Efforts to Reduce Residential Segregation by Boosting Affordable Housing Supply Starting to Work, City Officials Say

Efforts backed by Mayor Lori Lightfoot to reduce residential segregation in Chicago by boosting the number of homes across the city that Black and Latino residents can actually afford have begun to show signs of progress, officials with the Chicago Department of Housing say.

The centerpiece of that effort is a revamped ordinance that requires developers who get special permission from the city or a subsidy to build more units earmarked for low- and moderate-income Chicagoans and pay higher fees. 

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Housing Commissioner Marisa Novara said the city’s most prominent tool to build affordable housing had to be overhauled to directly grapple with the legacy of systemic racism and segregation in Chicago. That legacy is detailed in WTTW’s effort to document the firsthand costs of segregation in Chicago.

“If we are race neutral, we won’t get race-neutral results,” Novara told WTTW News. “We know this. We had to change that. That’s on us.”

The revised law is creating more units that low-income Chicagoans can actually afford as well as more homes large enough for families than the version of the law that was in effect for six years, officials said.

During the first three months that the law was in effect, nine proposals that triggered those requirements were approved by the Chicago City Council, more than in similar periods in 2019 and 2020.

Twenty-two projects were approved between July and October 2021, before the new rules took effect, as developers scrambled to take advantage of the less stringent rules. A similar pattern emerged in 2015, the last time city officials changed the affordable housing law in an attempt to spur the creation of more affordable housing.

That is an indication that the rules, which took effect in October, will help chip away at Chicago’s affordable housing gap of nearly 120,000 homes, and reduce segregation across Chicago, Novara said.

“I say this as often as I can: All communities have to contribute to meeting the city’s affordable housing needs,” Novara said. “All communities.”

That massive shortfall of affordable housing, coupled with Chicago’s deeply entrenched patterns of residential segregation, puts whole “swaths of the city out of reach of low-income and working-class Chicagoans,” according to the September 2020 report issued by a task force formed by Lightfoot.

After the City Council voted 42-8 in April 2021 to approve the revised law, Lightfoot said she was determined to upend Chicago’s “systematic patterns of segregation.”

“The unfortunate reality is that our city has a dark history of racial segregation,” Lightfoot said. “It is up to us to address its modern-day manifestations.”

The city’s affordable housing ordinance applies to any development of 10 or more units that needs special approval by city officials, is on city-owned land or is subsidized by taxpayer funds. Developers now have to set aside 20% for low- and moderate-income Chicagoans, up from the previous requirement of 10% in most Chicago neighborhoods.

The impact of the new law is particularly clear on a development at 3914 N. Lincoln Ave. in North Center, a neighborhood that is mostly White, and increasingly affluent. Under the previous version of the law, the developer would have had to set aside 20% of the units for Chicagoans earning no more than 60% of the area’s median income, or about $54,600 for a family of four, said Daniel Kay Hertz, the policy director for the Chicago Department of Housing.

Units set aside for those making 60% of the area’s median income are out of reach for most Black or Latino Chicagoans. The median household income of Black Chicagoans is $27,713, while the median household income of Latino Chicagoans is $40,700, according to an analysis of American Community Survey data by the Metropolitan Planning Council.

Instead, the developer of the North Center complex took advantage of a provision that reduced the number of units required to be set aside from 20% to 10% of units — as long as those units were earmarked for those earning no more than 30% of the area’s median income, or about $27,950 for a family of four.

“That is a first,” Hertz said.

The law will also create affordable units at 1245 W. Fulton Market in the red-hot Fulton Market district west of the Loop by using a weighted average to meet the affordability requirements set by the law. That will mean 12 units will be set aside for households earning no more than 40% of the area median income and another 12 units for those earning no more than 50% of area median income.

The previous version of the law would have set aside units for those earning no more than 80% of the area’s median income, or $74,550 for a family of four, entirely out of reach for most Black and Latino Chicagoans.

The city’s efforts to build more affordable housing have also been “supercharged” by a new state law that offers property tax breaks to developers who set aside 15% of all units for low- and moderate-income Chicagoans, with an incentive for those building new complexes in the Loop to set aside 15% of all units as affordable, Hertz said.

Even as the new law starts to show results, Lightfoot endorsed far more sweeping measures during the 2019 mayoral campaign. As a candidate, she endorsed a measure that would have required any proposal including affordable units to “automatically go through a streamlined process for approval” if they are planned in wards where less than 10% of housing stock is affordable.

Lightfoot did not endorse that proposal after her election.

Video: Karen Freeman-Wilson, former Mayor of Gary, Indiana and now the president and CEO of the Chicago Urban League; Ted Richards, originally from Rochester, New York who lives with his family in the Jackson Park Highlands neighborhood; and Tia Brown, who lives with her family in Chicago Lawn on the Southwest Side of the city  join “Chicago Tonight” to discuss how racial segregation in housing has created a toxic legacy in many African American communities. (Produced by Paul Caine)

Focus on new — and old — strategies

While the city’s affordable housing ordinance might be the most well-known tool to build new affordable housing, it is far from the only way Lightfoot administration officials say they are working to address residential inequity in Chicago. 

