(A) Title. This section shalt be known and cited as the "Pilsen-Little Village ARO Pilot Area Ordinance".
(B) Purpose. The purpose of this section is to establish modified affordable housing requirements for designated neighborhoods along the proposed El Paseo multi-use trail project that are experiencing gentrification. The goals of these modified requirements are to mitigate the displacement impacts associated with gentrification, better protect the interests of the area’s economically vulnerable residents from demographic and housing market change, and preserve the economic diversity critical to a healthy economy.
(C) Relationship To 2015 ARO. The requirements in this section supplement or modify the affordable housing requirements in Section 2-44-080. In the event of a conflict between these requirements and the requirements in Section 2-44-080, the requirements in this section will control; provided, however, when a residential housing project receives financial assistance from TIF Funds, the requirements set forth in Section 2-44-080 will continue to apply and will control in the event of a conflict.
(D) Definitions. Except as provided below, defined terms shall have the meanings given in Section 2-44-080:
"Accelerating" is a term used to describe a census tract that (i) had low to moderate home values in 2015 (i.e., a median home value in the bottom three quintiles of all census tracts in the City), but (ii) experienced a high appreciation rate between 2010 and 2015 (i.e., appreciation rate in the top two quintiles of all census tracts in the City).
"Additional units" means the extra units required to be affordable under this section in excess of the units required to be affordable under Section 2-44-080.
"Adjacent" is a term used to describe a census tract that (i) had low to moderate home values in 2015 (i.e., a median home value in the bottom three quintiles of all census tracts in the City), (ii) experienced a low to moderate appreciation rate between 2010 and 2015 (i.e., appreciation rate in the bottom three quintiles of all census tracts in the City), but (iii) touches the boundary of at least one census tract that had high home values in 2015 (i.e., a median home value in the top two quintiles of all census tracts in the City) or a high appreciation rate between 2010 and 2015 (i.e., appreciation rate in the top two quintiles of all census tracts in the City).
"Affordable unit" means a housing unit required by this section to be affordable, whether located on-site or off-site and whether a rental unit or an owner-occupied unit.
"Appreciated" is a term used to describe a census tract that (i) had low to moderate home values in 2000 (i.e., a median home value in the bottom three quintiles of all census tracts in the City), and (ii) high home values in 2015 (i.e., a median home value in the top two quintiles of all census tracts in the City), and (iii) experienced a high appreciation rate between 2000 and 2015 (i.e., appreciation rate in the top two quintiles of all census tracts in the City).
"Demographic change" means a shift in the demographic conditions of an area in which at least three of the following four population changes have occurred from 2010 to 2015, relative to the citywide median: percentage of homeowners has increased; percentage of minorities (as defined in Section 2-92-670) has decreased; percentage of residents with a bachelor’s degree or higher has increased; and median household income has increased.
"Early displacement" is a term used to classify census tracts that are showing early signs of gentrification. These census tracts (i) have a vulnerable population at risk of displacement from rising housing costs, (ii) have undergone demographic change indicative of gentrification, and (iii) have adjacent, accelerated or appreciated market conditions, as determined by the Commissioner based upon published data regarding Chicago or area median income, the cost of housing, or other data indicative of gentrification or loss of affordable housing.
"First units" means the units required to be affordable under Section 2-44-080.
"Little Village" means the neighborhood within the Pilsen-Little Village Pilot Area that consists mainly of census tracts that are susceptible to displacement.
"Pilsen" means the neighborhood within the Pilsen-Little Village Pilot Area that consists mainly of census tracts that are experiencing early displacement.
"Susceptible to displacement" is a term used to classify census tracts that are at-risk of gentrification. These census tracts (i) have a vulnerable population at risk of displacement from rising housing costs, (ii) have not undergone demographic change indicative of gentrification, but (iii) have accelerating or adjacent market conditions, as determined by the Commissioner based upon published data regarding Chicago or area median income, the cost of housing or other data indicative of gentrification or loss of affordable housing.
