Yesterday, We Are/Somos Logan Square, a mostly housing-related advocacy group in my neighborhood, held a rally outside the local alderman’s office. As far as a vision for the neighborhood goes, I’ll be forward enough to say—and I hope they would agree—that we’re not so far apart. We Are/Somos and I both want Logan Square to be a neighborhood where people of all economic, social, and ethnic backgrounds feel comfortable, welcome, and able to be a part of the communities they value. We are particularly invested in allowing the people who already feel a part of the community to remain. And we both believe that affordable housing is perhaps the greatest challenge to achieving that vision.
But—and I say this with a great amount of respect for people who are doing something they believe will make their neighborhood better—I am somewhat depressed by their demands.
We Are/Somos’ demands center on getting local aldermen to require developers to provide low-rent units alongside their regular, market-priced units. In general, this sort of policy is called “inclusionary zoning”; in Chicago, inclusionary zoning is regulated by the Affordable Requirements Ordinance, or ARO. The terms are a bit complicated, but essentially any developer of a property with more than 10 units that gets a zoning change has to make at least 2.5% of their units “affordable” (more on exactly what that means later); they can then choose whether to pay a fee equivalent to another 7.5% of their units, or just create another 7.5% worth of affordable units in their building to get to 10% in all.
The local Alderman, Joe Moreno, has already required developers in his ward to build the full 10% of units on site, rather than paying the fee. We Are/Somos’ demands, then, go something like this:
- the number of affordable units should be greater than 10%;
- the affordable units should be targeted to people with lower incomes;
- the affordable units should be targeted to families and have more bedrooms.¹
On their face, these are all things I support. And we need people like We Are/Somos, and others, doing good work to keep up the pressure for housing policies that promote affordability. But there is a problem.
The problem is that there is an enormous gap between even a total victory on the part of We Are/Somos and the kind of neighborhood they, and I, want to build. You don’t need to have any special expertise to see this—you just need a pencil and a napkin.
There are currently about 700 units proposed or under construction in Logan Square that trigger the ARO requirements. (Of course, We Are/Somos has said, at both of the meetings where I’ve seen them speak, that this is far too many.² So perhaps a “total victory” on their part would involve far fewer units. But let’s leave that for a moment.) Based on the alderman’s interpretation of the ARO, that would translate to 70 affordable units. I’m not sure exactly what percentage We Are/Somos are looking for, but I’ve heard 25% and 50% thrown around. That would translate to 175 and 350 units, respectively.
Many of the projects that add up to 700 total units have been in the works for the better part of a year already; many will take over a year to be completed. So let’s say that these 700 units are two years’ worth of development for Logan Square. It seems very unlikely that we could keep that pace up for ten years—at some point there will be a recession, and development will dry up—but let’s just say we did. By 2025, Logan Square would have an additional 175*5, or 875; or 350*5, or 1,750 affordable units.
Logan Square has about 33,000 housing units. By 2025, if it builds 700 units every two years, it will have 36,500. Of those, either 875 (if we get 25% inclusionary zoning) or 1,750 (if we get 50%) will be new affordable units from the ARO. According to the Rehab Network, there are already about 800 subsidized units in Logan Square, so the total would come to either about 1,700 or 2,550.
That means that in 2025, either 95% or 93% of all housing in Logan Square will be priced by the market—under the best possible scenario for We Are/Somos. The fact that the difference between 25% inclusionary zoning and 50% inclusionary zoning over ten years is just 2% of all units in the neighborhood is also pretty striking: it means that if somehow We Are/Somos were able to get every single new unit to be affordable, market-rate housing would still be 89% of the neighborhood.
Which means that without a strategy for keeping market prices down, the neighborhood will be 89% unaffordable. Which isn’t compatible with We Are/Somos’ vision for Logan Square or mine.
Of course, we should take a moment to reflect on just how unrealistically optimistic even this depressing scenario is. We Are/Somos points out, correctly, that developers have every reason to lie about how much affordable housing they’re capable of providing; but the fact that they lie about where that threshold is doesn’t mean that they’re lying about the fact that there is some threshold beyond which the project just doesn’t pencil out.³
I’m not in a position to know exactly where that threshold is. But I can note that in New York, Mayor Bill de Blasio’s new affordable housing plan calls for 25% of new units to be affordable. That’s probably an upper ceiling for Chicago for a few reasons: first, inclusionary zoning works by essentially taking developer profit to subsidize affordable units, and there is almost certainly much more developer profit to work with in New York than Chicago. Second, de Blasio’s plan targets people who make 60% of the region’s average income. That’s the same as Chicago’s ARO—and significantly higher than what We Are/Somos wants. Their demands have been about 30-40% of the region’s average income, which would require significantly more subsidy for each unit, reducing the total number of units that could be subsidized.
In any case, the bottom line is that there is no inclusionary zoning percentage that will keep Logan Square affordable for everyone. By making Logan Square’s affordable housing debate revolve around that figure—10% or 25% or 50% or 100%—we are keeping debate stuck on number that can never be enough. If we don’t bring focus to the bigger picture, we’ve lost before we started.
That doesn’t mean inclusionary zoning isn’t important. It’s unlikely that market prices will ever be low enough for people at, say, 30-40% of the region’s average income in Logan Square, and inclusionary zoning, along with other kinds of subsidized housing, can be absolutely essential for keeping a place for them in the neighborhood.
But that has to be just one part of getting from where we are to where we want to be. In part, we should be looking for more ways to create non-market units. Some people have floated the idea of bringing in units that the Chicago Housing Authority is committed to build or pay for as part of the Plan for Transformation. This project in Cabrini-Green, for example, will have 10% ARO units and 10% units paid for with CHA vouchers, for 20% total. That should absolutely be a model that’s copied all over the city, especially near transit stations.
But none of this changes the fact that the vast majority of housing units in Logan Square will be priced by the market for the foreseeable future, whether we like it or not. We need a plan for keeping the growth of market prices in check.
1 Actually, another demand is something along the lines of: “Stop approving so many big new developments at all.” This is because We Are/Somos believes that these developments, whether they contain affordable units or not, drive up prices in the surrounding neighborhood. That is, they believe that their main mechanism for creating more affordable units also diminishes affordability in other units. To be clear, although I don’t believe that’s true, it’s not at all logically inconsistent—but it does put We Are/Somos in a rhetorically uncomfortable place, I think. if every step forward is a step back, then what’s the point of any of it?
2 One of the weird things about development politics in Logan Square is that it has (at least partially) united groups like We Are/Somos with homeowners’ organizations that oppose new development sometimes explicitly on the grounds that it will reduce their property values—that is, make housing more affordable. So you have a coalition of people who not only have directly opposing ideas about what the effects of new construction are, but who have directly opposing ideas about whether housing should be more or less expensive.
3 And note that what happens when you cross that threshold—when the developer can no longer make enough money for the project to be worth it for them—is not that everything stays the same, an outcome that might seem acceptable. What happens is a) you lose all the potential affordable units, and b) some developer builds whatever is already allowed by the existing zoning. In many cases, that means single-family homes that will sell for the better part of a million dollars. Because every residential zoning category allows those kind of homes, there is no public meeting necessary, no affordable units, and no zoning change you can use as a shield against it: they can just do it. That’s not everyone going back to square one; that’s a huge loss.