A deficiency of state housing funding means local governments must establish creative partnerships to meet affordable housing needs.
The Governor’s Comprehensive Housing Plan and Illinois Comprehensive Housing Act are important advances in Illinois ’ housing efforts, but the state can do more. According to a 2006 report from the Center for Tax and Budget Accountability and United Power for Action and Justice, about 90 percent of the money the state spends on affordable housing comes from federal resources. Of that, only $49 million is directed toward affordable housing development and preservation, and only assisted or created 819 units of housing in 2005. Meanwhile, over 35 percent of all Illinois households remain in need of affordable housing. Because the state’s funding for affordable housing fails to meet the state’s needs, communities struggle to find resources and the market is unnecessarily constrained for private developers.
The following ideas demonstrate ways elected officials and private developers can cooperate and, ultimately, opportunities for meeting the state’s housing needs.
1) Offer incentives for public-private workforce housing partnerships Florida invests 10 times as much in affordable housing as Illinois, and does it in innovative ways. In 2006, the Florida legislature passed an affordable housing bill that included $50 million for the Community Workforce Housing Innovation Program. Forgivable loans and other incentives will encourage public-private partnerships for the construction or preservation of affordable rental and for-sale homes. A competitive Request for Proposals process will promote innovation and cooperation among government officials, employers and developers. Florida prioritizes housing in high cost/high growth counties, and award criteria include a minimum affordability period of 20 years, 50 percent set-asides for workforce housing, with 30 percent set asides for essential services personnel housing (i.e. nurses, teachers).
2) Support schools near new housing development In 2005, Massachusetts adopted Chapter 40S, Smart Growth School Cost Reimbursement , which mitigates increased education costs associated with the increase of students in areas with higher density housing. Schools in districts with smart growth zoning (i.e. higher density, transit orientation) are eligible for per-pupil bonuses for new students living in smart growth zones. In Illinois, the proposed SB 2698: Good Housing Good Schools Bonus amendment to the Local Planning Technical Assistance Act, sponsored by Sen. Iris Martinez and Sen. Miguel del Valle,would give a per-pupil bonus to school districts with new or renovated affordable multifamily housing that advances the state’s housing plan. This bonus – $1,120 for each two-bedroom unit, $560 for each additional bedroom – would be paid by the State Board of Education directly to the affected school district. The annual estimated cost of the bonus is less than $5 million.
3) Pool resources with neighboring communities and businesses ARCH is a regional, cross-jurisdictional housing trust fund that includes 13 cities and towns in King County, Wash. Since 1993, ARCH has committed more than $22 million to the creation and maintenance of 2,200 units of affordable housing. ARCH enables housing for low and moderate-income households, for rental and homeownership. Each jurisdiction contributes; a Parity Program sets contributions by population, projected new housing, and projected new jobs. One-third of contributions come from sources other than general municipal funds, which speaks to the creativity and flexibility of the program. In 1998, a collaborative of public, private and nonprofit organizations created an affordable housing trust fund in Silicon Valley, Calif. By 2006, more than $30 million had been raised – with a near-even balance between private and public sector contributions. Santa Clara County and all 15 of its municipalities, each with different needs, participate. The Trust Fund, operated by the nonprofit Silicon Valley Leadership Group, works to meet these needs: affordable home ownership, or rental, housing for homeless and special needs populations, and senior housing. The Trust Fund is a regional solution, with municipal and employer support regardless of where housing is built.
4) Increase state investment in affordable housing and community planning Illinois needs to invest more state resources to build and preserve affordable housing where it is needed most. States like Florida, California, New York, and Massachusetts invest much more in absolute state dollars and per capita, and dedicate much more of their bond volume cap to affordable housing than Illinois. As a result, they produce much more affordable housing for working families and seniors. Illinois will need to make a similar investment if it expects tomake its Comprehensive Housing Plan the goals in that plan a reality. The Illinois Planning Technical Assistance Act created a fund that, in theory, municipalities can access to offset the costs of comprehensive planning, which includes planning for housing. Increased planning would be beneficial for elected officials and private developers alike, but no money has ever been allocated to the Local Planning Fund. Legislators need to hear from local officials, as well as from private developers, that these funds are needed so that important progress can be made to develop housing and other community needs. Utilizing just one percent of the gross revenues from the Hotel Operator’s Tax would allow communities to access planning funds and begin the planning process.