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HomeMy WebLinkAboutOrdinance 2-O-25, Repeal and Replace Title 5, Chapter 7 - Inclusionary Housing 01/27/2025 2-O-25 AN ORDINANCE Amending Title 5, Chapter 7, “Inclusionary Housing” WHEREAS, new or rehabbed housing in Evanston is generally not affordable to low- and moderate-income households; and WHEREAS, without intervention, this will result in an inadequate supply of affordable housing and will reduce Evanston’s racial and economic diversity; and WHEREAS, the City of Evanston’s first Inclusionary Housing Ordinance went into effect on March 12, 2007 and subsequent ordinances went into effect on January 1, 2016, and January 1, 2019; and WHEREAS, on December 11, 2023, the City Council approved City Council goals specifically including, “[a]mend the Inclusionary Housing Ordinance, increasing the inclusionary requirement in 2024”; and WHEREAS, it is best practice to routinely review and update local inclusionary housing policy to align with market conditions and the policy landscape; WHEREAS, this Ordinance increases the inclusionary requirement from 10% to 15%; and WHEREAS, this Ordinance increases both predictability and flexibility for developers and providers of Inclusionary Housing; and WHEREAS, this Ordinance increases the variety of on-site units to better address Evanston’s housing needs; and Page 1 of 25 WHEREAS, this Ordinance reduces ambiguity and improves program administration, implementation, and efficacy; and WHEREAS, the Evanston City Council finds that it is in the best interest of the City of Evanston to amend the inclusionary housing ordinance. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EVANSTON, COOK COUNTY, ILLINOIS: SECTION 1: Title 5, Chapter 7, “Inclusionary Housing” of the Evanston City Code of 2012, as amended, is hereby further amended and repealed in its entirety as follows: CHAPTER 7 INCLUSIONARY HOUSING 5-7-1. TITLE. This Chapter shall be titled and referred to as the INCLUSIONARY HOUSING ORDINANCE. 5-7-2. PURPOSE AND INTENT. The purpose of this Chapter is to promote the public health, safety, and welfare of the residents of Evanston by requiring residential developments or developments which contain a residential component to include a certain percentage of dwelling units in a proposed development to be priced affordably for low-income, moderate-income, and middle-income households or to make a payment in accordance with the terms of this Chapter. Based upon the review and consideration of reports and analyses of the housing situation in the City, it is apparent that the diversity of the City's housing stock has declined as a result of increasing property values and housing costs, and a reduction in the availability of affordable housing; and that, with the exception of housing subsidized by the City, the privately developed new residential housing that is being built in the City generally is not affordable to low and moderate income households. The City recognizes the need to provide affordable owner occupied and rental housing to low-income, moderate-income, and middle-income households in order to maintain a diverse population, and to provide owner occupied and rental housing for those who live or work in the City. Without intervention, the trend toward increasing housing price s and rental rates will result in an inadequate supply of owner occupied and rental affordable housing units for City residents and local employees, which will have a negative impact upon the ability of local employers to maintain an adequate local work force, and will otherwise be detrimental to the public health, safety, and welfare of the City and its Page 2 of 25 2-O-25 residents. Since the remaining land appropriate for new residential development within the City is limited, it is essential that a reasonable proportion of such land be developed into owner occupied dwelling units and rental units that are affordable to lo w-income, moderate-income, and middle-income households, including working families. 5-7-3. DEFINITIONS. For the purposes of administering this Chapter, these definitions shall apply: AFFORDABILITY PERIOD, OWNER OCCUPIED. The time during which the affordability restrictions imposed by this Chapter shall apply to owner occupied affordable dwelling units. Owner occupied affordable dwelling units covered by this Chapter shall remain affordable in perpetuity or as long as allowable by law. The affordability period begins at the time of first occupancy of the affected unit. AFFORDABILITY PERIOD, RENTAL. The time during which the affordability restrictions imposed by this Chapter shall apply to leased affordable dwelling units. Leased affordable dwelling units covered by this Chapter shall remain affordable for a period of thirty (30) years, after which the requirements of this Chapter cease to be controlling. The affordability period begins at the time of first occupancy of the affected affordable dwelling unit. AFFORDABLE DWELLING UNIT. All owner occupied or leased dwelling units in a covered development as defined herein. AFFORDABLE HOUSING AGREEMENT. The document signed by the purchaser or lessee of an affordable dwelling