COMBINING INCLUSIONARY HOUSING WITH LONG-TERM AFFORDABILITY July 10, 2008 City of Chicago Richard M. Daley Mayor Chicago Department of Housing Ellen K. Sahli Commissioner

Creating Opportunities Since 1989, City of Chicago invested $4 billion to create & preserve 150,000 affordable units. 3 primary homeownership programs that feed units into CCLT: –New Homes for Chicago / City Lots for City Living –Chicago Partnership for Affordable Neighborhoods (CPAN) –Affordable Requirements Ordinance (ARO)

New Homes / City Lots Created in 1990, revised 2006 Developer applies to participate City provides land for $1 & permit fee waivers Prices: –SF / Condo $195,000 –2-flats: $265,000 Buyer incomes up to 120% AMI Additional buyer subsidies w/New Homes

CPAN Voluntary inclusionary housing program Created 2001, revised 2006 Developer provides min. 10% units affordable & receives: –Permit fee waiver $10,000 per affordable unit –Reimbursement for 3 rd party permit review – $3,000 per affordable unit (max. $50,000 total) –Public way site improvements & landscaping – $5,000 per affordable unit (max. $50,000) Buyer incomes up to 100% AMI Max. prices set by City for each development Additional subsidies available to buyers under 80% AMI

ARO Mandatory inclusionary housing program Created 2003; significant expansion Aug 2007 Applies to developments of 10 or more units that: –Receive a zoning change or PD that: permits a higher floor area ratio changes from non-residential to residential use permits residential uses on ground floor, where that use not previously allowed –Include land purchased from the City –Receive financial assistance from the City –Are part of a PD in downtown zoning district

ARO Developments subject to ARO must: –Set aside 10% units as affordable (20% if receiving City financial assistance) AND / OR –Pay $100,000 fee in lieu per affordable unit not built Fee in lieu or letter of credit for units required before permits issued Buyer incomes up to 100% AMI Max. prices set by City for each development

Long Term Affordability Previously, portion of City investment recaptured at resale, but: - unit was lost to market, - recaptured funds insufficient to build new affordable unit, and - buyers paid property taxes based on market value.

Long Term Affordability City created Chicago Community Land Trust in 2006 to: –preserve long-term affordability of units created thru City programs; –maintain permanent pool of affordable ownership opportunities citywide; and –stabilize property taxes for low / mod income buyers.

CCLT Structure Non-profit 501(c)3 corporation Housed at & staffed by City Dept of Housing Mayoral appointed board: –DOH & DPD Commissioners –Housing & planning practitioners –Eventually, 1/3 CCLT homeowners Chicago largest city to create a municipal, citywide CLT.

Long Term Affordability CCLT keeps homes affordable compared to the market while still giving owners a return on their investment.

City Programs & CCLT At closing, buyer signs 99-year Deed Restriction. Legally binding document, recorded prior to first mortgage. Requires home be resold: –to CCLT or another income-qualified buyer, –at an affordable price set by a formula. Currently, CCLT does NOT own land or develop units.

City Programs & CCLT DOH reviews ALL homeownership units for CCLT eligibility Project follows City program & income guidelines CCLT provides home buyer education & marketing assistance DOH qualifies buyers

Homeowner Benefits Purchase an affordable home Wealth creation, compared to renting: –Earned equity from paying down mortgage –Homeowner income tax deductions –Portion of market equity allowed at resale Housing & property tax stability CCLT assistance

Community Benefits Efficient use of scarce public & private resources Permanent pool of affordable units Sustain mixed-income communities Foreclosure protection: –Pre-purchase education –Pre-screened loan products –Allows for foreclosure intervention

Accomplishments Administering 19 units; 27 under contract 278 units in pipeline representing 19 Community Areas 350 buyers educated Recruited 6 mortgage lenders Trained 13 buyer attorneys

CPAN / Rainbo Village Uptown neighborhood 127 condos; 13 affordable 2 bedroom, 1 bath $134,000 to $145,000 Market value appx. $254,000 Affordable to HH making $54,500 7 closed to-date

More Information Contact: Dena Al-Khatib Department of Housing website: General CLT Info: Burlington Associates: Lincoln Institute of Land Policy: National CLT Network: