Regional Connection Lead Article
Orest Chryniwsky, vice president of Land Development for Pulte Master Builders, found that even "affordable housing-friendly" municipalities have begun to increase minimum lot sizes and restrict multi-family development, now that they believe they have "enough" housing for working families. Greg Paulus, chief financial officer at Tantillo Homes, recently experienced an unanticipated change in a municipality's building code in the middle of a project, resulting in a $4,000 per unit cost increase.
Gail Schechter, executive director of Interfaith Housing of the northern suburbs, operates two low-income multi-family rental properties in Northern Cook County suburbs that pay over one-third of the income from one building and one-half of the income from the second building for property taxes.
Since our founding in 1934, MPC has advocated for decent, safe and affordable housing. Today, we are even more convinced that developers, employers, and municipal leaders must work together to create a range of housing options that will increase access to housing especially in high job growth areas. Despite a 21 percent increase in housing starts from 1990 to 1996, demand for a wider selection of housing choices for modest income families continues to escalate in our region.
In a 1996 survey, MPC investigated this issue from one stakeholder's perspective--that of the housing developer. 178 for-profit and nonprofit developers were asked to identify regulatory and financial barriers to developing suburban housing. A 40 percent response rate from those who are most active in residential development provided insight into why developing housing near jobs can be such a challenge. This survey defines affordability as housing in which monthly costs are approximately $1,000(this means a two-bedroom apartment that rents for less than $1,080 per month or a home that sells for less than $155,200). Many working families struggle to meet these monthly costs.The survey findings build on MPC's publication "Housing for a Competitive Region" (December 1995) that documented the connection between housing policy and prserving our economic competitiveness. The number of jobs in the region is projected to increase by 37% between now and 2020; by forging new alliances, we can ensure that as job growth occurs, the availability of nearby housing for working families also increases. In addition to the regulatory and financial barriers identified in our survey, issues such as excessive use of land use controls, community opposition and changing market demand also impact developers' ability and incentive to build affordable housing.
Among the survey findings:
- Some municipalities in Lake, DuPage and Northwest Cook Counties that are experiencing the most rapid job growth also have the most regulatory barriers to developing housing.
- The top barriers to developing housing for working families in the region are:
- Land Costs
- Impact Fees
- Public Review Procedures
- Minimum Lot Size Requirements
- Other Labor Costs
- Multifamily Development Restrictions
- Fifty-two percent of all respondents said that restrictive building codes unnecessarily raise the cost of development without benefit. Electrical codes, for example, were cited most frequently as raising the costs of development.
- Twenty-five percent of the respondents pointed to lot size/density as a key regulation that prevents them from developing housing for working families.
- Key incentives that encourage building housing near jobs are: reducing minimum lot size and increasing funding availability.
Where do we go from here?
MPC is poised to initiate a series of dialogues among area employers, municipal and state officials, other developers, and civic leaders as a springboard to pursue solutions to the jobs-housing mismatch. What binds all parties together is a shared interest in promoting sensible economic growth for our region.
A call to action
The creation of housing for working families, especially in job-concentrated areas, is a crucial component of the region's continued economic strength. MPC will work on:
- creating a dialog with employers, municipal leaders, and developers to identify the barriers and the incentives needed to expand housing in high employment areas.
- highlighting how some municipal leaders have successfully included housing for working families in their land use development plan and promoting local best practices.
- examining the role of regulatory practices such as permitting processes that may add to the cost of housing.
- working with state officials to explore public and private financial incentives that can assist municipalities with building code reforms and home ownership counseling.
- orging consensus on tax increment financing reforms that preserve housing opportunities for families while addressing cost concerns of municipalities and school districts.
- designing a mechanism for several municipalities to achieve housing and sensible growth goals through adapting comprehensive plans and zoning codes.
Moving from dialog to implementation
The survey findings clearly show that developers face real obstacles in creating housing for working families. Yet, taxpayers, municipal leaders and community groups face other kinds of concerns in promoting balanced growth. Employers in high job growth areas already understand the need to address the mismatch of housing and employment. With the increase in population and the growing need for housing options for working families, leaders in the civic, business, and governmental sectors must join together to develop realistic local strategies that can eventually lead to statewide legislation. MPC will provide leadership in bringing the stake-holders together to assist communities in planning for a range of housing options so that our region can remain competitive in this global economy.
Success Story
MPC believes that expanding housing options for all the region's residents is possible. So does John Barcelona, president of Chestnut Homes. Mr. Barcelona recently completed a 200 unit multi-family project in Joliet. Priced from $93,000 to $117,000, 90 percent of the units went to first-time buyers. The success of the project was dependent on working with a willing municipality and creative, cost effective and attractive design