unit at the time of sale or lease, along with such other legal documents as may be required, detailing the affordability requirements of the affordable dwelling unit. AFFORDABLE HOUSING, OWNER OCCUPIED. Decent, safe, sanitary housing that is: a) affordable to "households that meet AMI parameters" as set forth in this Chapter; and b) to be sold only to "qualified households" as defined herein. The cost of the mortgage payment and relevant expenses (a calculation of property taxes, homeowner's insurance, and, when applicable, condominium or homeowner association fees) of owner occupied dwelling units shall not exceed thirty-one percent (31%) of the household's gross annual household income (the total income of all adults over eighteen (18) years of age in the household). AFFORDABLE HOUSING, RENTAL. Decent, safe, sanitary housing that is: a) affordable to households with AMI parameters set forth in this Chapter; and b) to be leased only to "qualified households" as defined herein. APPLICANT. Any developer who applies to the Department to receive approval of a covered development pursuant to this Chapter. AREA MEDIAN INCOME (AMI). The median income level for the Chicago primary metropolitan statistical area, as established and defined in the annual schedule published by the secretary of the United States Department of Page 3 of 25 2-O-25 Housing and Urban Development and adjusted for household size. CERTIFICATE OF QUALIFICATION. A certificate establishing a qualified household's eligibility to purchase or lease an affordable dwelling unit based on income eligibility using the HUD Part 5 verification process and asset limits, per the City's wait list policies and procedures. COMMUNITY LAND TRUST. A private, not for profit corporation which the City may create or authorize organized exclusively for charitable, cultural, or other purposes to acquire and own land for the benefit of the City and low to middle income persons, including the creation and preservation of affordable housing. CONSUMER PRICE INDEX. Consumer price index for all urban consumers as published annually by the United States Department of Labor, bureau of labor statistics. CONTRACTED AGENCY. An organization with which the City contracts and has a written agreement to manage the centralized wait list for affordable dwelling units and to income certify households for those units. COVERED DEVELOPMENT. A development containing five (5) or more dwelling units on contiguous land under common ownership or control by an applicant at one (1) location within the City, when such dwelling units are to be sold to owner-occupants or leased to tenants. The term "covered development" may apply to a development that is designed to provide primarily affordable dwelling units; Developments that provide primarily affordable units are eligible for the development bonuses and fee waivers/deferrals for up to ten percent (10%) of the on-site affordable units, but are not eligible for bonuses on affordable units beyond the ten percent (10%). However, primarily affordable housing developments are eligible for the same parking reductions as covered developments. The term "covered development" includes, without limitation, the following: (A) A development that is new residential construction or new mixed use construction with a residential component. (B) A development that is the renovation, repurposing or reconstruction of an existing multiple-family residential structure that changes the use from rental to owner occupied units or vice versa, or that changes the number of bedrooms in dwelling units without a change in tenure. (C) A development that will change the use of an existing building from nonresidential to residential. (D) A development built in phases. DEPARTMENT. The Evanston Community Development Department or any successor agency, unless otherwise indicated. DEVELOPER. Any person, firm, corporation, partnership, limited liability company, association, joint venture, or any entity or combination Page 4 of 25 2-O-25 of entities that develops dwelling units, but does not include any governmental entity. DIRECTOR. The Director of the City of Evanston Community Development Department or his/her designee. HOUSING PROVIDER. A nonprofit entity designated by the City to own affordable dwelling units. INCLUSIONARY HOUSING PLAN. The plan submitted as part of a development application which details the development's compliance with the affordable housing requirements of this Chapter. LOW INCOME HOUSEHOLD. A household with a total income equal to or below fifty percent (50%) of the AMI. MARKET RATE DWELLING UNITS. All owner occupied or rental dwelling units in a covered development that are not affordable dwelling units as defined herein. MIDDLE INCOME HOUSEHOLD. A household with a total income above eighty percent (80%) of the AMI but not exceeding one hundred twenty percent (120%) of the AMI. MODERATE INCOME HOUSEHOLD. A household with a total income above fifty percent (50%) of the AMI but not exceeding eighty percent (80%) of the AMI. PRIMARILY AFFORDABLE HOUSING DEVELOPMENT. A residential multi-family building that may have the physical characteristics of a