Evanston needs stronger affordable housing ordinance

Remarks before the City Council Planning and Development Committee meeting Monday night:

I want to make it clear this evening that I support the alternative proposals of the Housing Commission regarding the set aside percentage, the fee-in-lieu option, the affordability period and allowing not-for-profits to purchase inclusionary units. However, I also wish to raise other issues about the ordinance, dated 3/22/06 to which I will make reference.

• An affordability period of only 15 years will not meet the goals as stated in the preamble. I refer you to the 6th & 9th Whereases (regarding the decrease in number of homes sold at an affordable price between 1994 and 2004 and the trend of increasing house prices that will, without intervention, have a negative impact on the community). Other municipalities around the country who have had such ordinances on the books for up to 40 yrs., including the pioneer, Montgomery County, MD, have found that such a short affordability period has not well served the communities' affordable housing goals. If, however, you decide to retain this 15 year provision, I recommend that you include a provision allowing not-for-profits to purchase affordable units thereby mitigating the loss of these units.
• If development runs as it has recently, and, in the unlikely event that all affordable units are indeed created on site, the 10% set aside provision, will result in the creation of 175 new affordable units in the next five years.—less than 10% of the number of affordable units lost over the past five years. [These figures are based on analysis on Bill Smith’s evanstonnow site].
• The fee-in-lieu provision allows the developer, as of right, to choose a donation to the Inclusionary Housing Fund instead of creating units, failing to serve the goal of being 'inclusionary' but rather being 'exclusionary'. Moreover, the fee-in-lieu is not reflective of the costs of creating affordable units in this community, in effect creating a 500 sq. ft. unit off site (fee in lieu, $62,000/$125, per sq. ft. cost of creation). If you were a developer, wouldn't you rather pay $62,000 than create a 1000 sq. ft. unit (a very modest size) for $100,000--$125,000? That’s the likely scenario under the proposed ordinance. The bottom line is that the city ends up with insufficient funds to create an equivalent affordable unit off site.
• Other issues include the apparent failure to address what will happen to an affordable unit if/when it is sold prior to the 15 year affordability period. It seems obvious to the reader that, with the provisions in Section 5-7-10 (E), resale prices are to be controlled, but with what options or controls of affordability for a subsequent buyer? I think that needs to be spelled out in the ordinance.
• The Affordability Controls, Section 5-7-10, indicate that prices will be established, by among other things, “an available fixed rate 30 year mortgage” and “a down payment of no more than 5%”. I would like to clarify whether this ordinance would be requiring buyers to obtain such a mortgage or is simply using this provision as a guideline for pricing. A similar concern is raised by the 5% down payment provision. I believe that first time homebuyers who are employees of the city can obtain assistance with a down payment that could, along with other available support, total more than 5%. If they are able to provide a down payment in excess of 5%, it seems they should be allowed to do so.
• I have a question about the Inclusionary Housing Trust Fund referenced in the ordinance. I hope you are planning to create a trust fund that is transparent and has public accountability provisions. I believe it should have its own ordinance where all such provisions are clearly spelled out.
• Finally, if you adopt the city staff’s modest recommendations for the provisions in question, I urge you to add a requirement for review after 5 years to assess whether the ordinance is indeed meeting the expectations for increasing, or even maintaining, the supply of affordable housing in our community.