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IHO Revisions Passed in Evanston

An inclusionary housing ordinance (IHO) requires a certain percentage of units in any new or substantially rehabbed residential building in a municipality to be affordable to people at moderate or low incomes.

On Monday, October 29, Evanston's IHO Sub-Committee passed a revised ordinance that Joining Forces believes is a great improvement upon the one passed in 2015 (which was a great improvement upon its predecessor). Here is an overview of the ordinance, with new changes highlighted:

Covered Developments:
  • The ordinance applies to any development with 5 or more units
NEW: It used to be that developments under 10 units that were not near public transportation were not covered.

# of Units That Must Be Affordable:
  • 10% in privately funded developments
  • 20% inf developments that use public funding
Fees in Lieu
(IHOs often allow developer to pay fees into a fund instead of including the affordable units on-site in the development.)

  • Developers that stay within the base zoning can pay fees in lieu for all required affordable units.
  • Developers that receive or allowances beyond the base zoning must include half of the required units on-site (5%) and can pay fees in lieu for the other half (5%).
NEW: It used to be that all developers could buy out of all on-site units using fees in lieu, regardless of variances or allowances.

  • Fee in Lieu Amounts:
    • In Downtown and Research Park Zoning Districts: $175,000 per unit
    • In other zoning districts: $150,000 per unit
    •  For condominium developments only that elect to pay the fee in lieu of all onsite units: 1.5 times the fee in lieu shown above, per unit, for either Downtown or non-Downtown zoning districts.
NEW: The fee in lieu used to be $100,000 for units near public transportation and $75,000 for units not near public transportation.
NEW: The fee in lieu will be will be adjusted annually based on the Consumer Price Index. It used to be subject to annual review and revision by the city council.
NEW: Fees in lieu will be due at the same time as building permits. They used to be due later, prior to the issuance of a temporary certificate of occupancy.  

Duration of Affordability:
  • In perpetuity for owner-occupied units
  • 30 years for rental units 
NEW: The affordability period used to be 25 years for rental units

Appearance & Size of Affordable Units:
  • The exterior and common areas of affordable and market rate units must be the same.
  • The interior appearances and finishes may be different in affordable units, but the materials must be Contractor Grade or higher.
  • The size of the affordable units may be less than that of the market rate units but must meet or exceed the minimum size requirements in the City code.
NEW: Appearances, materials, and sizes used to have to be the same. 

Who Is Eligible for the Affordable Units:
  • Households whose incomes do not exceed 100% AMI* (adjusted for household size) for owner-occupied units
  •  Households whose incomes do not exceed 60% AMI* (adjusted for household size) for rental units
NEW: It used to be that eligibility was as follows:
  • For owner-occupied units:
    • Near public transportation: 50% of affordable units for households earning up to 100% AMI and 50% of the units for households at 80% AMI
    • Not near public transportation: 50% of units for households earning up to 120% AMI and 50% of the units for households at 80% AMI
  • For rental units:
    • Near public transportation: 50% of affordable units for households earning up to 60% AMI and 50% of the units for households at 50% AMI
    • Not near public transportation: 50% of units for households earning up to 80% AMI and 50% of the units for households at 60% AMI
* AMI = Area Median Income--half the population earns more than this, half less.

Alternative Equivalents: 
  • The City Council can consider and approve alternative equivalent proposals at its discretion.
NEW: The new ordinance adds that developers can offer "fewer on-site affordable units at prices affordable to households at lower income levels, such as 30% AMI, or more affordable units at higher income levels such as 80% AMI." However, the ordinance also states, "To qualify as affordable units, rental units shall not exceed 80% AMI and ownership units shall not exceed 120% AMI, both adjusted for household size."

Reduction of Requirements:
NEW: The ordinance used to include a clause that allowed consideration of proposals that failed to meet the affordability requirements. This clause has been removed.