This month, changes to Chicago's Affordable Requirements Ordinance (ARO) will go into effect, raising the in-lieu fees developers must pay to opt out of building affordable units downtown.
Following a March City Council vote, Chicago will begin enforcing an updated version of its Affordable Requirements Ordinance (ARO) in October. The existing ARO, enacted in 2003, "requires developers of private residential projects to make 10 percent of their units affordable, or pay $100,000 to a city-run affordable housing trust fund for every unit they do not build."
"The new ARO raises that fee to $175,000 and $125,000 for downtown developers and those who build in higher-income census tracts, respectively, while slashing that price to $50,000 per unit in areas home to mostly low- and moderate-income residents." This will, it is hoped, shift new affordable units to areas where cheap housing is hard to come by.
The rule change has generated some push-back from developers, who cite already-thin margins. However, "affordable units also offer steady income for private developers, who can count on the subsidized rents of their tenants even during dips in the rental market."
Related Companies Midwest president Curt R. Bailey expressed a willingness to work within the new rules: "It's going to make the bar a little higher to build in downtown, but at the end of the day it should produce a better city for us if we have affordable housing downtown."
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