Chicago Sets Aside $1B for Affordable Housing
The financing will support 24 planned projects in the city.
Chicago Mayor Lori Lightfoot along with other city officials have announced a more than $1 billion investment in affordable housing throughout Greater Chicago. The funds allocated to the 24 proposed projects are expected to result in a combination of ground-up developments along with preservation and rehabilitation projects, and marks the largest tax credit investment in Chicago’s history.
All the projects are in the planning stages and closing on them is slated for the upcoming eight to 18 months.
As a direct outcome, the Department of Housing is doubling down on the awarded Low-Income Housing Tax Credits. While the 2019 LIHTC allocation resulted in $398 million invested in 1,083 units across 11 developments, the 2021 funding round shows an estimated $952 million investment slated to result in 2,428 units across the 24 developments.
Funding will come through both 9 and 4 percent Low-Income Housing Tax Credits totaling $32.5 million, $308.6 million from private resources, as well as equity along with $208 million from public loans through Tax Increment Financing and the $1.2 billion Chicago Recover Plan.
The DOH has narrowed down the 51 received applications to the current list, concentrated in several priority areas:
- Tract 1 – Opportunity Area: projects located in high-income and high-cost opportunity areas such as the 51-unit 4715 N. Western Ave. Apartments in the Lincoln Square neighborhood, that will take shape on a parking lot owned by the city;
- Tract 2 – Redevelopment Area: Prioritizes mixed-use projects that also have a retail or commercial element as well as mixed-income developments. This category includes the second phase of 43 Green in Grand Boulevard, within a formerly vibrant retail corridor and will offer a total of 126 units.
- Tract 3 – Transitioning Area: Will concentrate on “projects located in areas undergoing rapid economic and demographic change, and the resulting loss of affordable housing units” according to the 2021 Qualified Allocation Plan. Encompasses four developments, among them the 64-unit, planned 1237 N. California Ave. Apartments, within the West Town – Garfield Park submarket.
- Tract 4 – Preservation: With a main focus on preserving the affordability of existing stock, including the 80-unit Prairie District Apartments near Chicago’s South Side, along with five other projects.
Most (75 percent) of the developments will be transit-oriented, 684 units will be geared toward families with two-, three- and four-bedroom configurations and 394 units will serve residents earning up to 30 percent of the area median income. Based on the Racial Equity Impact Assessment, all 24 projects will have BIPOC (Black, Indigenous and People of Color) participation.
In November, Related Midwest broke ground on Chicago’s first high-rise project with an African-American Minority Business Enterprise (MBE) contractor.