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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. COMBINING INCLUSIONARY HOUSING WITH LONG-TERM AFFORDABILITY July 10, 2008. Creating Opportunities.

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COMBINING INCLUSIONARY HOUSING WITH LONG-TERM AFFORDABILITY July 10, 2008

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

  2. 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)

  3. 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

  4. 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 3rd 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

  5. 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

  6. 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

  7. 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.

  8. 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.

  9. 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.

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

  11. 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.

  12. 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

  13. 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

  14. 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

  15. 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

  16. CPAN / CCLT @ 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

  17. More Information • Contact: Dena Al-Khatib 312-742-0261 dena.al-khatib@cityofchicago.org • Department of Housing website: www.cityofchicago.org/housing • General CLT Info: Burlington Associates: www.burlingtonassociates.com Lincoln Institute of Land Policy: www.communitylots.org National CLT Network: www.cltnetwork.org

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