Politics
City Council Votes 30-18 to Greenlight Mayor’s New Approach to Building Affordable Housing in Chicago
The Chicago City Council voted 30-18 to create a city-owned nonprofit housing developer — approving the centerpiece of Mayor Brandon Johnson’s effort to reduce Chicago’s massive affordable housing shortfall after weeks of intense debate.
The plan is designed to leverage the city’s financial power to build what the city calls “green social housing,” permanently affordable, mixed-income and environmentally sustainable housing.
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.
“We want something better than we have right now,” said Ald. Leni Manaa-Hoppenworth (48th Ward), the lead author of the ordinance. “Our system is broken.”
It took three tries for the proposal to create a nonprofit developer, set to be known as the Residential Investment Corp., to win the endorsement of the Housing and Finance committees and convince deeply skeptical alderpeople to support the plan.
“This is not going to solve our entire affordable housing crisis, but it is part of the solution,” Ald. Maria Hadden (49th Ward) said.
Alds. Brian Hopkins (2nd Ward), Pat Dowell (3rd Ward), Anthony Beale (9th Ward), Peter Chico (10th Ward), Marty Quinn (13th Ward), Raymond Lopez (15th Ward), Stephanie Coleman (16th Ward), Derrick Curtis (18th Ward), Matt O’Shea (19th Ward), Monique Scott (24th Ward), Felix Cardona (31st Ward), Scott Waguespack (32nd Ward), Bill Conway (34th Ward), Nicholas Sposato (38th Ward), Anthony Napolitano (41st Ward), Brendan Reilly (42nd Ward), Jim Gardiner (45th Ward) and Debra Silverstein (50th Ward) voted no.
Johnson said he had fulfilled promises made during the 2023 campaign for mayor to tackle the city’s affordable housing shortage.
“For the people of Chicago who have longed for transformation, that day is here,” Johnson said. ”Here we are, at the halfway point of my administration, we were able to take the hopes and aspirations of working people in the city of Chicago, working with City Council, working with developers, to bring this historic ordinance into fruition.”
The final version of the proposal ensured that both the Office of the Inspector General and the Chicago Board of Ethics would have jurisdiction over the new organization.
It also encouraged the leaders of the new organization to fund developments that create homes of all sizes that are affordable to Chicagoans earning less than 30% of the area median income, which is $35,970 for a family of four.
The nonprofit housing developer would be run by a 15-member board, which includes seven experts in housing as well as the commissioner of the Department of Housing and the city’s chief financial officer.
The new nonprofit organization would be run by the Department of Housing, fueled by $135 million from the $1.25 billion bond measure approved by the City Council a year ago. The city will provide $4.5 million to get the new housing developer to cover start-up costs.
The developer will administer a revolving loan fund that will 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.
Individual projects that request $5 million or more from the city will require separate City Council approval.
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.
Supporters of the plan said the need for a new approach to affordable housing in Chicago was made even more urgent by President Donald Trump's budget proposal, which would slash at least $128 million in federal subsidies, jeopardizing the creation of 2,500 units that are already in the planning process.
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]
