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Evanston aldermen voted 6-3 Monday to impose more penalty provisions on new multi-family construction in the city in an effort to force development of subsidized units.

They adopted amendments to what they’ve labeled an “inclusionary housing ordinance” that expand the scope of the scheme to cover rental as well as condominium units, reduce the project size threshold for requiring compliance and increase the penalty fees developers will be required to pay.

In return, the ordinance permits some height and density increases in an effort to reduce the adverse financial impact on developers.

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While complying the demands from housing activists that they approve the new regulations, several aldermen who voted for it expressed concerns that it might kill off new development in the city and said they wanted to carefully track its impact.

But they rejected an amendment, offered by Alderman Brian Miller, 9th Ward, that would have added a sunset provision that would have let the ordinance expire in four years if the council didn’t vote to renew it.

Alderman Melissa Wynne, 3rd Ward, said that wouldn’t provide the predictability that she said developers were looking for in dealing with the city.

Alderman Ann Rainey.

A proposal from Alderman Ann Rainey, 8th Ward, to delay the effective date of the ordinance from Jan. 1 to June 1 to give staff more time to implement it failed for lack of a second.

Community Development Director Mark Muenzer said he believes that most developers in the area now are familiar with such requirements, after adoption of similar rules by the City of Chicago.

He said that developers proposing about 1,000 housing units are already in preliminary conversations with staff about projects that probably will not be submitted before the Jan 1 effective date of the ordinance.

Muenzer said one other project, at 831 Emerson St., is already under review and would not be covered by the ordinance and that another, at 1815 Ridge Ave., would probably be submitted before the deadline. Those projects — the first targeted to students and the second an assisted living development for seniors — total roughly 460 units, Muenzer said.

Although the ordinance calls for building subsidized units at the site of new construction projects, Muenzer said that from his conversations with developers he believes most would choose to pay the penalty fees of $75,000 to $100,000 for every 10 units in a development to avoid having to do that.

Muenzer has estimated that about 2,500 new housing units will be created in Evanston over the next five years and that the ordinance will lead to the inclusion of 250 subsidized units in that count.

However it’s unclear how the city would build a new housing unit for $75,000 or $100,000.

The city’s existing subsidized housing ordinance — which applies only to condominiums — has not resulted in production of any new subsidized units, since it was adopted in 2006 — just before the condo market collapsed.

Alderman Don Wilson.

Alderman Don Wilson, 4th Ward, said the new ordinance isn’t fair — that it imposes penalties on most new multi-family construction in an effort to deal with the housing affordability problem while completely exempting single-family homeowners and tenants in existing buildings from having to contribute to the cause.

“Ask what you contribute to it,” he told members of the audience. “If it’s nothing — think about what you can do.”

Related stories

Subsidized housing scheme put on hold (11/10/15)

Aldermen vote for inclusionary housing scheme (10/27/15)

Subsidized housing plan resurfaces (10/26/15)

Ideas floated for broad housing tax (6/30/15)

Bill Smith is the editor and publisher of Evanston Now.

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10 Comments

  1. Penalize new construction

    An important vote to begin to reclaim all the units of affordable housing Evanston has lost over the last 10 years.  There are additional measures that can be made to contribute to the Affordable Housing Trust Fund.  This is just a start to ensure that all those who work in Evanston can afford to live here as well.  Kudos to the Council.

    1. Sue,
      Sue,

      How many affordable housing unit were lost in the last 10 years? I do not remember seeing any numbers on this. It would be enlighting to know were to find this informantion.

      Thanks

    2. Not familiar with the process

      I am not familiar with how the affordable rentals and condo process works?

      1.  Who pays to make up the difference between market value and affordable unit?

      2.  In condo units, is the low income tenant responsbile to pay the taxes, HOA fees and any assessment fees?

      1. Hi Gary,

        Hi Gary,

        To answer your questions:

        1. Assuming you're talking about an on-site unit in a rental development — the developer has to eat the difference — which is why most developers are expected, by the city's community development director, to make the fee-in-lieu penalty payment instead, so they don't have to deal with the long-term financial implications of owning a subsidized unit.

        2. In condo units, as required by the state condominium law, and as pointed out by Alderman Rainey, the low-income tenant will have to pay the full proportionate share of homeowner association fees and assessments, based on the unit's size. That means the sale price of the unit will have to be very deeply reduced to make the mortgage payment — when added to the other costs — fit within the affordability guidelines. (Whether such units may qualify for a property tax reduction because of their reduced market value is something I don't have an answer for at the moment.)

        — Bill

  2. Inclusionary housong ordinance

    Your characterization of the council's passage of the inclisionary housing ordinance as a vote to "penalize" developers is unfair and simplistic, and does a disservice to the many disparate interests–city officials, housng advocates, developers–who devised a workable solution to a longstanding challenge facing this community.  This is not a "penalty" to developers. Rather, it is a good-faith effort to provide safe, affordable housing for people who are at risk of being priced out of Evanston.

    1. “Good Faith Effort”
      It’s a “good faith effort” in the same way a bank robber makes a good faith effort taking money from a bank.

    2. It’s a Penalty

       If developer is required by ordinance to play a fine or offer low cost housing in order to get approval for a project. IT'S A PENALTY.

      When I was looking for a place to live either buying or renting and couldn't afford the place I'd look in different location not expect  a hand out

    3. Do-Gooder

      "Your characterization of the council's passage of the inclisionary housing ordinance as a vote to "penalize" developers is unfair and simplistic, and does a disservice to the many disparate interests"

      What is simplistic and unfair, is the idea that a middle class person struggling to get along in Evanston paying his or her taxes and mortgage must subsidize others.  Simply put, "what about me"?

      While all the do-gooders whom think they are doing a great service for the "some" are doing a huge diservice to the "many" that work hard and pay thier fair share just to get by.

        1. Affordable Housing for Who? Yep…JUST MOVE is correct!
          I had always wanted to live in Evanston…..when I went looking for places to live, everything I saw there was approximately 40-60% higher than identical living places in Skokie…not to mention that Skokie has much lower crime, lower city fees and services……LOWER taxes, free parking, and the list goes on and on. None of my friends, family, or working associates live in Evanston either, and wouldn’t even consider it. Other surrounding cities are also affordable, and “friendlier”, safer places to live in, for sure.

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