Chicago Developers Pay Millions to Avoid Affordability Mandates – NMP Skip to main content

Chicago Developers Pay Millions to Avoid Affordability Mandates

Phil Hall
Oct 16, 2015
Chicago Skyline

Chicago real estate developers would rather shell out millions of dollars in municipal fees than follow a city mandate to incorporate affordable housing units in their residential properties.

The Chicago public radio station WBEZ obtained a list of payments made by local developers to the city’s Affordable Housing Opportunity Fund and discovered that these developers paid $77 million over the past 10 years in order to avoid including affordable housing in their properties. These developments were almost all based in expensive residential neighborhoods with a conspicuous lack of diverse populations.

Under local mandates, developers are required to pay a fee if their properties do not meet a 10 percent level for affordable units. A new ordinance increased some fees from $100,000 to $225,000 per each unit not built. Chicago’s affordability measurement for homeowners is defined as a family of four earning $76,000 a year, while for rentals the definition covers a family of four earning $45,000.

The situation is mirrored for apartment complexes funded by federal low income housing tax credits. A WBEZ analysis found these developments were overwhelmingly based in Chicago’s South and West Sides, where the neighborhoods are far less expensive and overwhelmingly non-White.

While no developer responded to requests for an explanation on their opting out of the affordable housing mandate, 27th Ward Alderman Walter Burnett admitted failure in trying to bring affordable housing to his community.

“I allowed this to happen,” he said. “I allowed for one type of group of people with a certain amount of money in the neighborhood, and it needs to be mixed. So I said from here on out people are going to have to do some affordable over here. I can’t let them opt out anymore.” 

Published
Oct 16, 2015
loanDepot And mellohome's 'Grand Slam' Experience Builds Momentum

After recently launching Grand Slam, a new buying experience, loadDepot and its sister company, mellohome, has seen more than 1,400 accepted customer offers.

Industry News
Dec 08, 2021
SoCal VA Homes Stresses Importance Of New VA Loan Limits

SoCal VA Homes, a company that works exclusively with active military and Veteran homebuyers, expressed how important the Federal Housing Finance Agency's new conforming loan limit is to the demographic.

Military Lending
Dec 08, 2021
OpenClose Launches Mobile Assist

OpenClose, a fintech provider of mortgage software solutions for banks, credit unions, and mortgage lenders launched its native mobile app platform, Mobile Assist.

Tech
Dec 07, 2021
Deephaven Heightens Foreign National DSCR Program

Deephaven is amping up its Foreign National DSCR Program as a response to the increase in the real estate investment market.

Non-QM
Dec 07, 2021
Revolution Mortgage Opens Second Mortgage Branch In Cincinnati

Columbus, OH-based Revolution Mortgage announced the opening of its second branch in Cincinnati and 14th branch in Ohio.

Industry News
Dec 06, 2021
Nations Lending Teams Up With NBA Legend Dennis Rodman On Integrated Brand Campaign

Nations Lending, a full-service national mortgage lender, announced the launch of its first integrated brand campaign starring NBA Champion and All-Star Dennis Rodman.

Sales and Marketing
Dec 06, 2021