Planned updates to Evanston’s Inclusionary Housing Ordinance would require new rental developments to include affordable units or pay penalty fees.
Sarah Flax, grants administrator in the city’s Community Development Department, says City Manager Wally Bobkiewicz recently asked staff to consider possible revisions to the 2007 ordinance.
It now requires that 10 percent of units in new condo developments with 25 or more units be aside for affordable housing or that developers pay a $40,000 fee for each affordable unit not included in the project.
Flax said the city is looking at expanding the ordinance to include rental housing as a way to “strengthen and update our housing ordinance.”
At a meeting of the Housing and Homelessness Commission in May, city staff recommend amending the ordinance to require that:
- Ten percent of units in new rental projects and condo conversions be set aside for affordable housing.
- The project size threshold for the set-aside rule be cut from 25 to five units.
- The set-aside requirement be doubled if the project receives financial assistance from the city.
- The “fee-in-lieu” payment be increased from $40,000 to $100,000 per unit.
Eligibility for affordable rental units would be capped at 60 percent of area median income. The proposal also recommends using a land trust model to hold ownership of for-sale units and requiring both rental and for-sale units “to remain affordable in perpetuity or as long as legally possible.”
Although the current ordinance has been on the books for over seven years, it has not produced any affordable units or fees in lieu for the city’s affordable housing fund — at least in part because of the housing market crash that has largely stalled new condo development across the country.
The commission approved the staff recommendation and suggested that half the affordable units be set aside for people earning under 30 percent of area median income.
Flax said staff would consider the commission’s recommendations and that the proposed ordinance will be presented at the Planning and Development Committee meeting July 28.
“It’s a long time in coming,” said Paul Selden, executive director of Connections for the Homeless, an agency that provides housing, employment and supportive services to homeless individuals and families. “It’s better late than never. I’m glad to see it’s one of those things they finally caught up with.”
Selden said in the 1960s, 70s, 80s and through the 90s, Evanston had “more than its fair share of affordable housing,” and more than any other community in the area.
“But the times have caught up and a lot of that housing has gone away,” Selden said.
Like the ordinance currently on the books, it’s possible that the proposed amendments may do little to increase the affordable housing stock if interest in building new rental developments in the city were to come to a crashing halt.
Selden said he expects the rental market to tank at some point in the near future. But he added that doesn’t mean the city shouldn’t amend the ordinance.
“I’ve been in the affordable housing business a long time and you have to take the long view of this, and if you miss the cycle at least something will be in place in time for the next cycle,” he said.
Selden said the fee in lieu payment should ideally be increased to reflect the actual cost of building a unit of housing.
But, he said, $100,000 rather than $40,000 is still a “more realistic buyout provision.”
“This is a really hard decision and our community is not alone in facing it,” Selden said. “There is not a community in the U.S. that doesn’t have a problem with affordable housing, at least an urban community, and some are much worse than what we’re dealing with.”