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Oops, it’s unconstitutional!

Evanston aldermen scrambled Monday to revise an affordable housing ordinance after the city’s legal staff told them the version the council passed three weeks ago would not survive a court challenge.

In a rush to do something before voters cast ballots on a real estate transfer tax hike, the aldermen last month had voted to drop a provision purporting to require developers of large new condo projects to include some affordable units on site.

The revision capped the cost of the program to developers at about $4,000 per unit, three to four times the so-called voluntary contributions the council has squeezed from developers in recent years.

Now that voters have rejected the transfer tax increase, the aldermen were told by city attorney Herb Hill that the Illinois Supreme Court bars flat fee arrangements like that — labeling them an exaction — the city extorting money from a developer to approve plans, without regard to the actual impact of the development on the city.

Mr. Hill said a federal constitutional provision separately requires that any program to force developers to contribute to affordable housing programs must include waiver provisions, so the city can demonstrate that its demands don’t make development of the property completely financially infeasible. Otherwise there’d be an unconstitutional taking of the developer’s rights to use the property.

The aldermen began Monday’s debate with a proposal from Alderman Anjana Hansen, 9th Ward, to give developers the option of including some affordable units on site, which Mr. Hill said would have met the constitutional tests.

But that was quickly amended by Alderman Edmund Moran, 6th Ward, to require that half the units be on site, subject to the waiver negotiations.

Alderman Lionel Jean-Baptiste, 2nd Ward, suggested cutting the required on-site proportion to 30 percent, and that version ultimately was approved by the Planning and Development Committee on a 5-4 vote.

Opponents of requiring on-site units said many more residents could be helped by providing assistance with down payments and closing costs to first-time buyers of existing properties in town.

The aldermen gave wildly differing estimates of the cost of the on-site requirement — ranging from two to five times as much as the flat-fee payment.

Some opponents on the on-site requirement also voiced fears that the ongoing cost of property taxes and maintenance fees on new condo units would force out the subsidized buyers.

The aldermen left it to the legal staff to draft a new version of the ordinance for further consideration at their next meeting in two weeks.

After the meeting Alderman Ann Rainey, 8th Ward, said that with the cost of the on-site measure to developers, “anybody who doesn’t come in for a waiver is nuts.”

And Community Development Director James Wolinski said the council would probably have to set up a special panel, including some developers, to evaluate waiver requests.

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