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.