Chicago Mayor Lori Lightfoot says that nearly $400 million in affordable housing construction projects have been selected to move forward through what the City of Chicago describes in a news release as its “improved, more targeted and transparent federal tax credit allocation process.”
The 11 projects reflect the diversity of Chicago’s neighborhoods. All told, the developments will create 1,083 units of affordable housing in Pilsen, Humboldt Park, Woodlawn and several other communities across the North, South and West sides of the city.
“Taken together, these projects represent the dynamic innovation and partnership our city is bringing to expand affordable housing across each of Chicago’s communities and neighborhoods,” Lightfoot said in the statement. “Our future rests on keeping Chicago safe and affordable for every family and resident, providing them the stability and foundation we all need lay to down roots, start a family, grow a business, and pursue our dreams.”
Chosen from a pool of 43 applications, the 11 projects are a mix of new construction, rehabilitation and innovation, including the winner of an international sustainable design competition in East Garfield Park using first-of-its’-kind modular construction produced in a Chicago factory.
The projects are the first selected under the city’s improved Qualified Allocation Plan, or QAP. Each year, the City of Chicago receives an allocation of federal Low-Income Housing Tax Credits (LIHTC) to create affordable rental housing. The QAP encompasses the application requirements and selection criteria for receiving these federal tax credits and tax exempt bonds.
LIHTC is a public-private partnership in which investors provide equity for low income rental properties in exchange for a federal tax credit. The City of Chicago receives a limited number of these housing tax credits to allocate each year based on its population.
The city statement says that, In the past, a lack of consistency on a QAP release date hampered the development community’s ability to plan for new affordable developments. Moving forward, the Department of Housing (DOH) will update the QAP and host a funding round every other June, with the next round coming in June 2021.
The city says the 2019 QAP “was designed with unprecedented transparency to help developers apply for Low Income Housing Tax Credits.”For the first time, the City’s allocation plan specified three market types to receive priority consideration:
- Opportunity (high-income) area projects that preserve existing buildings and create new affordability – such as the Lawson House project, the complete rehabilitation of a single room occupancy residence on the Near North Side into 400 units of long-term permanent affordable housing with in-house wrap around services.
- Redevelopment (low-income) area projects that catalyze investment around key nodes – like the Park Station Lofts, a multi-family, mixed-use development in Woodlawn that will help advance economic vitality in the community while anchoring more long-term affordability.
- Transitioning (gentrifying) area projects that preserve affordability for long periods of time – including the Encuentro Square development at the end of the Bloomingdale Trail. In collaboration with the Park District, 50% of the land will be for park space and 50% is for affordable housing.
“Federal tax credits are the heart and soul of the affordable housing community — they’re the biggest opportunity we have to make an impact,” said Department of Housing (DOH) Commissioner Marisa Novara. “This year’s QAP gave clear selection criteria to ensure tax credits go to projects that meet Chicago’s most pressing housing needs.”
Total development costs for the 11 projects are estimated at $398 million and include all public and private resources: $13.2 million in 9% Low Income Housing Tax Credits to generate an estimated $126.2 million in private resources and equity; an estimated $60.4 million in federal subsidy and $23.5 million in tax increment financing (TIF).
The selected projects are:
- Lawson House, 30 W. Chicago Ave.
- Roosevelt Square 3B, 1201 W. Taylor St.
- 43 Green Phase 1, 321 E. 43rd St.
- Park Station Lofts, 6300 S. Blackstone Ave.
- The Chicago Lighthouse for the Blind Residences, 1800 W. Roosevelt Road
- Garfield Green Apartments, 201 S. Kedzie Ave.
- Metropolitan Apartments, 3557 W. Lawrence Ave.
- Encuentro Square, 3745 W. Cortland Ave.
- 1850 S. Racine, 1850 S. Racine Ave.
- West Haven Park IID, 223-57 N. Damen Ave.
- Park Boulevard 3B, 43 W. 36th St.
The projects will now move forward with project underwriting, design review, zoning approvals and City Council approvals for any public subsidy. Closing on these projects is anticipated within the next 8 to 14 months. A complete list of the 43 projects that applied for the 2019 funding round can be found at www.chicago.gov/qap.