In her campaign to become Chicago’s next mayor, Cook County Board President Toni Preckwinkle stresses her experience pushing for more affordable housing when she served on the City Council years ago.
At a recent debate with her rival, Lori Lightfoot, before the Chicago Tribune’s editorial board, both candidates were asked about the growing pressures of gentrification and the shrinking supply of affordable housing in Chicago.
In explaining how she would attack the problem, Preckwinkle criticized a city-run program aimed in part at increasing the supply of affordable housing in better-off neighborhoods that have high rents. The program requires developers of new residential projects to either set aside a share of units at below-market rates or pay into a special fund to support less pricey housing elsewhere.
“The Affordable Requirements Ordinance — ARO — is really challenged because, my understanding is, in the last 12 years, despite the tremendous amounts of money that have gone into it, only 400 family units have been created. Four hundred in 12 years,” Preckwinkle said. “Clearly, 400 family units in 12 years does not constitute success.”
The ARO has faced no shortage of criticism from affordable housing advocates who question whether it’s too full of loopholes to be effective.
That said, the 400-unit figure tossed out by Preckwinkle sounded exceedingly low. So we decided to check her math.
Housing built by developers
The ARO has gone through several iterations over the years, but today it applies to developers of residential buildings with 10 or more units who want to build downtown or ask the city for zoning changes, land or financial support. Those developers must offer 10 percent of their project’s total number of units at below-market rates or, in the alternative, offer fewer than 10 percent but then pay a per-unit fee to compensate for the shortfall.
Daniel Hertz, a housing expert with the Chicago-based Center for Tax and Budget Accountability, said policies like the ARO can help address racial and economic segregation, but face inherent limitations in producing a large volume of affordable units.
“It’s a policy that has the particular advantage of putting affordable units potentially in higher income neighborhoods,” Hertz said. “But it’s not ever going to deliver on the scale of the (housing shortage) problem in Chicago or elsewhere.”
That said, Preckwinkle’s claim significantly lowballs the modest number of units in new projects that the ARO has required developers to offer at lower rates.
The city’s Department of Planning and Development reports that from 2008 through September 2018, developers agreed to include nearly 800 affordable units in projects that have been built or are still underway.
When we asked the Preckwinkle campaign for the source of her number, a spokesman sent us a letter to the editor in the Chicago Sun-Times from the director of a local housing group who cited an online list of affordable housing developments the city offers as a tool for prospective renters.
But Justin Root, the department’s project coordinator for inclusionary housing, told us that list is incomplete. “It gives you a good idea of what’s available but it’s not necessarily in real time and it’s not necessarily the entire amount of projects that have come online and have had or continue to have units available,” he said.
Housing supported by ARO funds
Preckwinkle’s critique of the ARO’s performance misses the mark in another way as well. Department records show its affordable housing fund has received more than $158 million since the program’s inception in 2003, with much of it coming since 2007. Preckwinkle complained that large sum had created just a handful of units.
What she didn’t explain is that those funds are dispersed to promote affordable housing in a variety of ways beyond what is spent by private developers themselves to offer a share of the units they build at affordable rates.
For instance, ARO funds just last year were used to underwrite rental subsidies at more than 1,400 units for residents making less than 30 percent of the area median income, department records show.
Experts said that while those funds aren’t being spent in ways that diversify housing in pricier parts of town, the other programs they do support are critical to helping the city’s low-income residents access affordable housing.
“This program is not the main way that the city creates affordable housing,” said Rachel Johnston of the Chicago Rehab Network.
Preckwinkle said that “despite the tremendous amounts of money that have gone into it, only 400 family units have been created” in the last 12 years through Chicago’s Affordable Requirements Ordinance.
City records show that developers have either promised or produced nearly 800 units under the ARO to date. That doesn’t go very far toward achieving the program’s aim to create more affordable housing in pricier areas of the city or closing the city’s affordable housing gap, so there’s some truth to Preckwinkle’s broader argument.
But her figure of 400 units is far from credible. And her claim also ignores how the millions of dollars in fees collected from developers who opt out of building affordable units under the ordinance support rent subsidies and other affordable housing programs throughout the city.
We rate it Mostly False.
MOSTLY FALSE – The statement contains an element of truth but ignores critical facts that would give a different impression.
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