Chicago Mayor Rahm Emanuel on Thursday is set to roll out another pre-election policy aimed at adding affordable housing to the city’s rapidly gentrifying and more expensive neighborhoods.
The mayor wants to create the Chicago Opportunity Investment Fund, which would provide low-interest loans to developers who buy multifamily buildings in high-cost neighborhoods. Those loans will come with a caveat: 20 percent of the apartments must be priced affordably for at least 15 years.
“If a neighborhood is on an upswing, we don’t want longtime residents to be the victims of that upswing,” Emanuel told WBEZ. He said he hopes the effort will reduce racial and economic segregation between neighborhoods.
Emanuel faces a growing list of challengers to his in 2019 re-election bid, and a frequent criticism from some of them is that his policies have pushed low- and middle- income residents out of the city.
Chris Wheat, the mayor’s chief of policy, said the city hopes this new program will create at least 300 new affordable apartments in some of the city’s most expensive neighborhoods. The units will be set aside for people making up to 50 percent of the area median income, which is $39,500 for a family of four.
“The purpose of the fund is to focus on neighborhoods where we’re seeing rising rents and relatively high rents to begin with,” Wheat said. “Chicagoans should not just be forced to live in one neighborhood or another because of their income.”
The city already requires developers to include affordable housing in new construction or rehab projects. But many take advantage of a loophole that allows them skip building low-income units and instead pay a fee.
Emanuel wants to kick in $5 million from those fees toward the new $30 million loan program. The remaining $25 million will come from private investors and other sources, according to his office.
“It’s good for people of lower incomes to live in strong neighborhoods and have wide access to a functioning community,” said John G. Markowski, president and CEO of the Community Investment Corporation, which would run the program. “This is an extraordinarily efficient way to accomplish that from the city’s perspective.”
Markowski said building new affordable housing can cost hundreds of thousands of dollars per unit. But he said by offering an incentive and targeting existing buildings, the city is spending far less to create new affordable apartments in sought-after neighborhoods.
If Emanuel’s new program wins full City Council approval, it would be one of several recent city efforts aimed at preventing long-time residents from being priced out of their homes. The city is currently running two affordable housing pilots that cover hot neighborhoods, such as Ukranian Village and West Town.
And on Wednesday, Chicago aldermen also gave preliminary approval to another Emanuel-backed plan aimed at easing the financial pain for long-time residents in one rapidly gentrifying area on the Northwest Side, adjacent to the 606 trail. The $1 million program would offer up to $25,000 loans to eligible homeowners to help pay for basic home repairs. That plan still needs full City Council approval, which could come next week.
Becky Vevea covers city politics for WBEZ. Follow her @beckyvevea.
Claudia Morell contributed reporting for this story.