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City Must Spend ‘Millions’ More To Combat Affordable Housing Shortage, Group Tells Aldermen

Since 2008 — before the passage of the Affordable Requirements Ordinance — general fund dollars spent on affordable housing has fallen from $32 million to $14 million.

The city needs more affordable housing, a group told aldermen Wednesday.
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DOWNTOWN – Aldermen must be prepared to take “bold action” and spend “millions” more to subsidize and finance affordable housing in Chicago to combat rising inequality and instability, a nonprofit coalition told aldermen Wednesday.

While the city is on track to meet its affordable goals for 2018, Chicago Rehab Network Director of Public Policy Rachel Johnston told a sparsely attended session of the City Council’s Housing and Real Estate Committee that the city should triple the number of affordable rental units subsidized from 2,500 to 7,500.

“We need to start talking about displacement,” Johnston said, urging the aldermen to boost the city’s contribution to the Chicago Low Income Housing Trust Fund.

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In the first three months of 2018, city funds were used to build 71 new rental units, according to the Chicago Rehab Network, a nonprofit coalition of community groups and nonprofit developers. However, just 44 will be reserved for residents earning between 51 and 80 percent of the area median income, or between $42,300 and $67,700.

Of those new apartments, only 29 were built to comply with the Affordable Requirements Ordinance. The ARO applies to any development of 10 or more units that needs special approval by city officials, is on city-owned land or is subsidized by taxpayer funds. Each project must set aside 10 percent of its units for moderate- or low-income residents.

At least 25 percent of those units must be included in the project in most parts of the city. Developers can opt to pay a fee of up to $225,000 per unit instead of building the remaining affordable units on site.

In all, the city expects to build 180 units in 2018 under the affordable housing ordinance.

The city should earmark more of its general fund — which also pays for police and fire protection, tree trimming and public health programs — for affordable housing, Johnston said. Aldermen have almost complete discretion to spend money in the city’s general fund.

Since 2008 — before the passage of the Affordable Requirements Ordinance — general fund dollars spent on affordable housing has fallen from $32 million to $14 million, a drop of more than 56 percent, according to data compiled by the Chicago Rehab Network.

Ald. Deb Mell (33rd) said she has been “frustrated” to see families who had lived in her ward for many years get pushed out by rent hikes.

Mell said it has been tough to figure out how to keep that from happening, and wished out loud that she had a “magic wand.”

“We can see how it trickles down to everything,” Mell said.

However, Ald. Walter Burnett (27th) rejected suggestions that people are being “forced” to move out of the city.

“People are choosing to move out of the city,” Burnett said.

That may be correct, Ald. Joe Moore (49th) responded, but Chicagoans who are moving may feel like they have no choice because they can no longer afford their rent or property taxes.

With the city’s five-year housing plan set to expire in December, work has already begun on a plan covering 2019-23, said Anthony Simpkins, the managing deputy commissioner of the housing bureau in the Department of Planning and Development.

An advisory committee made up of 150 members, including developers, investors, nonprofit groups and advocates has met three or four times to start crafting the plan, which is set to be approved by the City Council this fall.

While the current housing plan focused on helping Chicago recover from the Great Recession, the next plan will focus on “displacement and gentrification in some neighborhoods” as well as “low property values, depopulation and the legacy of segregation on many other communities,” Simpkins said.

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