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Chicago City Council Toughens Affordable Housing Development Standard

 Affordable Housing Developmen

CHICAGO- The Chicago City Council has approved amendments to the Affordable Requirements Ordinance (ARO) that will increase costs for developers by raising the in-lieu fee structure and requiring a percentage of mandated affordable units be built. The Chicagoland Apartment Association (CAA) worked in coalition with other real estate groups to propose changes intended to minimize the new ARO’s negative impact. 

While only minor concessions were granted, the city did indicate a willingness to continue discussing concerns. Currently, the ARO applies to residential projects with 10 or more units that seek rezoning, buy city land, or receive city financial assistance. Projects seeking rezoning have a 10 percent ARO requirement (inclusionary units or in-lieu fees), while projects that receive city financial assistance must meet a 20 percent requirement. The amendments add a minimum inclusionary requirement that at least 25 percent of the required ARO units must be built, on-site or off-site, rather than paying the in-lieu fee for all the required units. 

The ordinance currently requires a flat in-lieu fee of $100,000 per required unit. The new ARO introduces a tiered schedule of fees depending upon the location of the development. For projects built “downtown,” the fee increases to $140,000 per unit the first year and jumps to $175,000 per unit after that. In “higher income” zones, the fee increases to $125,000 per unit and in “low to moderate” zones the fee is lowered to $50,000 per unit.

The new ARO requirements are effective 180 days after “passage and publication,” which typically occurs on the date of the next City Council meeting, in this case April 15. The new standards are expected to be enforced beginning on or around Oct. 15.

This is an update to a story that originally ran in the Feb. 16 edition of the Apartment Advocate.

Source: Chicagoland Apartment Association