Better Homes and Choices

A Tale of Housing Challenges in Two Cities: From the summer 2003 issue of Regional Connection

July 11, 2003

Sue Klinkhamer of St. Charles, Ill. and Zenovia Evans of Riverdale are two mayors from very different suburbs. Both looked at the challenges their communities faced — from traffic congestion to an underused downtown — and saw a common thread among them: housing. With support and guidance from the Metropolitan Planning Council, each has found ways to provide better housing choices in her backyard. The kind of housing that contributes to a healthier Chicago region.

A lot of mayors would like to have Sue Klinkhamer’s problems. One of the Chicago region’s most desirable and prosperous suburbs, St. Charles — situated along the picturesque Fox River in eastern Kane County — grew from a population of 22,491 in 1990 to 27,896 in 2000, and is projected to grow another 28 percent by 2030.* Average home sale prices of $345,000 contribute to St. Charles’ appeal to the upwardly mobile.

And, business is booming in St. Charles. Mayor Klinkhamer says that when a developer wanted to build a new Meijer store that would provide 500 jobs, her reaction was unexpected: “I thought, who’s going to work there, and how are they going to get to work?”

City of St. Charles Mayor Sue Klinkhamer.

The downside to the growing property tax revenues that enrich communities like St. Charles is a trend being felt throughout the Chicago region: fewer options for folks at the other end of the housing spectrum. With local rents starting at $900/month, workers at the new Meijer store would not be able to live anywhere near St. Charles. “It was eye-opening when my hairdresser told me she’d love to live in St. Charles, but couldn’t afford it,” Mayor Klinkhamer lamented.

Fifty miles away in southeast Cook County, Riverdale has nearly the opposite problem: “the value of our houses is reasonable and economical,” says Mayor Zenovia Evans. The problem? “The south suburbs get a bad rap. People think of the area as industrial … and closing steel mills haven’t helped our image. We’ve got the housing. We just need to make sure it’s quality housing, and that the jobs are available to make Riverdale a good place to live.”

Village of Riverdale Mayor Zenovia Evans. Photo by Andrew Campbell.

Nestled alongside a thicket of rail lines that serve both commuters and manufacturers, Riverdale has been one of the region’s workhorses since the early 20th Century, providing a convenient location from which to move goods. After World War II, Riverdale’s population boomed — from 2,865 in 1940 to 12,008 in 1960 — with the lure of industrial jobs, and new housing came with. Today, much of that housing is in need of renovation. But, Mayor Evans is thinking even bigger: “I want to improve the image — of not just Riverdale but the surrounding communities — as a place to live. This can only happen through meaningful investment.”

The Right Homes in the Wrong Places

Recognizing the same mismatch throughout the region — a housing stock that did not fit with communities’ visions of their futures — MPC conducted a rental market analysis in 1999, and found that housing challenges were affecting all of northeastern Illinois. The 2000 census confirmed these findings: areas in Lake and Will counties, for example, experienced dramatic job growth that rapidly outpaced the growth of the resident population and the available housing there (see graph). Overall, while northeastern Illinois’ six-counties had grown by 11 percent in population and 16 percent in jobs since 1990, 28,000 fewer apartments were available.

The story is similar when one looks at homeownership figures. In Elk Grove Village, Ill., for example, a community of more than 33,000 near O’Hare International Airport that boasts more than 90,000 jobs, the average home sale price is $191,000, which makes homeownership difficult for most residents. Workers in two-income households can afford a $150,000 home on average, or $80,000 for single-income households. Commute times that have increased 10 percent since 1990, according to the Texas Transportation Institute, provide further evidence that people pursuing job opportunities in such areas cannot afford to live anywhere near them. To tackle this regional jobs-housing mismatch, MPC looked at a number of approaches — employer-assisted housing programs, tax incentives that encourage affordable housing development, Housing Endorsement Criteria to support high quality, well planned developments, and more.

After seeing the alarming findings of the Regional Rental Market Analysis and assessing various strategies to break down the barriers to better housing choices, the Metropolitan Mayors Caucus created a housing task force and asked MPC to be its partner. Mayor Klinkhamer volunteered, since she was interested in creating more diverse housing options in St. Charles, but needed help showing aldermen the benefits. “You say affordable housing and people think of a seven-story building with laundry hanging out of the windows. It was frustrating that people couldn’t see that everyone needs a place to live.” Similarly, Mayor Evans seized the opportunity to brainstorm with other mayors on strategies for encouraging local reinvestment, as well as solutions to Riverdale’s image problem. “We’re just as amenable to new business and development as communities in the north and west.”

For an example of how Housing Endorsement Criteria can help, click here for an image of St. Charles' First Street Redevelopment, which will set aside 10 percent of apartments at affordable rent levels.

Step One: Housing for Village Employees

Employer-assisted housing programs seemed like a logical, first-step approach to both towns’ challenges. Both mayors saw the value of municipal employees living nearby. Not only would they reap all of the expected benefits of employer-assisted housing — shorter commutes, more free time and time with family, and the satisfaction that comes with buying a home — they would also know the community better and be more invested in it. In Riverdale, employee homebuyers would contribute to revitalizing their community by investing time and money in their homes and neighborhood life. In St. Charles, average-wage workers would have access to the very expensive housing market their jobs served. MPC designed a model program, secured additional state incentives through the Illinois Housing Development Authority and introduced the municipalities to local experts who could administer the program through the Regional Employer-Assisted Collaboration for Housing (REACH).

