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Discussion Starter · #1 ·
The Affordable Housing Ordinance passed today without any amendments with just two alderman present voting NO. (Preckwickle and who?)

As I understand it, it goes in effect in 90 days and there are only two ways from now to get out of it:
- Submit your application before the 90 days
- Exempt if you have purchased the property less than 2 years before the ordinance.

My question is... will we see a flurry of submittals into the city and/or land acquisitions this summer to beat the deadline? Or will developers who have owned the land for more than 2 years set up phony sales from one LLC to another LLC? What do you think?
 

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Discussion Starter · #3 ·
In most of the neighborhoods that we discuss, the developers will just pay the $100K in-lieu fee to the city.
I figured so much. Although if you were to consider a project such as the Post Office (I know it is exempt), with 300 condos, if they had to provide 20% of units as affordable, you would be required to offer 60 affordable units, or pay $6M. Would it really be worth it for the developer? Would the city maybe consider NOT giving them as large a subsidy if they knew they would opt for the pay-out? How much of a price drop is it from market to affordable?
 

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^No, everyone except you. And its not everyone anyway, im sure there are standards set.

Apparently you didn't see what happens when poor housing is concentrated to specific areas (ie projects). It creates a cycle of poverty and crime, if you didn't notice. You got a better solution btw?
 

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I figured so much. Although if you were to consider a project such as the Post Office (I know it is exempt), with 300 condos, if they had to provide 20% of units as affordable, you would be required to offer 60 affordable units, or pay $6M. Would it really be worth it for the developer? Would the city maybe consider NOT giving them as large a subsidy if they knew they would opt for the pay-out? How much of a price drop is it from market to affordable?
I've got to believe that 60 units at market will make up for the $6M in fees. I don't really see how this will promote mixed income development in the central parts of the city.

In any expensive area, the difference between market prices and affordable prices will be significantly greater than $100K. I could see it preventing a mass exodus in some of the neighborhoods on the cusp of full blown gentrification.

Question for those in the know: in the example above, is there anything in the legislation stating how the city must spend the fees generated from this?
 

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^No, everyone except you. And its not everyone anyway, im sure there are standards set.

Apparently you didn't see what happens when poor housing is concentrated to specific areas (ie projects). It creates a cycle of poverty and crime, if you didn't notice. You got a better solution btw?
....or, you have the poor people ruining neghborhoods where people actually pay alot of money to live in.

'Affordable' Housing is certainly a noble cause....but in the end, its overly idealistic. If you can't afford housing in Chicago.....do what everyone else has to do, and look somewhere else. E.G. if you can't afford houses in Long Grove/Highland Park/Lake Forest....look in Skokie, Park Ridge, Palos Heights, Schaumburg etc etc :bash:
 

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^"Ruining" the neighborhoods?! Like poor people decay everything they touch. Or like rich peoples lives are so much more important, they cant be disgraced to be in the presence of lower income people. Sickening.

My family came from a lower income background, but I had the oppurtunity to go to good schools. Mixed income at least presents a way for poorer people to go to decent schools and get out of the cycle. I wouldn't expect you to understand though. :eek:hno:

Youve got a simplistic view on things. If you have no ideas for ways to avoid creating concentrated areas of high crime and poverty, then your opinion on this is utterly worthless. This isn't a purely capitalistic economic system, there are regulations and government controls for everything - including housing. If you dont like this, then move to another country. :bash:
 

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D-Mite,

A family of 4 earning less than $75,000 a year would be covered according to news sources. Families of 4 earning $75,000 a year do an awful lot of work in this city. They're teachers, nurses, the guy working at the grocery store, police officers, city employees. Some of these jobs can be served by commuters, but others can't. If all of these employees decided to pick up and move away, who would be around to provide services essential to the survival of the city? Would someone with the means want to live in the city with limited basic services?

An extreme example:

If labor can't live close to businesses, where do employers go? Outside the city. And if lower paying jobs go there, where do the higher paying jobs also end up? Yep. And how would people sinking $400,000 into market rate condos feel about an upside down mortgage ten years later? Probably not too good.
 

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Discussion Starter · #10 ·
'Affordable' Housing is certainly a noble cause....but in the end, its overly idealistic. If you can't afford housing in Chicago.....do what everyone else has to do, and look somewhere else. E.G.
It is not necessarily about affording housing in Chicago, it is allowing people to REMAIN in Chicago instead of being pushed out by gentrifying neighborhoods. Also, it does not just cover purchasing homes, but rent on homes as well.
 

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Discussion Starter · #11 ·
Question for those in the know: in the example above, is there anything in the legislation stating how the city must spend the fees generated from this?
The ordinance sets up a trust fund and specifies that 60% be used for construction or rehabilitation of affordable housing, 20% be used for the trust fund's Affordable Rent's for Chicago program, and the last 20% be used for a deposit into the trust fund's corpus.
 

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Well, that's part of the answer. If it's never been attempted, everyone should be extremely skeptical. Which, of course, I am. I see no reason that this should work better than other failed programs such as rent control. Look, if people build new housing, even expensive housing, that leaves older housing to become the new "affordable" housing. Mandating "affordability" in new projects seems like nothing more than pandering. Admittedly, however, I've had a difficult time determining exactly what this ordinance will do.

