Even the fanciest luxury buildings could be getting affordable housing.
Developers would get a property tax break for providing affordable housing in their new projects under a proposal from one of the state’s most powerful officials.
Illinois senate president John Cullerton said the plan would give an incentive to developers to maintain affordable housing options in gentrifying neighborhoods, according to Crain’s.
The proposal would freeze property taxes at pre-construction rates for two years on any new project of at least six units that offers rents in at least 20 percent of the units at rates affordable to those making 60 percent of the area’s median income.
The tax break would be reduced 20 percent every two years until hitting zero after 10 years, according to Crain’s.
Cullerton, a Democrat from Chicago’s North Side, said he got the idea from developers including Related Midwest president Curt Bailey, who said his firm had success with a similar “80/20” program in New York.
Chicago officials in recent years put more pressure on developers to provide affordable housing in light of soaring rents and rising property values in hot neighborhoods. Developers have bristled at the requirements, though, saying they make some projects financially impossible.
The real estate industry long has pushed for property tax breaks like the one Cullerton is promoting and other incentives to provide affordable housing, saying they need a “carrot” more than a “stick” in order to address affordability. [Crain’s] — John O’BrienRecommend0 recommendationsPublished in