Quantcast

Affordable home ordinance on fast track

Several aldermen hope to push through an amendment to rescue Evanston's legally defective affordable housing ordinance next Monday.

The move comes even though a key report used to justify the ordinance is based on faulty math that exaggerates the cost-crunch facing would-be home buyers.

Several aldermen hope to push through an amendment to rescue Evanston's legally defective affordable housing ordinance next Monday.

The move comes even though a key report used to justify the ordinance is based on faulty math that exaggerates the cost-crunch facing would-be home buyers.

"I think we should move forward with the amendment as quickly as possible," Alderman Edmund Moran, 6th Ward, said at last week's Planning and Development Committee meeting.

Alderman Steve Bernstein, 4th Ward said, "We've been round and round on this for years. We're not changing the import of the ordinance — it still would require that 10 percent of the units be affordable."

The aldermen rejected a request from Alderman Ann Rainey, 8th Ward, to hold a public hearing on the proposal. "You think everybody knows we are going to do this," she said, "so do you have a problem with letting the community know?"

Alderman Lionel Jean-Baptiste, 2nd Ward, said he hoped the council would suspend the rules so that the ordinance could be both introduced and adopted at the March 12 meeting.

Figures in a report from the advocacy group Business and Professional People for the Public Interest (BPI) cited in the ordinance claim to show the percentage of owner-occupied homes in Evanston considered affordable dropped by nearly half from 2000 to 2005.

The BPI figures account for rising incomes over the period, but fail to adjust for falling interest rates.

The report claims the value of a home a two-person household earning 80 percent of the Chicago-area median income could afford rose 15.5 percent from 2000 to 2005 to $144,603, while median housing prices in Evanston rose 7.5 percent per year during that period.

But once declining mortgage interest rates are accounted for, the same family could afford a home worth almost $177,000 in 2005– an increase of over 40 percent.

In its calculations, the housing group holds the mortgage interest rate constant at 8.05 percent from 2000 to 2005.

In 2000 the annual average rate on a 30-year fixed-rate mortgage as reported by Freddie Mac, the Federal Home Loan Mortgage Corporation, was 8.05 percent, but by 2005 it had declined to 5.87 percent.

An Illinois Housing Development Authority official today said that when the state next calculates compliance with the state affordable housing law, after the 2010 census, it will use then-current interest rate figures.

Hoy McConnell, BPI’s executive director, said this afternoon that his staff is working to recalculate its figures to adjust for the change in mortgage rates and to update them to include 2006 data.

He said he hoped to have the new figures available in about a week.

Asked about the discrepancy in the numbers last week, Evanston Community Development Director James Wolinski said, "We always figured the BPI numbers were overstated."

Ald. Moran, interviewed by e-mail before BPI announced its plan to rework the numbers, said, "I will stick by BPI."

Alderman Delores Holmes, 5th Ward, said "I am not aware that the math used is faulty. I am asking the staff to check out the information. Regardless of the math, I think we still need the ordinance. Any wrong numbers should be corrected."

Ald. Bernstein said, "I'm basing my desire to pass an inclusionary housing ordinance on my own sense of rising Evanston costs, especially in certain 'affordable' areas of town, where the current residents really can't afford to live now."

Ald. Rainey said, "I don't think anyone cares about the numbers, especially people who know there will never be 'low income' housing in their ward."

Alderman Elizabeth Tisdahl, 7th Ward, said, "I think BPI overstates the problem they want to address. But I support a workable affordable housing ordinance, not one that's going to stop all development."

The city's law department has concluded that because the ordinance as adopted required developers to pay $40,000 for every 10 units or fraction thereof in a development of 25 or more units into the affordable housing fund it amounted to an impact fee which is generally disfavored by Illinois courts.

The law department believes that by changing the ordinance to require that 10 percent of the units in a project be affordably priced, but allowing developers to either build the units on site or make the same $40,000 contribution to the city's affordable housing fund, it can avoid the legal problem.

After the council adopted the ordinance, it amended it to require that at least 30 percent of the affordable units be built on site. That amended ordinance was vetoed by Mayor Lorraine Morton who said it would likely kill new development in Evanston.

Developers had estimated that the vetoed ordinance would have raised the overall cost-per-unit of complying with the law from about $4,000 to nearly $10,000.

Mr. McConnell said BPI still lacks information to account for the impact of condominium conversions on the availability of affordable rental housing in Evanston, but he said he suspects the condo conversions have dramatically cut the number of affordable rental units in town.

Editors’ Picks