It seems to me that a major determining factor in the cost of housing is actually land costs, and that this ordinance neither can nor will do anything to change that.
 

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....or, you have the poor people ruining neghborhoods where people actually pay alot of money to live in.

'Affordable' Housing is certainly a noble cause....but in the end, its overly idealistic. If you can't afford housing in Chicago.....do what everyone else has to do, and look somewhere else. E.G. if you can't afford houses in Long Grove/Highland Park/Lake Forest....look in Skokie, Park Ridge, Palos Heights, Schaumburg etc etc :bash:
I don't think we're talking about "the poor" here. We're talking about families of four who earn up to $75K (which is more than three times the poverty level for that family size) and it translates into two-bedroom homes priced at about $183K, from what I've heard and read. Truly "poor" people can't afford prices like that... this program is obviously targeted towards working families who don't quite earn enough to be able to afford market-rate housing.

I understand your reasoning that if someone can't afford to live in Chicago, they should live somewhere else... But the reality is that the city is suffering a serious housing affordability crisis that deepens each year, yet many of the jobs necessary to keep the city's economy functioning aren't extremely high-paying ones... lower-paying support positions are also necessary, and the city can't do without them. What happens when people can't afford to live near where they work? How do such lower-paying jobs get filled if the workers have to endure two-hour commutes to get to them?
 

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Well, that's part of the answer. If it's never been attempted, everyone should be extremely skeptical. Which, of course, I am. I see no reason that this should work better than other failed programs such as rent control. Look, if people build new housing, even expensive housing, that leaves older housing to become the new "affordable" housing. Mandating "affordability" in new projects seems like nothing more than pandering. Admittedly, however, I've had a difficult time determining exactly what this ordinance will do.

It seems to me that a major determining factor in the cost of housing is actually land costs, and that this ordinance neither can nor will do anything to change that.
Chicago is not the first town in the world, or even the US, to pass such legislation. It has been successfully implemented elsewhere--primarily out West. San Diego, Sacramento, a few places in Arizona, towns that have become overpriced in Colorado due to ski tourism, Minnesota, New York City, Boston....

The goal of the program is to insure that working class/middle class families can continue to remain in the city. And there have already been all sorts of programs that have promoted home ownership to working class and middle class families. First-time buyer financing deals and grants effectively reduce the price of a home. I'm not talking about the sub-prime deals, but the kind of deals that have increased home ownership rates nationally over the past 15 years. Economically, this isn't really any different. It just reduces prices further in an expensive real estate market.
 

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The ordinance sets up a trust fund and specifies that 60% be used for construction or rehabilitation of affordable housing, 20% be used for the trust fund's Affordable Rent's for Chicago program, and the last 20% be used for a deposit into the trust fund's corpus.
Uhh....so this amounts to yet another tax on the 'rich' who are frced (indirectly) to subsidize this socialist rubbish?

No one has a 'right' to live anywhere.
 

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When has it ever been attempted is the first question you should ask.
Look at what has happened in other cities where the real estate/rental market were interferred with by idealistic local governments who hoped to 'help the less fortunate."

San Francisco and New York City are prime examples of what happens when the government ties to intrfere with the market--through the use of price ceilings or other imposing legislation.

Look at it this way....say you want to develp a 100 unit building. For th sake of simplicity, we'll say that each unit commands a market price of $500,000. The tower cost the developer $400 million, and he takes home a $100 million profit.

Now lets see what happens under this rubbish ordinance:

Under law, the developer will have to provide housing at 'afforable' prices of $183,000. Or, he can opt out by doling out $100,000 per unit to the city's 'affordable housing fund." In this case, he spends an additional $1,000,000 and loses 1% of his profits.....alternately, he chooses to pass the increased costs to the 100 people who buy units in his building. Thus, each unit will command a $10,000 premium. Inevitably, people will come in here and say "well.....if they can afford to pay $500,000 for a house, they can probably afford the extra $10,000 'premium' that the developer will impose on them. While this may or may not be true....what happens to people who buy units at say....$300,0000? They will also see the effects on a tax--and they may/may not be able to afford the extra costs associated with a back-ward looking tax.

All in all, it will afford some develpers less incentive to enter the housing market in Chicago, especially ones that offer units that are only marginally more exesive than the $183,000 'price ceiling.' (eg units being offered in the $250,000 range.) Essentially, the developers will be forced to subsidize housing--or even worse, offere units at below market price.

I also hold issue with the fact that this $183,000/$75,000 per year 'ceiling' seems rather arbitrary. A family of four making $75,000 per year should easily be able to afford a house worth more than $183,000.
 

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Uhh....so this amounts to yet another tax on the 'rich' who are frced (indirectly) to subsidize this socialist rubbish?

No one has a 'right' to live anywhere.
The irony here...
You were/are a student at UIC, right? So I guess I am/was subsidizing your education? Where do I sign up to get my money back?

You could argue that the state has decided to invest in the future labor pool by allowing you to take advantage of this rubbish socialist subsidy on higher education. Just like I could argue that the city is investing in its future labor pool by making sure there are enough police officers and teachers around to protect and educate my future children.

No one has a 'right' to live in any particular location. Just like no one has a 'right' to a subsidized higher education in any particular location. I don't mind paying for these indirectly because there happen to be ancillary benefits.
 
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