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Affordable housing developed with existing resources simply does not allow for rents affordable to people with the extremely low-incomes. More than 200,000 households in Chicago are paying over a third of their income for rent. Of these 75,000 spend more than half of their income on housing.
Living Rents—rent levels set according to the federally determined affordability rate of 30%—are made possible by development and subsidy programs that help landlords and developers keep costs down. In the 1970s and 1980s many such programs existed, but today few linked subsidy and development resources exist.
To ensure Living Rents we must create policies and resources that facilitate a wide range of housing options in communities. The Valuing Affordability Living Rents campaign will explore the following proposals:
Affordable Housing Linkage Fees
Every commercial development in the city of Chicago would be required to pay an Affordable Housing linkage fee of $7.50/square foot to increase the supply and affordability of housing for working families. The linkage fee is a mitigation of rising housing costs caused by economic and job growth. Similar programs exist in Boston which generated more than $45 million and in Berkley, CA which generated more than $1.4 million.
Increased Federal Resources
Federal support has declined steadily since 1978 when $66.6 billion in inflation adjusted dollars was committed for housing. In FY 2001, the HUD budget was $28.5 billion with new housing units subsidized primarily through housing vouchers instead of new unit production. Additional funding for the federal HOME program or the proposed National Housing Trust Fund could make a substantial difference. The Trust Fund would use surplus FHA insurance funds for new rental housing production and subsidy, primarily for families with incomes under 30% of area median income. New resources from the National Housing Trust Fund could build and subsidize 200,000 units in the first year.
Preserving Affordable Housing that Already Exists
There are thousands of currently affordable housing units subsidized through project-based Section 8, Low Income Housing Tax Credits (LIHTC) and other financing and subsidy programs. To preserve these units we need federal exit tax relief for sales to a preservation purchaser, capital funding for purchase and rehab, property tax relief as an incentive for continued provision of affordable housing, and right of first refusal for non-profits and public agencies if an owner decides not to renew existing affordable housing subsidy.
Mandatory Housing Plan for Jurisdictions
Home rule jurisdictions in Illinois would be required to produce annual Housing Plans that assess the housing need in their communities and the ways in which they can facilitate housing development to meet the identified need.
Increased State Accountability
Currently, most housing programs in Illinois are administered by the Illinois Housing Development Authority (IHDA), a state housing finance authority originally created to issue bonds for the development of housing. Not surprisingly, IHDA’s primary mission is to maintain safe returns to investors.
A state department of housing and a legislative oversight committee responsible for housing would increase state accountability through reports on production of housing by location, income level served, and type of housing, and increase leadership for housing policies ad resources.
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