covered development, but will have affordability restrictions that exceed the requirements of this ordinance. This may include a development in which all of the units are restricted to households earning at or below the median income. PROPERTY, RECEIVING PUBLIC FUNDING. Any residential development or development containing a residential component, existing or new, that receives or has received any public funds. Public funding is any grant, loan, or subsidy from any Federal, State or local agency or instrumentality, including, but not limited to, the disposition of real property for less than market value, purchase money financing, construction financing, permanent financing, the utilization of bond proceeds and allocations of low income housing tax credits. Public funding shall not include the receipt of rent subsidies pursuant to Section 8 of the United States Housing Act of 1937, as amended, or an exemption or abatement of real property taxes or other such other programs of full or partial exemption from or abatement of real property taxation. PROPERTY, PRIVATELY FUNDED. Any residential development or development containing a residential component, current or new, that does not and has not received any public funds. QUALIFIED HOUSEHOLD. A household whose income has been verified as meeting the AMI parameters for a household as detailed in this Chapter and has received a certificate of qualification from the City's contracted agency per Section 5-7-6 of this Chapter. Page 5 of 25 2-O-25 TRANSIT ORIENTED DEVELOPMENT or TOD. A development pattern created around a transit station that is characterized by higher density, mixed uses, pedestrian environment, reduced parking, and a direct and convenient access to the transit station. TOD AREA. The area that has the designation for an identified transit station and the area around it. The area provides for development that is compatible with and supportive of public transit and a pedestrian- oriented environment. TRANSIT STATION. The area including the platform which supports transit usage and that is owned and/or operated by the transit agency. 5-7-4. REQUIREMENTS. (A) General Requirement: For privately funded developments, ten percent (10%) of the total number of dwelling units in a covered development shall be affordable dwelling units. For properties receiving public funds, twenty percent (20%) of the total number of dwelling units in a covered development shall be affordable dwelling units. (B) Calculation: To calculate the number of affordable dwelling units required in a covered development, the total number of proposed dwelling units shall be multiplied by ten or if applicable, twenty percent (10%/20%). When a requirement of this Chapter results in a fraction, the following rules apply: 1.Fractions of one-half (½) and more are counted as a whole. 2.Fractions less than one-half (½) are disregarded in the onsite unit calculation but apply to the fee-in-lieu calculation. 3.The above two (2) rules are also applied in the computation of fees-in-lieu with any fraction of a unit less than one-half (½) calculated at half the per unit fee in lieu. (C) TOD Areas: A TOD area may or may not be divided into zones of varying development intensity, as described in this Section. Central Street, downtown, Chicago Avenue, etc. The initial boundaries and zones of each TOD area are described in Appendix A. 5-7-5. COMPLIANCE PROCEDURES. (A) Application. The applicant for approval of a covered development shall file an application for approval of the affordable dwelling unit component of the development on a form provided by the Community Development Department and submit it with the application for approval of the development. The application for development shall not be considered complete without the information required by this Chapter for the affordable dwelling unit component. The application shall require, and the applicant shall provide, among other things, general information about the nature and scope of the covered development, as well as other documents and information as this Chapter and the Department may require. The Page 6 of 25 2-O-25 application shall include the inclusionary housing plan referred to under Subsection (B) of this Section. (B) Inclusionary Housing Plan. The applicant shall submit an inclusionary housing plan on or before time of submission of a building permit that outlines and specifies the covered development's compliance with each of the applicable requirements of this Chapter. The inclusionary housing plan shall specifically contain, as a minimum, the following information regarding the covered development: 1.A general description of the covered development. 2.The total number of market rate dwelling units and affordable dwelling units in the covered development. 3.The number of bedrooms in each market rate dwelling unit and each affordable dwelling unit. 4.The square footage of each market rate dwelling unit and each affordable dwelling unit. 5.The general location of each affordable dwelling unit within the covered development. 