Politics
Key City Panel Set to Consider Mayor’s New Approach to Building Affordable Housing in Chicago
Video: The WTTW News Spotlight Politics team on affordable housing and more of the day’s top stories. (Produced by Andrea Guthmann)
A proposal that would create a city-owned nonprofit housing developer — the centerpiece of Mayor Brandon Johnson’s effort to reduce Chicago’s massive affordable housing shortfall — will face a key test Wednesday.
A joint session of the Housing and Finance committees will consider Johnson’s proposal to leverage the city’s financial power to build what the city calls “green social housing,” permanently affordable, mixed-income and environmentally sustainable housing. The meeting is set for noon Wednesday.
The nonprofit developer, which would be known as the Residential Investment Corp. and operated by the Department of Housing, would be funded with $135 million from the $1.25 billion bond measure approved by the City Council a year ago.
Those funds would be used to make low-interest three- to five-year loans to affordable housing developers through a first-of-its-kind initiative, officials said. Chicago would be the largest city to set up its own nonprofit development arm.
“This financing model will ensure that we have a consistent funding commitment to answer our need for housing units that meet green building standards, and it will make Chicago a national leader for innovatively and steadfastly investing in our communities,” Johnson said in a statement.
If endorsed by the joint committee, the measure could head to the full City Council for a final vote on April 16. The measure set for a vote does not spend any of the bond proceeds. Individual projects that request $5 million or more from the city require separate City Council approval.
Chicago faces an affordable housing shortfall of more than 119,000 units, and more than half of Chicagoans spend more than 30% of their income on rent and utilities, making them burdened by housing costs.
The goal of the program would be to build 400 affordable units annually, officials said.
The effort would give affordable housing developers a way to finance their projects without relying on federal income tax credits or raising money from private equity funds, officials said.
In each development, a minimum of 30% of the units must be made permanently affordable for households earning no more than 80% of the area median income, which is $89,700 for a family of four, according to the proposal.
The buildings must also meet sustainability standards designed to decrease carbon emissions, save on energy bills and improve indoor air quality, according to the proposal.
The city, through its nonprofit housing developer, would own a majority stake in the buildings, according to the proposal.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]
