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Developers: Affordable plan could raise housing costs

Some housing developers say Evanston’s proposed affordable housing program would raise prices and could kill off new development in the community.

“I think it will put Evanston in a disadvantageous position versus other communities,” Tim Anderson of Focus Development said in response to a city survey.
He said developers would have to build the price of the subsidy into the cost of new market-rate units and that would create “more polarity” in housing prices.
Kenneth Sproul of SMB Development said, that if people decide there’s a need for affordable housing, “then we the people should all share in the burden of providing it through public funds.”
“I believe this is not an issue that the majority of the electorate supports,” Mr. Sproul said, so special interests work to try to force a small segment of society – developers – to pick up the tab.
David Hovey of Optima Development said, “Developers should contribute their fair share to new affordable housing.” But he added that other players in the development process – from banks to realtors — should contribute too, as should the community at large through real estate transfer tax and permit fee increases.
“Historically we have provided a wide range of pricing to a wide range of buyers,” Mr. Hovey said, but reducing the price of subsidized units in future projects would mean increasing the average cost of the rest.
He suggested those price increases could be avoided, if the city gives developers incentives by increasing the density of developments – permitting more units, greater height and other adjustments.
Brad White of LR Development said he thinks new affordable housing is needed, and he said the proposed 10 percent requirement for subsidized units “is a fair number.” But he said the city should participate in the program by offering zoning or fee waiver incentives.
Special meeting
Aldermen have scheduled a special Planning and Development Committee meeting for 7 p.m. Jan. 5 to consider inclusionary housing proposal that have been under consideration by the Housing Commission for several years.
While many North Shore communities are under state mandate to increase affordable housing because less than 10 percent of their housing units are affordable to people making less than the median income, 26 percent of Evanston’s housing units were affordable as of the 2000 census.
But Carol Balcolm of the Citizens’ Lighthouse Community Land Trust says a new study from Business and Professional People for the Public Interest shows that only 17 percent of the housing stock here is affordable now.
Rising prices at low end
Real estate transfer tax data analyzed by the Community Development Department suggest that housing prices in Evanston are rising fastest at the low end of the market.
The price of the cheapest one quarter of all single family and town homes sold rose 18 percent from 2003 to 2004, while the price of the most expensive quarter was up just 1 percent.
For condominiums, the price of the cheapest quarter rose 13 percent, while the most expensive quarter went up 5 percent.
Targeting planned developments
The affordable housing proposal would affect all planned developments that include 25 or more housing units.
City staff have proposed that if developers don’t include at least 10 percent affordable housing within their projects, they contribute $40,000 for every 10 units in their project to an affordable housing fund.
At the Planning and Development Committee’s last meeting, some housing activists and aldermen suggested raising that contribution to as much as $100,000.
A number of aldermen also suggested trying to target the program to benefit public employees.

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