Developers, builders sue city of Chicago over new affordable housing fees

Development Midwest News
Marshall Field Garden Apartments, a major affordable housing rehab project currently underway in Chicago. (Related Midwest)

A rendering of Marshall Field Garden Apartments, a major affordable housing rehab project currently underway in Chicago. (Related Midwest)

Home builders and developers in Chicago have sued the city to block a tightening of its affordable housing laws, which were recently revamped to encourage more private development of units accessible to low-income residents.

Hoyne Development and the Home Builders Association of Greater Chicago say the longstanding Affordable Requirements Ordinance (ARO) violates the Fifth Amendment because it involves the taking of private property without “just compensation.”

Earlier this year Chicago City Council voted to overhaul of the ARO, which compels private developers to build affordable housing or pay “in-lieu” fees. Those fees were too low, many argued, and resulted mostly in developers paying their way out of having to devote a substantial amount of new housing stock to affordable units. But in their suit the developers argue raising the fees could backfire by making $900 million in planned construction suddenly infeasible. The new ARO fees take effect October 13.

As Brentin Mock writes for CityLab, the outcome of the case could affect similar proceedings in Los Angeles and New York, where so-called inclusionary-zoning plans are in the works.

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