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Developer, Community Group at Odds Over Affordable Housing Requirement

By Alisa Hauser | September 24, 2014 10:00am | Updated on September 24, 2014 10:02am
 A developer's plan to build a four-story, 59-unit apartment building with retail on the first floor continues to be discussed by a local community group, which will vote on the plan in April. 
Proposed Fifield Development at 1822-50 W. Chicago Ave.
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EAST VILLAGE — Members of a small but influential community group say they are not pleased that a developer wants to avoid offering affordable housing onsite at a new neighborhood project.

Under the plan, the developer instead would pay into a fund that would help create low-income housing elsewhere in the city.

A city commission is scheduled next month to rule on developer Steven Fifield's plan to bring 59 apartments and retail storefronts to a vacant lot on Chicago Avenue. (See the project application from "FRC 1850 W. Chicago LLC" here.)

But some residents are opposed to Fifield's decision to "buy out" of a portion of an ordinance that requires the development to allocate a certain percentage of apartment units to low-income renters.

Alisa Hauser says it's common for developers to "buy out" of the affordable housing requirements:

The city's Affordable Requirements Ordinance requires that certain new buildings over 20 units either allocate 10 percent of units as affordable housing or pay $100,000 per unit to a city-managed trust fund that helps to develop low-income housing elsewhere.

Ald. Joe Moreno (1st) said "I'd like them to get as close to six [units] as possible. Or to provide some affordable units and provide a substantial impact fee" to improve Commercial Park.

Alan Schachtman, a vice president of Fifield Companies, said Moreno asked them to build two units, which they will do.

Moreno confirmed that he asked Fifield Companies to build at least a minimum of two affordable units, but opponents are calling the reduction of units as a betrayal by Moreno.

Neal McKnight, president of the East Village Association, said his group believes that "Moreno's approval of this project is a retreat from his long-standing commitment to require developers to actually build affordable housing in the 1st Ward."

A champion of affordable housing who, during the last political campaign, touted the fact he grew up  in affordable housing, Moreno said he "has been successful in ensuring that several other developers in the 1st ward comply with the requirement."

"I have been leading the crusade to having developers build [affordable units] onsite instead of buying out," Moreno said.

Schachtman said that Fifield would abandon the project if the city required it to provide the full six affordable units on site. Offering six affordable units in the 59-unit complex would be "basically an economic hardship," Schachtman said.

"You will not get any income from the [affordable] units and the rents will cover taxes and operating expenses, being zero value," Schachtman said.

Schachtman said the company's plan submitted to the city Planning Commission will offer two of the six required affordable units and $400,000 for the city's Affordable Housing Opportunity fund. The two affordable units would be a one- and a two-bedroom apartment, Schachtman said.

The company would have paid $600,000 with no affordable units, he said.

"Moreno asked us to include two units," Schachtman said. "We usually opt [buy] out and [the affordable units] have no economic value to us. It's a huge hit."

The project would require a rezoning as well as fall under the affordable housing ordinance. The existing zoning would allow Fifield to build no more than 37 units.

The East Village Association's McKnight said the developer "made no showing of a financial hardship and if the inclusion of the small number of affordable units creates a hardship, they should build within existing zoning."

Schachtman said failure to get rezoning will also cause the developer to abandon the project.

Set to come before the city's Planning Commission for a vote on Oct. 16, the four-story apartment building at 1822-50 W. Chicago Ave. would include 49 parking spaces and 14,656 square feet of retail on the ground level.

The building would offer five studio apartments, 17 one-bedroom apartments, 26 two-bedroom apartments and 11 three-bedrooms. 

In May, members of the East Village Association wrote a letter to Moreno indicating that they would not be comfortable with Fifield's offer to donate $200,000 to a nearby park that abuts the proposed development if the group gave it a positive vote to upzone the land for the purpose of building more units.

McKnight said his group is "hoping that Alderman Moreno will change course and seek at a minimum an amendment to the planned development ordinance requiring the construction of all of the affordable units."

Schachtman said that "people are dying for this project to happen."

"It's a big empty lot [now]. It would be a beautifully designed brand-new building that adds life to Chicago avenue," he said.

Pete Strazzabosco, a spokesman for the city's Department of Housing and Economic Development, said the Affordable Housing Opportunity Fund has collected about $43.5 million since its inception in 2003.

Strazzabosco said that developers choose the "in-lieu fee" or buy out a majority of the time rather than build the affordable unit.

The affordable requirements ordinance specifies that 40 percent of the fee goes to the Chicago Low Income Housing Trust Fund and 60 percent goes to the construction and rehab of affordable housing.

Provided the city's planning commission votes favorably on the development, Schachtman said that construction would begin in February or March, with an anticipated delivery in spring 2016.

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