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Aldermen squeeze developer for housing subsidies

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Evanston's City Council has failed for eight years to extend the city's affordable housing ordinance to cover new rental construction, but subsidized rentals suddenly became front of mind for aldermen Monday night.

Faced with a planned development request for 101 rental units at 1571 Maple Ave. that's been wending its way through the city's approval process for at least seven months, aldermen decided that a $120,000 ostensibly-voluntary contribution to the city's affordable housing fund agreed to by the developer and city staff wouldn't be enough.

As recently as last summer city staff had proposed plans to amend the affordable housing ordinance, adopted in 2007 on the eave of the condo market collapse, to include rentals, but the council took no action.

Monday night Alderman Delores Holmes, 5th Ward, said she'd like to see two affordable units on the 1571 Maple site rather than the contribution to build housing someplace else.

Alderman Jane Grover, 7th Ward, raised her, saying there should be as many as five on-site affordable units.

Alderman Mark Tendam, 6th Ward, said affordable housing should be in the building. "Affordable housing in areas that are marginalized doesn't work," Tendam said.

Alderman Ann Rainey, 8th Ward, said she wanted five affordable units in the building set aside for people making no more than 30 percent of median income — but to only impose the affordability requirement for seven to 10 years.

Alderman Peter Braithwaite, 2nd Ward, upped the ante further, saying 10 percent of the 101 units should be affordable.

Developer John McLinden, after complaining that he "would have appreciated having the economic issues on the table sooner, rather than at the 11th hour," said he has been doing affordable housing in a number of communities, including Chicago.

He said meeting affordability standards for someone who earns 60 percent of area median income means leasing an apartment for about $1 per square foot — which roughly covers operating expenses and taxes.

So, at 60 percent, McLinden said, a developer is getting zero revenue to cover the cost of constructing a unit that cost perhaps $250,000 to build.

Therefore, he said, demanding five affordable units would be equivalent to requiring an affordable housing contribution of $1.25 million.

"It's the difference between being able to do the deal and not do it," McLinden added.

"In Chicago, when you do affordable housing, at least until recent changes, everybody plays by the same rules. Everbody's cost structure is the same," he said.

"But here in Evanston several new buildings we'll be competing with aren't faced with those costs. Don't force something on me that my competitors don't have to do, and force me to lease against them," he added.

Braithwaite said the developers of E2, the twin tower rental development now leasing at 1881 Oak Ave. and 1890 Maple Ave., paid $250,000 to the city's affordable housing fund.

But developer Michael McLean responded that E2 has over 350 units — making it 3.5 times the size of the 1571 Maple project.

Rainey suggested spreading out payments to the affordable housing fund over time. "How about $100,000 a year for 10 years to subsidize units in areas that are pretty homegeneous," Rainey proposed.

McLinden said spreading the payments out over time would be helpful and suggested, "We could do $500,000 however you wanted. We can't do $1 million."

The aldermen voted to have staff negotiate revisions to the plans with the developer and return the proposal to the council for a possible final vote in three weeks, on Monday, April 13.

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