"Vulnerable population" means a population with at least three of the following four characteristics based on 2015 data: percentage of renters is higher than the citywide median; percentage of minorities (as defined in Section 2-92-670) is higher than the citywide median; percentage of residents without a bachelor’s degree is higher than the citywide median; and median household income is lower than the citywide median.
(E) Boundaries. A map of the Pilsen-Little Village Pilot Area is published in the Journal of the Proceedings of the City Council of the City of Chicago of December 12, 2018, page 92139*, and on file in the Office of the City Clerk and made a part hereof. The boundary lines of the Pilsen-Little Village Pilot Area follow streets, and such boundary lines are to be construed as the centerlines of said streets.
* Editor’s note – Coun. J. 12-12-18, p. 92132, § 2, did not include the page number; it has been inserted at the discretion of the editor.
(F) Stage of displacement. Pilsen is characterized primarily by early displacement. Little Village is characterized primarily as susceptible to displacement.
(G) Modified ARO requirements. The requirements of Section 2-44-080 shall apply in the Pilsen-Little Village Pilot Area, except as modified below:
(1) Increased in lieu fees. The in lieu fees for affordable units in the Pilsen-Little Village Pilot Area shall be as follows: (i) $178,469 per affordable unit in Pilsen; and (ii) $101,388 per affordable unit in Little Village. Each in lieu fee shall be subject to the annual adjustment set forth in the definition of "in lieu fee" in Section 2-44-080(B) and collected pursuant to Section 2-44-080(G). Notwithstanding Section 2-44-080(F)(2) – (4), in lieu fees collected within the Pilsen-Little Village Pilot Area shall not be reduced because of any sale or lease of required affordable units in the residential housing project to an authorized agency.
(2) Required percentage of affordable units. Except as provided in subsection (3) below, the percentage of units required to be affordable in a residential housing project in the Pilsen-Little Village Pilot Area, whether rental or for sale, is increased from 10 percent to 20 percent.
(3) Incentive for larger units. Notwithstanding subsection (2) above, in the Pilsen-Little Village Pilot Area, the Commissioner, after consultation with the alderman of the ward in which the residential housing project is located, may reduce the required number of affordable units in exchange for units with more bedrooms, as follows:
(i) one 2-bedroom unit is equivalent to 1.25 studio or 1-bedroom units; and
(ii) one 3-bedroom unit is equivalent to 2.5 studio units or two 1-bedroom units.
(4) Location requirements. In the Pilsen-Little Village Pilot Area, first units must be provided on-site. Additional units may either be provided on-site or the developer may pay a fee in lieu of the establishment of one or more such additional units. Notwithstanding the foregoing, when a residential housing project receives financial assistance from TIF Funds, all affordable units must be provided on-site.
(H) Pending applications. This section shall apply to all residential housing projects subject to the affordable housing requirements in Section 2-44-080, unless: (1) an ordinance authorizing a City land sale or financial assistance, as described in Section 2-44-080(C), has been introduced to City Council prior to January 1, 2019; or (2) an ordinance authorizing a rezoning of property, as described in Section 2-44-080(C), has been introduced to City Council and (i) in the case of projects that are subject to planned development review, the Chicago Plan Commission has adopted a resolution recommending approval of the planned development prior to January 1, 2019, or (ii) in the case of any other rezoning of property, the Committee on Zoning, Landmarks and Building Standards has voted to approve the rezoning prior to January 1, 2019.
(I) Rules. The Commissioner is authorized to adopt such rules as the Commissioner may deem necessary for the proper implementation, administration and enforcement of this section. The Commissioner shall provide an annual report to the City Council Committee on Housing and Real Estate detailing the outcomes of the pilot program.
(J) Expiration. This section shall expire and be repealed of its own accord, without further action by the City Council, on December 31, 2023.
(Added Coun. J. 12-12-18, p. 92132, § 2; Amend Coun. J. 11-20-19, p. 9510, Art. II, § 6 and Art. IV, § 6)