As Chicago prepares to enter a new era of ramped-up affordable-housing development, a key question is whether private developers will go along with the city’s new guidances. A lawsuit filed... last Thursday shows signs of possible peril for the city’s low-income housing agenda.
At the heart of the lawsuit is the Affordable Requirements Ordinance (ARO), which is part of Chicago’s five-year “Bouncing Back” plan for increasing affordable housing. [...]
— City Lab
12 Comments
As stated in the last paragraph, this is a “Take”. The Fifth Amendment requires governments to compensate for property they take from the private sector, but it goes beyond real property (real estate) into all kinds of tangible and intangible property, including but not limited to easements, personal property, contract rights, and trade secrets.
Zoning pertains to land use only and the attachment of conditions requiring a developer to supply public improvements in return for a zoning permit without compensation is illegal and is a “Take”.
It costs a developer the same to build a market rate unit as it does a subsidized unit, yet he makes less on the latter, no problem so long as the government coughs up the difference; otherwise it’s an unlawful Take.
Here in Paradise developers are blocking restrictions intended to limit the size of development including the merging of smaller parcels into larger lots that allow even more gargantuan houses as building size is related to lot size. Successfully too, as there is little that a briefcase full of cash and a few well paid shysters can't overcome.
^Zoning is land use and boards are way out of bounds on most add-on restrictions/conditions. Have read cases that make it to The Supreme Court that always yield to the land owner, it’s just that a bag of cash is cheaper-faster….around here they prefer timeshares.
Does Chicago lack affordable housing? The population in 1950 was 3.6 million. Now it's 2.4 mill. What happened to those 1.2 million extra bedrooms? Will 1200 units over 5 years (mayors optimistic projection) make an appreciable difference?
My experience living there was that there was plenty affordable housing. Most of it in pleasant looking traditional SFH neighborhoods where everyone was poor and no one wanted to live. Since few people really want to live somewhere where everyone is poor.
This ordinance does nothing to address that. It promises to provide a smallish number of units which may or may not be located in the trendy neighborhoods developers operate in (most likely not, since the averted housing fees are almost always a better value to developers). And because it only applies to rezones, it creates a perverse incentive to avoid redevloping abandoned industrial or commercial space into homes - land owners might prefer just to operate a warehouse or low-value storage lot.
Chicago has a pretty good supply of housing, much of it affordable to anyone reasonably employed. The problem for many people is being reasonably employed. The city lacks good low skill jobs and good affordable education for people from tough backgrounds. More houses wont fix that.
We don't give much thought to the assumption that private developers are fully responsible for social welfare in regards to housing. Should this programme extend to other important living expenses? Should Ford or Tesla be required to sell 20% of their cars at below-market prices? And whole foods sell 20% of its food at aldis prices? BP sell 20% of its gas at 50% discount?
Affordable housing is important, but its only a part of a successful social program, and needs to be implemented in a sensible way suited to the scale of whats needed. These sorts of policies seem simply like lazy "solutions" that accomplish little but potentially reduce the supply of housing overall.
There are a few things that were mentioned that are not correct
Carrera, First this is not the City of Chicago taking anything from anyone, the developers are asking for a change in zoning and in exchange for the zoning change that the city gives, the developers are asked to provide some affordable housing. The city does not have any obligation to change zoning for any developer. They bought Industrial property in the West loop and the city has no obligation to give away zoning changes without leveraging the zoning change for some small amount of affordable housing in the neighborhoods that are gentrifying. If you don't want to have affordable housing in your development then don't try to rezone property, build your residential development in land already zoned for residential use.
Also the shortage of housing is possible in a city with a net loss of population over 60 years. Over crowding in compact slums has been greatly reduced. Many wealthy neighborhoods in Chicago have seen a net loss in population as homes get bigger , for example when a three flat is converted into a single home.
Also in the 50's and 60's a major population reducing effort was made when the interstates cane through and flattened hundreds of thousands of homes. And when the U of I Chicago Circle campus came about leveling the Italian neighborhood in 1961
Midlander, the rezoning of industrial zones along the south and north branches of the river is feeding a demand for near loop luxury housing that for the city to not leverage for some concessions would be negligent on behalf of the city. And the biggest subsidy this proposal has to offer apart from a home in a neighborhood where most residents can advocate for city services such as crime prevention and quality public schools and parks is the proximity to jobs and transit.