Riverdale’s program, a partnership with the nonprofit Regional Redevelopment Corporation (RRC) announced last November, already boasts one new homebuyer thanks to down-payment assistance from the Village and counseling provided by RRC. Others are at various stages of the process. The City of St. Charles program, in partnership with the nonprofit Joseph Corporation, benefited from the track record of fire-detector manufacturer System Sensor (now owned by Honeywell). They boast 40 successful employee homebuyers after a two-year pilot with MPC and the Joseph Corporation. In January, the City council approved funds for the program — to cover housing counseling costs for participating employees — to which Kane County also contributed. So far, three employees have been approved for the program and have begun counseling.

Inspired by employer-assisted housing as a simple, cost-effective investment with far-reaching benefits for their communities, both mayors began looking for ways to do even more. St. Charles is home to large industrial park of companies that Mayor Klinkhamer sees as logical ones to recognize the benefits of having their employees nearby and expanding St. Charles’ housing stock. She is working with the local chamber of commerce to target companies to educate about employer-assisted housing, and potentially contribute to a pool of funds for housing counseling costs. In Riverdale, the municipal program has “generated quite a bit of interest,” Mayor Evans says. She has also made presentations to local chamber of commerce members, and is looking for ways for the Village to support outreach and counseling costs for businesses offering housing to their employees.

The State of Illinois is helping. First-time homebuyers, whose companies are working with MPC and who meet income criteria, can qualify for matching grants up to $5,000 from the Illinois Housing Development Authority. In addition, the Illinois Affordable Housing Tax Credit Program provides a $.50 tax credit on income tax liability for every $1 in cash, land or property donated for affordable housing creation or invested in employer-assisted housing programs.

Step Two: More and Better Housing Choices

Next, MPC introduced the Mayors Caucus Housing Task Force to housing endorsement criteria that attract and reward proposals for new housing that promote community and economic development while addressing the needs of people who live and work in northeastern Illinois.

These criteria create a common language among developers, aldermen and community leaders that stresses the value of a full range of good housing options.

The benefits were obvious to members of the Metropolitan Mayors Caucus, who voted to adopt the criteria last March. Now the Housing Task Force is encouraging individual municipalities to adopt housing endorsement criteria. Both Riverdale and St. Charles have done so, alongside other municipalities such as Arlington Heights, the Village of Round Lake Park and Wilmette.

Mayor Klinkhamer has invoked the criteria in her recent efforts to find local support for a downtown redevelopment project that would include a mix of shops on the street level and, importantly, upper-level apartments, 10 percent of which will be priced at levels affordable to local workers. “The challenge for the city council was to put their beliefs into action,” she said. “The aldermen were enthusiastic about the plan. They believed in the concept and believed in doing it, just not in their areas.”

The housing endorsement criteria put in writing the idea that a balanced variety of housing choices make a city an appealing choice to locate a new business. “H ousing,” the criteria say, “when appropriately located, encourages the expansion of existing and the location of new businesses and industries within the region.” In Riverdale, Mayor Evans took these ideas to the Campaign for Sensible Growth and Urban Land Institute (ULI) Chicago, who have partnered since 2001 to offer Technical Assistance Panel services to communities to help shape how they grow. A 2003 ULI panel will assess the concerns of Riverdale leaders and residents about one particularly troubled privately owned housing community, and then provide guidance on how to improve the site while retaining affordable housing options — and thus enhance the area’s appeal as a place to live and work. The panel will be followed with a yearlong commitment by the Campaign and ULI to provide ongoing assistance.

Step Three: Regional Efforts & Help from the State

“The Metropolitan Mayors Caucus has been an important ally in tackling the housing crunch because they recognize better than anyone that housing is truly a regional issue,” says MPC Housing Director Robin Snyderman. “Ours is a mobile region, and the numbers show that people will go as far as they have to for a good job. If we want to spend less time commuting and more time with our families, we have to be serious about providing better housing choices.”

MPC took a regional approach in tapping the housing authorities of Chicago and Cook and Lake counties as partners in an initiative to encourage developers to include more affordable housing. Each authority provides Housing Choice Vouchers, a federal program that helps very low income people pay their rent. Working with the Illinois Housing Development Authority, MPC’s Regional Housing Initiative pools the unused vouchers as financing incentives to developers whose proposals meet the housing endorsement criteria. The incentive hit the ground running, providing funding for 25 affordable apartments in 2002, to be developed in Lake and Cook counties as part of broader, mixed-income communities.

There are also promising signs of attention to the housing crunch at the state level. At MPC’s Annual Meeting Luncheon last June, then-gubernatorial-candidate Rod Blagojevich cited the need for a state housing policy to guide and reward development of affordable housing. An early encouraging signal was his appointment of a housing committee to advise his transition team, which MPC staffed. State Rep. Julie Hamos (D-Evanston), a participant on the committee, has kept the ball rolling to implement its recommendations. After hearing legislative testimony last fall from a wide variety of business leaders, among others, on the critical shortage of housing for their employees, Rep. Hamos was appointed chair of the new Illinois House Housing and Urban Development Committee. Thanks to her leadership, the Illinois Housing Initiative (HB 2345) is on its way to becoming law. Along with the Local Planning Technical Assistance Act, it will provide incentives to municipalities to implement sensible housing plans.

“Mayors Evans and Klinkhamer are leading the charge in tackling our regional housing shortage by finding innovative ways to fill in gaps in their communities,” says King Harris, chairman of Harris Holdings, Inc., vice chair of MPC’s Board of Governors and former CEO of System Sensor. “But the State of Illinois should be doing more to reward such efforts — making it easier for busy mayors who are trying to do the right thing. Organizations like MPC can help, by educating the public that a lack of affordable housing affects everyone.”