Right? Surely that’s the only explanation for this:
Mayor Emanuel and Alderman Ray Suarez (31st ward) today announced the establishment of an Affordable Housing Task Force consisting of community leaders, aldermen and developers to make recommendations to reform the City’s Affordable Requirements Ordinance (ARO) [more commonly known as inclusionary zoning – DKH] and add 1,000 affordable housing units over the next five years.
One…thousand. Units. Of affordable housing.
Over five years.
To put this in perspective, there are one million, sixty-one thousand nine hundred and sixty-four households in the city of Chicago. Although it’s not the best metric, the standard “housing should take up 30% of your income” rule of thumb suggests that somewhere around half of them need some sort of affordability relief.
Half of one million, sixty-one thousand nine hundred and sixty-four is five hundred and thirty thousand nine hundred and eighty-two.
This is what that number looks like, compared to one thousand:
Oh, but wait! I forgot:
This would represent a fivefold increase over the 187 units created by the ARO since 2007 and ensure that more affordable housing options are offered in high growth neighborhoods.
Great news! They’ve already created 187 units over the last…seven years. So let’s update that chart:
Cool. Looks like we’re well on our way.
There are two major reasons why Chicago’s inclusionary zoning ordinance is so worthless. The first is that developers who trigger IZ have the option of paying $100,000 per unit into the city’s affordable housing trust fund in lieu of actually producing subsidized apartments; given the average price of real estate in city neighborhoods where development takes place, paying that $100,000 “fee” is almost always cheaper than actually giving up revenue on market-rate units.
The second is that IZ only applies to projects with at least ten residential units. Unfortunately, Chicago has made it illegal to build projects with more than ten units in the vast majority of the city outside of downtown. Shockingly enough, if you make it illegal to trigger IZ, then not very many people will trigger IZ.
In combination, these two issues cripple what could be a semi-promising program. They’re why it’s produced only twenty-five affordable units a year since 2007, and why it’s taken over a decade for IZ to produce a single unit of affordable housing in Lincoln Park, a neighborhood that needs them more than almost anywhere in the city.
Actually, though, it’s worse than that. Because once that $100,000 per unit is given to the city, the money is spent on subsidized housing projects that are almost uniformly built in segregated neighborhoods with high concentrations of poverty. In effect, our IZ ordinance is encouraging economic – and racial – segregation. On the one hand, that’s obviously the opposite of what it’s “supposed” to do. On the other hand, Chicago has a long and storied history of promoting racial segregation, so it’s sort of hard to see this as an aberration.
If Mayor Emanuel and Alderman Suarez are serious about turning this ordinance into something that might make even a small difference to Chicago’s affordability and segregation problems, they will either raise the “fee” dramatically, or – better yet – remove the option of paying a fee entirely, and just make everyone build the actual units. They’d also legalize larger developments – ten to twenty-five units, say, or roughly the size of a traditional Chicago courtyard building – in large swaths of the city’s more desirable neighborhoods, since IZ only works by piggybacking off of mid-size to large private development. (They could also, of course, lower the unit threshold to trigger the ordinance – but there’s probably some limit to how small the development can be and still pencil out to be profitable. Besides, if the goal is more affordable units, you’re not going to get there by holding down the size of new projects.)
Then again, if they were serious about this, they wouldn’t have announced a goal of 1,000 units over five years.
More broadly, though, things like this are why I’m generally pessimistic about making traditional affordability programs like inclusionary zoning the centerpiece of housing policy: they’re just vanishingly tiny, compared to the need. And while Chicago has a particularly pathetic version, recall that Los Angeles, which had one of the most ambitious affordable housing programs in the country (a trust fund, in their case), produced only 10% of its needed units before the Great Recession – a number that has since fallen to about 2%.
You need either a truly massive non-market program – taking a third, half, more, of the entire city’s housing out of the market – or you need to allow fairly massive private construction, plus a smaller subsidized program. (The latter, to recap, increases affordability by 1) Allowing lower-cost housing, like apartments, to be built where now only single family homes can be; 2) Increasing the supply of housing; and 3) Allowing the kinds of private projects that generate inclusionary zoning-mandated affordable units.) To be honest, I don’t know that I have a preference between those choices; they both have fairly obvious downsides. But given the political realities of 21st century America – not to mention the financial realities – spending many billions of dollars in a single city to take large amounts of housing off the market seems unlikely, to say the least. If that’s not a realistic option, then the more-private-development-plus-strong-IZ-type-programs seems like the only remaining viable strategy.