Earlier this year, the Chicago, Illinois City Council Finance Committee passed a measure that would allocate more money for affordable housing. The measure was approved by a 13-8 vote and now goes before the full Council. Some Council members are concerned that Chicago Mayor Richard Daley’s opposition could cause the bill to stall.
If passed, the measure would allow about $100 million a year to be allocated from specially designated “tax increment finance districts,” and be used to preserve or build affordable housing. As written, the bill requires that 20 percent of the money collected from these areas be set aside. Tax increment finance districts are areas in which the amount of money that can be collected by local governments is frozen at a pre-determined amount. Anything collected above and beyond that amount is used to finance construction projects in the area.
Several cities across the U.S. use TIF money to promote development in areas that are either in decline or simply need to be refurbished. One common concern with TIF districts is that they will become gentrified – meaning middle and upper income people begin moving into the area, forcing lower-income residents out. Communities often work to prevent gentrification by instituting affordable housing requirements in TIF districts.
Both Mayor Daley and the Community Development Department have expressed concern that allocating so much money for affordable housing will interfere with other development goals aimed at creating jobs.
There is no indication yet when the measure will be voted on by the City Council or how quickly the money would be allocated.