosen” and explain why other ideas were not included in the final product, officials said.

Department of Housing staffers and task force co-chairs will round out the task force with racial, gender and geographic diversity in mind.

In a news release announcing the task force, Lightfoot noted that the massive shortage of affordable housing is a “complex challenge” that will require “developing creative and sustainable solutions.”

Housing Commissioner Marisa Novara said the goal is to create “more affordable housing options citywide.”

That begins with “evaluating existing tools and resources” like the Affordable Requirements Ordinance, which has created just 800 affordable units between 2005 and 2018, but generated nearly $94 million for a fund used to preserve or create thousands of additional units, the commissioner said.

Lightfoot’s transition team proposed strengthening the Affordable Requirements Ordinance by mandating construction of family units and eliminating “loopholes” that allow developers to buy their way out of a requirement to build on-site units in gentrifying neighborhoods.

“We will be very intentional about how we bridge this crisis of so many units that are necessary when so few are available,” Lightfoot said on the day she accepted the transition report.

Calling her Logan Square neighborhood “ground zero for the good and the bad of neighborhoods transforming themselves,” Lightfoot said, “I can assure you we will . . . make sure that we are pushing developers to build more units on-site. And we will make sure that we don’t incentivize developers, as we are now, to pay in lieu of fees rather than to build.”

Lightfoot campaigned on a promise to impose a graduated real estate transfer tax to “create a dedicated revenue stream” to reduce homelessness by 45 percent and begin to chip away at the affordable housing shortage.

But the $838 million shortfall she claims to have inherited has apparently altered the new mayor’s game plan.

She now wants to raise the transfer tax on homes sold for over $500,000, instead of $1 million, but use some of the windfall to reduce the shortfall.

That has Novara going back to the drawing board to find other ways to solve the gentrification/affordable housing crisis that was a driving force behind the election of six aldermen backed by the Democratic Socialists of America.

“I share the concerns of the folks pushing for this….This is an issue that I come to with a lot of history on and a lot of passion for. And it’s painful to me to be in the realities of our fiscal situation,” Novara told the Chicago Sun-Times in mid-August.

“We’re really clear on our commitment to addressing homelessness. To providing more resources for affordable housing. But it’s really early for us to figure out exactly how. We’re still getting our arms around the fiscal challenge we’re in.”