City plan promotes low-cost housing
Zoning proposal targets developers

Chicago Tribune, July 8, 2002
By Gary Washburn
Tribune staff reporter

Development of affordable housing would be encouraged under a proposed overhaul of the city's zoning ordinance, but advocates for low- and moderate-income Chicagoans say the proposed incentives fall woefully short of what is needed.

Debate over the zoning proposal comes when virtually everyone agrees the city is facing a vexing problem--an inadequate supply of affordable homes and apartments for the working poor and even some middle-class people whose pay has lagged behind zooming housing costs.

"If you look around the city at the number of units converted to condos, the number torn down through the city's aggressive policy of [demolishing] dilapidated housing and the amount of new development that is not affordable, the need is in the tens of thousands of units," said Brian White, community relations director of the Leadership Council for Metropolitan Open Communities.

A report issued last month by a blue-ribbon commission appointed by Mayor Richard Daley to help rewrite the city's antiquated zoning code acknowledged the problem.

"The proportion of rental units in the Chicago region is shrinking, and only 56 percent of new homes sold in 2001 were affordable by families earning the median income," it said.

To help spur production, the zoning panel recommended adopting "density bonuses" for developers in selected areas of the city. In return for including a certain number of affordable units in their plans, they would be able to build bigger projects than otherwise would be permitted.

"Incentives should be targeted to benefit different groups," the report said. "Bonuses could be higher, for example, for very low-income housing than for low- and moderate-income housing. Bonuses could also be granted specifically for senior housing ..., a form of affordable housing in great demand."

The commission also suggested parking requirements for affordable projects be reduced to cut costs and that the projects automatically be moved to "the front of the line" for zoning approvals.

"Those steps are good steps," said Gene Moreno, advocacy director of the Chicago Rehab Network. "They are creative incentives. But it is not grabbing the bull by the horns."

Moreno and other proponents of "inclusionary zoning" say Chicago can learn from cities that require developers to build a certain percentage of their units for people with limited incomes.

Under a mayoral executive order in Boston that went into effect in 2000, for example, the standard is 10 percent in developments with more than 10 homes or apartments. Developers in Santa Fe, meanwhile, must set aside 11 percent of what they build, and in Cambridge, Mass., it's 15 percent.

Since 1999 Boulder, Colo., has required a 20 percent share of affordable units in all for-sale developments.

Montgomery County, in Maryland, "is sort of the granddaddy of them all," said Jo Patton, policy analyst with Business and Professional People for the Public Interest. Since 1974, up to 15 percent of units built in developments containing 50 or more units have had to meet affordability standards based on buyer income.

"If it's not required ... you don't get the kind of [builder] participation you need to get much impact," Patton said. "I think it needs to be mandatory."

But critics believe inclusionary zoning, by itself, can be counterproductive.

If such a requirement came with "certain tax breaks and certain economic incentives ... it probably could work socially and economically," said mortgage banker Albert Hanna, chairman of Mid-North Financial Services.

Otherwise, "you can't make the numbers work," he asserted. "Just a flat-out requirement would cut down on future construction and encourage more condominium development" at the cost of rental apartment construction.

Ald. William J.P. Banks (36th), one of the architects of the code proposal, opposes inclusionary requirements, contending that zoning alone cannot solve the affordability problem.

Banks said more money is needed for city Housing Department programs that provide financial assistance to developers of moderately priced housing and to their customers.

Copyright © 2002, Chicago Tribune

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