Chicago’s affordable housing program rife with red tape

Time-consuming steps in Chicago’s affordable housing program stops the city from seeing more housing.

Developers looking to build affordable housing in Chicago may have little trouble coming up with the money to purchase city-owned vacant land, but cutting through the red tape is likely to stop them from trying.

Chicago’s “City Lots for Working Families” program is designed to help expedite returning some of the city’s thousands of vacant properties to private ownership at low cost.

The program offers an affordable alternative for developers to help house low-income Chicagoans that compares favorably with the typically expensive and tedious standard “market rate” program.

Even though the program offers affordable housing developers lots at $1 each, it doesn’t advertise the months-long process and extensive bureaucracy developers must navigate to make the purchase. These barriers well exceed those of the “market rate” program.

The gauntlet begins even before the developer submits an application on “ChiBlockBuilder,” the city’s application portal for acquiring city-owned land. Developers must first present their desired property index number to the corresponding alderman for feedback, and then undergo an internal project review supervised by the Chicago Department of Housing. Only after passing an additional roundtable with DOH may the developer apply to the program on ChiBlockBuilder.

But this is only the beginning. The overseeing alderman and the DOH swoop back in for a second project review. The process thus far takes around fourteen weeks.

Once the developer enters “Phase 2” of the program, they’re required to pay a $1,000 application fee and to provide additional documentation. Only then will the DOH submit a work request for an environmental health and safety review on the lots.

They’ll also conduct a design review in conjunction with the city’s Department of Planning and Development. Once all these hurdles are cleared, the plan is deemed ready for “executive project review.”

At this point more city administration gets involved. The Chicago Plan Commission and the Community Development Commission must approve the project in hearings while the Department of Law prepares a redevelopment agreement. This takes around a month.

At the end of this whole process, the developer’s project must pass Chicago City Council, even though it’s clearly unlike a piece of legislation. The project gets introduced, must pass the Housing and Real Estate Committee, and then is subject to vote by the whole council for passage.

In the meantime, the developer must submit closing documents for the lots. Passing the project through city council takes another two months.

Even before the construction and post-closing processes, the DOH will hold meetings with both the developer and the contractor. After doing this, they’ll monitor virtually every stage of the construction process for compliance. Lastly, the buyer of the property will submit annual occupancy compliance documentation, usually for five years.

In total, the process takes around six months, if not longer. Given the possibility that any one of the various governmental agencies can effectively veto the project, it’s not surprising that contractors tend to shy away from such risky endeavors.

Richard Townsell, who leads the Lawndale Christian Development Corporation, is one example: “Builders will move on to other, more certain projects,” he said. “They’ve been waiting for us for a long time.”

With the city estimated to be short by nearly 120,000 affordable homes, Chicago ought to encourage private sector development, especially since the city owns some 10,000 idle lots and that it seemingly only offered 145 lots under the program. The overwhelming majority of these lots are on the South and West sides of the city, areas of disproportionately low income.

Although the city has a program that is designed to promote affordable housing by selling off its land for cheap, that incentive is eroded by bureaucracy.

One promising proposal for Chicago is the “Cut The Tape” initiative, which promises to design a process to expedite reviews for affordable housing projects. By cutting red tape, the city could encourage more would-be developers to buy land and build more affordable homes.

The ball is in Mayor Brandon Johnson’s court to see these proposals through and to make it easier to build affordable housing in the city.