Concentrated poverty is probably the most difficult obstacle to overcome, even if we had a European safety net we would still be trying to swim up stream when resolving social ills.
Over and OUT
Peter N
Peter, well "leveraging" is an interesting word, what right does a zoning board have to "leverage" anything? It's either yes or no to a change in use. They have been allowed to "leverage" by the developers because it's cheaper to give in, but in every challenge it has been found to be out of bounds.
Not arguing the need, just the process. Was chairman of our zoning board for 25 years, studied a little along the way, negotiating for things that make the change palatable to adjoining uses is one thing, but getting a developer to carry your water is something else altogether.
We'll need to wait for the outcome, but I agree with the plaintiffs - it's a Take.
U$A, where property right beat human rights every time.
Had a doctor for a client who wanted to rezone a residential parcel for an office. I met with the zoning people in a preconference and after the presentation they said it would be okay but we needed to put in a storm retention pond. I asked why, they said they had a storm water problem in the city and this would help it. I then said "if we build an apartment building with the same footprint & parking we don't need to do anything, but if we build a doctors office a pond is required?" They said "that's right". I told them we weren't interested in building public infrastructure and walked out and the doctor moved to the suburbs.
It wasn't the money it was the audacity.
The need for affordable housing and economic inequality are terrible problems, it's just that this isn't the way to solve it.
^Totally with Carrera on this. It's an important issue, but this sort of approach is just a political show, the mayor saying 'oh, this is the developers' problem' and walking away from it.
It has no potential to mitigate the problems associated with housing affordability. Housing affordability depends on 2 factors: rent/price and income. In Chicago's case it's mostly the 2nd factor causing problems.
Look at these two maps and see if you reach the same conclusion I do:
To a large extent, only people living in expensive neighborhoods can afford the rent!
To me, this implies that the problem isn't that housing in Chicago is generally expensive. It's that many people are so poor they can't afford housing at the break-even cost of construction + finance + maintenance + taxes. Is it solely the responsibility of developers to remedy this?
People living in these areas aren't living in homes recently built by developers who took a big profit - this is old housing that's been around long enough to pass through major demographic shifts. Generally, it was built for middle class workers who left. Likely not because of any infrastructure or service deficit: the jobs they enjoyed simply no longer exist.
1200 extra affordable homes will have no impact at all on this situation. But it might influence some smaller developers doing work in the 10-50 unit range to leave the city for the suburbs, where they need not deal with any of this. I don't think that's good for the city.
I don't dispute the inadequacies of the solution of "leveraging zoning changes to get a small number of affordable housing units in a development, but when the city is asked to change the zoning from industrial to mixed use residential or office use that places tremendous pressure on the few remaining industrial businesses in the city that can not afford the increased rent or property taxes because their property can be converted to another use and is suddenly much more valuable than it was before. This policy is squeezing out the remaining industry in Chicago and the steady decent jobs that people have had for generations.
But getting some concessions for making changes in zoning is fare and is the right of the city planners to do if it serves the best interest of the city. The Zoning board makes a change that tremendously increases the value of the land you have and all that is asked is a few units in the development to be designated affordable. The ones with the bedrooms over the dumpsters or that have a view of the concrete wall next door get this designation. also the rents in affordable housing go up as the neighborhood median income level rises as an area gentrifies. I don't see this as anything more than greedy developers trying to squeeze a little more cash out of their projects and the city saying hold it come on lets give a token few "affordable units" to the community you are erasing.
As for this libertarian notion that I own this land and can do what ever I want on it, that is not holding up in courts, the right for a city to take land even to transfer it to another private developer such as the case in New London CT has been upheld by the supreme court and despite the efforts of lower courts out west to undermine this ruling it still stands. Maybe in places like Huston where there is no zoning this is the way it works but not in most of the nation. Land ownership does not come with uninhibited rights to do whatever you want with your land.
Over and OUT
and Happy Labor Day
Peter N
Peter,
#1 – Zoning is land use, plain & simple, making people rich or poor has nothing to do with a zoning boards function, (currently/legally).
#2 – The eminent domain issues you cite are political and not undertaken by zoning boards.
#3 - Agree completely with your points on gentrification etc. but engineering solutions through zoning won’t work because property rights are so deeply seated in that pesky constitution.
midlander your graphics point to one clear fact - income discrepancy.. i do not say inequality as that means something very different....
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.