City officials also ended a 64-year ban on tiny homes in Chicago in 2020 as part of the Department of Housing’s effort to expand affordable housing across the city.

Since the pilot program started in May, more than 200 applications to build 250 basement, attic and coach house dwellings have been approved by Department of Housing officials, exceeding officials’ expectations for the program that is not even a year old, Hertz said.

Most of those new units would be added to single-family homes or small apartment buildings with no more than four units, Hertz said.

In addition, the Lightfoot administration increased protections for Chicagoans who did not violate their leases but are facing evcition. Under a measure approved in June, landlords must give their tenants 90 days of notice before they evict them without cause, an increase from 30 days.

In addition, tenants forced out by demolition or remodeling get $2,500 to help them find a new place to live.

The city’s affordable housing strategy has also focused on neighborhoods where longtime residents are at risk of being pushed out of their homes by surging real estate prices and soaring rents.

In Pilsen and along the 606 Bloomingdale Trail on the Northwest Side, Lightfoot backed a proposal championed by Ald. Carlos Ramirez Rosa (35th Ward) that forces property owners who want to demolish existing buildings to pay a fee of up to $15,000 that would be used to fund affordable housing projects across the city.

Ramirez Rosa said the measure has worked to prevent two- and four-flats from being torn down and replaced with single-family homes — and has protected the neighborhood’s racial and ethnic diversity. Those changes, called deconversions, dropped 100% as compared with before the pandemic, according to data presented in December by the Chicago Department of Housing.

One of the first flashpoints over affordable housing during the Lightfoot administration flared in Woodlawn, where activists worked for years to enshrine protections for longtime residents amid concerns that the now under-construction Obama Presidential Center in Jackson Park would trigger a wave of gentrification.

The plan set aside $4.5 million from the city’s affordable housing fund to combat displacement fueled by gentrification. Two-thirds of those funds are earmarked to help Woodlawn residents buy homes — or stay in the homes they already own.

The plan also requires 30% of units in any new residential development on 52 vacant lots owned by the city to be set aside for Chicagoans earning between 30% and 50% of the area’s median income, which is $44,600 for a family of four. The city owns 208 vacant lots in Woodlawn.

The City Council approved the first project covered by that agreement in September. That $31 million, 56-unit complex will include 41 affordable apartments on vacant lots once owned by the city. 

However, housing officials have been criticized by longtime residents for taking too long to get additional developments with affordable units underway. 

A New Approach, With New Leadership

For nearly three years, the multi-pronged effort by the Lightfoot administration to dismantle segregation’s tentacles in Chicago has been overseen by Novara, who garnered widespread attention while working at the Metropolitan Planning Council.

Novara spearheaded the group’s 2017 Cost of Segregation report that determined that the divide between White, Black, and Latino Chicagoans cost the city $4.4 billion in lost income and contributed to hundreds of murders, while driving the drop in Chicago’s Black population that began in the 1980s and has only accelerated.

While Lightfoot was running for mayor on a platform that promised to break up the entrenched status quo at City Hall, Novara briefed her on the report and how she could use her power as mayor tackle the legacy of segregation. 

Lightfoot’s decision to tap Novara to lead the newly reconstituted 90-person Housing Department came with an explicit order to confront and then dismantle the pernicious legacy left by racially restrictive covenants, redlining, contract buying and disinvestment.

Novara likened her job to being asked to eat an elephant — and tackling it one bite at a time.

“We live in the world as it is,” Novara said. “My job is to ask how far we can push the window of what is possible, and to ask if we can live with where we land.”

While many of Novara’s plans had to be tossed aside by the COVID-19 pandemic and economic catastrophe, Novara said the calamity also served to clarify the need to address the inequities that worsened the pandemic for many Black and Latino residents.

In a recap of its accomplishments during 2021, department officials said they ended the year having laid “the groundwork to address decades of segregation and disinvestment in Chicago. Government has long been complicit in creating inequitable outcomes by race and class; as such, this is our work to do.”    

Chicago’s 2022 budget sets aside $635 million to maintain and expand affordable housing, using funds from the federal government designed to help Chicago recover from the COVID-19 pandemic.

Novara kicked off the year by releasing the Housing Department’s first-ever Blueprint for Fair Housing, which officials said was designed to be “a comprehensive plan to address the city’s housing segregation, disparities in access to opportunity and history of inequitable investment,” officials said.

The five-year plan was based on an “extensive data analysis confirm that residential segregation creates a cycle of instability and economic hardship with long-lasting consequences,” officials said.

“I have a longer list for 2022 than I did in 2019, 2020 and 2021,” Novara said. “I’m very excited for what we are trying to get done.”

FIRSTHAND: SEGREGATION is part of WTTW’s award-winning multimedia, multi-year initiative focusing on the firsthand perspectives of people facing critical issues in Chicago.

Throughout 2022, WTTW’s FIRSTHAND: SEGREGATION will put a human face on the impact racial divisions have on individuals, the city, and our region through a documentary series, expert talks, text and visual journalism in partnership with South Side Weekly and the Invisible Institute, and community discussions and engagement in partnership with the Folded Map Project and the Metropolitan Planning Council. Visit the website (wttw.com/firsthand) to explore the project.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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