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How the Affordable Requirements Ordinance is Helping to Address Chicago's Affordable Housing Crisis

Updated: 5 days ago



The Affordable Requirements Ordinance (ARO) is a policy in Chicago that aims to increase the availability of affordable housing for lower-income residents. This policy has been in place for over a decade, and has had a significant impact on the city's real estate market and community. In this blog post, we'll take a closer look at the ARO and what it means for developers, residents, and the city as a whole.


Overview of the ARO's requirements for developers:

The ARO applies to developers who receive financial assistance from the city or who build on city-owned land. These developers are required to set aside a certain percentage of units in their projects for affordable housing. The specific percentage varies depending on the type of financial assistance or land being used, as well as the location of the project.

For example, developers who receive a subsidy or build on city-owned land in low-income neighborhoods may be required to set aside 25% of units as affordable housing. In more affluent areas, the requirement may be as low as 10%. In addition to these set-aside requirements, developers may also be required to pay into a fund that helps to finance affordable housing projects in the city.


Benefits of the ARO for the community:

One of the main benefits of the ARO is that it helps to increase the availability of affordable housing in the city. This is particularly important in a city like Chicago, where the cost of living is high and the demand for housing is often greater than the supply. By requiring developers to set aside a percentage of units for affordable housing, the ARO helps to ensure that there are more options for lower-income residents.

In addition to increasing the availability of affordable housing, the ARO also helps to create more diverse and mixed-income neighborhoods. By requiring developers to include units that are affordable to a variety of income levels, the ARO helps to create a more diverse community and promotes social and economic integration.


Potential challenges and controversies surrounding the ARO:

Like any policy, the ARO is not without its challenges and controversies. One potential challenge is that the requirements for developers may be seen as burdensome, particularly for smaller developers who may not have the resources to meet the set-aside requirements. This may discourage some developers from pursuing projects in the city, which could ultimately lead to a reduction in new development and a slowdown in the real estate market.

Another potential controversy surrounding the ARO is the issue of gentrification. Some critics argue that the policy may lead to gentrification in certain neighborhoods, as developers may be more likely to build in areas where they can meet the set-aside requirements more easily. This could lead to displacement of lower-income residents and a loss of cultural diversity in certain neighborhoods.


Affordable Requirements Ordinance (ARO) in Chicago

Chicago has been facing an affordable housing crisis for years, with rising housing costs and a shortage of options for lower-income residents. The Affordable Requirements Ordinance (ARO) is one policy that the city has implemented in an effort to address this crisis. In this blog post, we'll take a closer look at the ARO and how it is helping to create more affordable housing options in Chicago.


Overview of the ARO and its role in addressing the crisis:

The ARO applies to developers who receive financial assistance from the city or who build on city-owned land. These developers are required to set aside a certain percentage of units in their projects for affordable housing. The specific percentage varies depending on the type of financial assistance or land being used, as well as the location of the project.

In addition to these set-aside requirements, developers may also be required to pay into a fund that helps to finance affordable housing projects in the city. This fund is known as the Affordable Housing Opportunity Fund (AHOF), and it provides financial assistance to developers who are creating affordable housing units.

Success stories and examples of how the ARO has helped to create more affordable housing options:

One success story of the ARO is the development of the Dearborn Homes public housing project on the Near South Side of Chicago. This development was built on city-owned land and received financial assistance from the city, which triggered the ARO requirements. As a result, the developer was required to set aside 25% of units as affordable housing.

The Dearborn Homes development consists of 360 units, with 90 units reserved as affordable housing. These units are available to residents who earn 60% or less of the area median income (AMI). The development also includes on-site amenities such as a community center, fitness center, and outdoor playground.


Future goals and potential challenges in implementing the ARO:

While the ARO has had some successes in creating more affordable housing options in Chicago, there is still a long way to go in addressing the affordable housing crisis. One future goal is to increase the percentage of units that must be set aside as affordable housing for developers who receive financial assistance from the city. This could potentially lead to the creation of even more affordable housing units in the city.

However, there are also potential challenges in implementing the ARO. One challenge is finding the resources to finance affordable housing projects, particularly as the demand for affordable housing continues to grow. Another challenge is ensuring that the set-aside requirements for developers are reasonable and feasible, in order to avoid discouraging new development in the city.

The Affordable Requirements Ordinance is a complex policy that has had a significant impact on the real estate market and community in Chicago. While it has had some successes in increasing the availability of affordable housing and creating more diverse neighborhoods, it has also faced challenges and controversies. It will be interesting to see how the policy continues to evolve and impact the city in the coming years.

The Affordable Requirements Ordinance is an important policy that is helping to address Chicago's affordable housing crisis. While it has hadcertain successes in creating more affordable housing options and promoting diverse, mixed-income neighborhoods, there is still more work to be done to fully address the crisis. Future goals for the ARO include increasing the percentage of units that must be set aside as affordable housing, and finding ways to finance and support more affordable housing projects. However, there are also potential challenges in implementing the ARO, such as finding resources to finance projects and ensuring that the set-aside requirements are feasible for developers. Overall, the ARO is an important tool in addressing Chicago's affordable housing crisis and ensuring that all residents have access to quality, affordable housing options.

If you're a developer working on a project subject to the Affordable Requirements Ordinance in Chicago, Permit Studio can help you navigate the permit process and ensure that your project is in compliance with the ARO requirements. Our experienced team of permit expediters can help you obtain all necessary permits and approvals in a timely and efficient manner. Contact us today to learn more about how we can support your ARO project and take the hassle out of the permit process.

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