Not a single unit of affordable housing has been built in Lincoln Park for 35 years

Alternative title: Chicago’s Affordable Housing System is Broken.

But thanks to the development at Children’s Memorial Hospital, there will soon be 64 new affordable homes in the heart of Lincoln Park! And in another 35 years, maybe Lincoln Parkers will deign to build some more.

A rendering of the development at Children’s Memorial Hospital in Lincoln Park.

Though, actually, the claim in the title isn’t quite fair. The words “built” and “affordable” are tricky: most housing that is affordable – in the plainest sense of being within the financial reach of a large majority of people – doesn’t count as “affordable housing,” and it isn’t “built.”

But we’ll get back to that in a moment. At issue here is “affordable housing” in a narrower sense, meaning homes whose prices are kept below market rate through subsidies and government mandates. It’s that type of housing that urban progressive types are most likely to get excited about; indeed, one of the most common ways that cities battle economic segregation is something called “inclusionary zoning,” which requires that certain types of new developments – it varies from city to city – set aside a certain percentage of their housing units to be “affordable,” or priced below regular market values.

I have a bit of a philosophical problem with this as a primary strategy for promoting housing justice, which is that designating islands of “inclusionary zoning” in a sea of zoning that is decidedly exclusionary feels about as righteous as designating “free speech zones,” outside of which one apparently cannot speak freely. Basic constitutional rights – like not having the government target you for exclusion from communities in which you would like to live – seem by definition like things that ought to apply everywhere.

But beyond that, the situation in Lincoln Park – and the rest of Chicago, and presumably much of the rest of the county – demonstrates the profound practical shortfalls of inclusionary zoning as an affordable housing strategy. Namely, in order for inclusionary zoning to create new units of affordable housing, there have to be new developments. And not just any new developments: like most cities’, Chicago’s inclusionary zoning ordinance only applies to relatively large, dense buildings, or ones that have been given special permission to build more densely than the original zoning allowed.

But as we’ve seen, wealthy, high-demand neighborhoods like Lincoln Park have been building virtually no new housing – and vanishingly few large projects that would trigger the inclusionary zoning rules – for well over a decade, at least. That means there’s no way they can add affordable housing units. The incredibly tight restrictions on market-rate housing also strangle affordable housing. It’s no accident that the first project to include affordable units in 35 years is also easily one of the densest (it includes two 21-story towers) residential developments in Lincoln Park in decades.

Change in housing units, 2000-2012. Blue = gain, Red = loss.
Change in housing units, 2000-2012. Blue = gain, Red = loss.

Of course, it’s actually worse than that: even when the inclusionary zoning ordinance is triggered, developers have the option of making payments to the city’s affordable housing fund, rather than actually building affordable units. As it happens, those payments are almost always cheaper than forgoing the revenue on market-rate units, so developers almost always choose to make them. But again, even that modest concession to the city’s affordable housing program is only triggered by the kind of developments that Chicago has made illegal almost everywhere outside of downtown.

As a result, to the extent that “affordable” housing units get built at all, they’re built by nonprofit or government organizations. But nonprofits are most likely to build housing where they can afford to buy land, which generally means neighborhoods that are already relatively affordable (read: poor). The largest federal program in support of new-build “affordable” housing, LIHTC, also gives non-profit developers bonuses for locating their projects in already-poor neighborhoods. And most of the new affordable units built by the Chicago Housing Authority are redeveloped on the sites of old public housing projects, which federal courts have already found were deliberately chosen to create segregated ghettos.

The bottom line is that if we make a map of the city’s affordable housing units, they are overwhelmingly concentrated in low-income neighborhoods. In other words, Chicago’s affordable housing program doesn’t promote economic integration: it promotes segregation. It’s broken.

Unshockingly, subsidized housing is extremely concentrated in low-income neighborhoods.
Unshockingly, subsidized housing is extremely concentrated in low-income neighborhoods.

I said at the top that focusing on government-supported, non-market “affordable” housing doesn’t tell the entire story. Indeed, given that Chicago’s affordable housing ordinance defines “affordable” as something a single person making $50,000 a year, or a family making $72,000, can reasonably purchase, plenty of market-rate housing in Chicago is actually in much closer financial reach to people of low and moderate income than officially “affordable” units.

But those market-rate affordable units usually come about as a result of something called “filtering.” The story is this: Building new homes is expensive. In Chicago, it might cost somewhere between $250,000 and $350,000 per unit. Given those costs, it’s unlikely that for-profit developers are going to build anything new that’s affordable for people who aren’t pretty well-established financially.

But maintaining a building that’s already been built is much cheaper. That means for-profit landlords can reasonably make a profit by renting (or selling) units in older buildings to lower-income people. They’re also less likely to be able to get wealthier people to pay wealthier rents, since the buildings have probably lost some of their sheen since construction: a few dings, an outdated style, older finishes and appliances. The process of newly-built units that are targeted to the relatively well-off gradually becoming cheaper and less fancy is “filtering,” and – especially since the invention of building standards that outlawed the construction of tiny or dangerous apartments – it’s one of the main ways that affordable market-rate housing has been added to American cities.

Except that Chicago’s zoning laws interrupt that process, too. Because if you can’t build new housing units to sell to the well-off, you do gut-rehabs in buildings that already exist, and essentially turn them into new-builds, along with new-build prices. Or you do a sort of ultimate gut-rehab, tearing down a, say, two-unit building and replacing it with an almost identical two-unit building, just so it will be new and you can charge more money for it.

In conclusion, restrictive zoning ruins both market-based affordable housing and one of the most popular forms of government-subsidized affordable housing. Inclusionary zoning laws won’t work without a much broader kind of zoning reform.

 

 

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2 thoughts on “Not a single unit of affordable housing has been built in Lincoln Park for 35 years

  1. Also, and more directly, in as much as the inclusionary zoning requirements raise the cost of new construction, you will get less new construction, again raising prices of all housing units due to the two types of filtering.

    1. Also true, yes. But you can make the argument that even if inclusionary zoning raises overall prices, it’s worth it overall if it does a good enough job of promoting equity. That’s obviously a judgment call. My point here is that no one ought to be happy with what’s going on currently – no inclusionary zoning housing and higher market prices.

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