Posted by StreetWise in Magazine ArticlesThe City of Chicago’s fifth five-year housing plan calls for construction, rehabilitation and preservation of more than 40,000 units at a cost of about $1.1 billion. According to Mayor Rahm Emanuel, the 2014-2018 plan, entitled “Bouncing Back,” differs from its predecessors because it acknowledges the “unprecedented housing decline in the past decade.” The Plan was unveiled at the January 15 Chicago City Council meeting and sent to the Housing Committee.
According to the Plan, “the foreclosure crisis and Chicago’s dramatic population decline brought housing activity to an almost complete stop.” The City started from scratch in preparing “Bouncing Back,” with input from housing leaders to create a transitional plan, “a pivot toward recovery and an as-yet undefined next phase.”
“Developed with the help of more than 120 housing experts, activists, builders and owners, the plan explicitly recognizes that housing is interconnected with economic development, jobs, quality of life and local land-use issues,” Mayor Emanuel wrote.
The vision of the plan is that a growing marketplace will contribute to the city’s economic health. Guiding principles call for a range of housing options for people of all income levels. The plan also acknowledges a loss of population in the last census and the need to rebuild and improve neighborhood dynamics to bring people back. “Housing strategies should be coordinated with broader efforts to create safe neighborhoods, good schools, thriving businesses, employment opportunities, transportation choices and a sustainable environment.”
The plan recognizes that more than 200,000 people left Chicago between 2000 and 2010, which has caused sale prices to drop. In high-foreclosure communities, 60 percent of housing sales were classified as “distressed” in 2009 and 2010. Even downtown, more than 8,000 condo units were left unsold in 2008.
But some areas, including the South Loop and some North Side neighborhoods, have made modest comebacks since 2012, according to the plan. “The central city now has 6,200 new rental units in the pipeline and the condominium backlog has shrunk to 750 units or less. Single-family and condo construction has restarted in areas around the Loop and in some North Side neighborhoods, after five years of little new-start activity.”
Through the life of this five-year plan, City officials have a wide range of predictions for annual production of housing units: from a pessimistic 936 to an optimistic 6,700. “…about half of those units would be in the central city or strong North Side neighborhoods, leaving most other neighborhoods with little growth.”
“The tale of two cities” theme continues through the rest of the plan. In addition, officials wrote that public money at the local, state and federal level has dropped over the last five years and is likely to remain static. As a result, the City will leverage the resources of public, private, philanthropic and nonprofit partners.
The plan’s implementation method will vary by neighborhood, described as “weak,” “transitional,” “stable,” or “strong.” Strong markets are defined as those with high demand, low vacancies and a readily available financing and amenities. Stable markets have growing demand, relatively low vacancies, available financing and some affordable housing. Transitional neighborhoods have a large supply of affordable housing, “uncertain demand,” high vacancies and hard-to-obtain financing. Weak markets have little or no demand, difficult financing, high vacancies and abandonments, empty lots and few amenities.
“Priming the pump” methods will be the same across all four types of neighborhoods. The City will encourage financial institutions to expand lending – including down payment assistance — especially in low- to moderate-income neighborhoods. It will market neighborhoods as great places to live via its website and homebuyer fairs. Since non-subsidized, small landlords operate 3 out of 4 units of affordable rental housing, the City will also provide them technical assistance, tax incentives and unspecified “dedicated sources of financing.” The plan also promises to continue counseling programs for foreclosure prevention and for new homeowners.
In all four types of neighborhoods, land-use policies will also promote denser housing development within 600 feet of a CTA or Metra rail station. The zoning ordinance amendment passed last July allows a 50 percent reduction in parking requirements, (at a savings to developers of $20,000 per space); it also allows for bicycle parking in lieu of auto parking and it increases building density in terms of floor-area-ratio, land area, size of units and height. “Denser construction, smaller units and reduced parking requirements all contribute to less cost per unit, allowing affordability without use of subsidies,” according to the plan.
Four strategies will be used exclusively in “weak” and “transitional” markets:
development of a program to reuse vacant land and single-family homes
streamlined sales of city-owned vacant land
assembly of buildings and land for redevelopment
adapting vacant land for urban agriculture, greenways or stormwater
Because of foreclosures and abandonments, the city’s inventory of land zoned for low-density residential use has grown to 8,000 parcels, at a holding cost of $800,000 annually. However, the vacant land reuse plan dates to the 1970s and is intended to bring income diversity to neighborhoods. Homeowners will be encouraged to buy multiple adjacent properties for gardens and side yards. A 1,000-parcel pilot program with reduced prices and streamlined land sales will begin this year across multiple neighborhoods.
Regarding land assembly for redevelopment, the plan promises to identify properties for long- or short-term use and develop a system to clear their titles or liens. Large tracts near railroads, highways or industrial areas would be used to generate jobs. If land is not likely to attract housing, the plan suggests urban agriculture such as the small farms in Englewood, Washington Park and Humboldt Park. It also proposes trails and green corridors similar to the 606/Bloomingdale Trail in Bucktown; one of these trails is on 59th Street adjacent to two urban farms in Englewood and the other is an east-west viaduct south of 49th Street in the New City neighborhood.
The $1.1 billion in the 2014-2018 housing plan includes $857 million to create and preserve affordable rental housing: $739 million for multi-family rehab and new construction and $80 million for rental assistance programs such as the Chicago Low Income Housing Trust Fund subsidy program ($75.3 million).
The greatest number of rental units (16,380 or 62 or percent) will be for people making less than 30 percent of the area median income. Another 6,700 units (25 percent) will be for people making less than 60 percent of area median income ($44,000 for a family of four).
The plan also allocates about $203 million for homeownership programs and $69 million for home preservation programs, including roof and porch repairs, emergency heating repairs and Small Accessible Repairs for Seniors, all targeted toward people making less than 80 percent of area median income.
StreetWise Editorial Intern
–Suzanne Hanney contributing