6.The pricing schedule for each affordable dwelling unit and each market rate dwelling unit. 7.The phasing and construction schedule for each market rate dwelling unit and each affordable dwelling unit. 8.Documentation and plans regarding the exterior and interior appearances, materials, and finishes of the covered development and each of its dwelling units. 9.A description of the marketing plan that the applicant proposes to utilize and implement to promote the sale of the affordable dwelling units within the covered development. 10.Any proposal to make a cash payment, per Section 5-7-8 of this Chapter, or alternative equivalent action, per Section 5-7-9 of this Chapter, in lieu of providing affordable dwelling units. 5-7-6. ELIGIBILITY AND PREFERENCE OF HOUSEHOLDS FOR AFFORDABLE DWELLING UNITS. (A) Certificate of Qualification. The contracted agency shall issue a certificate of qualification to any household whose income has been verified as meeting the AMI threshold requirements for a "relevant household" as set forth in this Chapter. (B) Eligibility. 1.The affordable dwelling units within a covered development which are for-sale shall be sold only to owner-occupant qualified households whose primary residence shall be said affordable dwelling unit. Page 7 of 25 2-O-25 a.All affordable units must be sold to households whose incomes do not exceed one hundred percent (100%) AMI adjusted for household size. 2.The affordable dwelling units within a covered development for rent shall be leased only to tenants with qualified households whose primary residence shall be said affordable dwelling unit. For covered developments all affordable units must be leased to households whose incomes do not exceed sixty percent (60%) AMI adjusted for household size. (C) Preference. Priority for affordable dwelling units will be given first to qualified households who currently live in Evanston, or who have lived in Evanston with a member of a household currently living in Evanston, or to households in which the head of the household or the spouse or domestic partner works in Evanston. (D) Waiting List. A waiting list will be created, developed, and managed by a third party contractor, in advance of the construction of the units to prioritize households pursuant to Section 5-7-6(C). Households may complete a preliminary income screening based on self-reported income to be placed on a waiting list for rental and ownership units. The waiting list will be prioritized with current Evanstonresidents or with individuals who have lived in Evanston with a member of a household currently living in Evanston, or to households in which the head of the household or the spouse or domestic partner works in Evanston. The contracted agency shall refer certified households drawn from the waiting list to developers of covered developments for rental or ownership units throughout the affordability period of the development according to the "Inclusionary Housing Policies and Procedures for Rental and Ownership Affordable Dwelling Units." 5-7-7. DISTRIBUTION AND ATTRIBUTES OF ON-SITE AFFORDABLE DWELLING UNITS. (A) Location of Affordable Dwelling Units. Affordable dwelling units shall be dispersed among the market rate dwelling units throughout the covered development. (B) Phasing of Construction. In a multiphase d development, all phases shall include a proportion of affordable dwelling units throughout the covered development. The affordable dwelling units shall never be the last units to be built in any covered development. (C) Exterior Appearance. The exterior appearance of the affordable dwelling units in any covered development shall be visually compatible with the market rate dwelling units in the covered development. External building materials and finishes shall be substantially the same in type and quality for affordable dwelling units as for market rate dwelling units. (D) Interior Appearance and Finishes. Affordable dwelling units may have different interior appearance and finishes than market rate units, but the interior finish materials shall be contractor grade or higher. Page 8 of 25 2-O-25 (E) Mix of Bedroom Types of Affordable Units. The bedroom mix of affordable dwelling units shall be in equal proportion to the bedroom mix of the market rate dwelling units within the covered development. If the bedroom mix creates more options than the number of affordable dwelling units to be built , the affordable dwelling units shall be built with the greater number of bedrooms; e.g., if the bedroom mix provides for four (4) options: efficiency, one (1) bedroom, two (2) bedroom, or three (3) bedroom; but only three (3) affordable dwelling units are to be built, then a one bedroom, a two (2) bedroom, and a three (3) bedroom unit shall be built. (F) Reserved. (G) Unit Characteristics. Affordable dwelling units shall be indiscernible from market rate dwelling units from the exterior and common areas and shall be equal to or larger in size than the minimum requirements in the building code in effect at the time of project approval. (H) Energy Efficiency. Standard components related to energy efficiency, including, but not limited to, mechanical equipment and plumbing, insulation, windows, and heating and cooling systems, shall be the same in market rate dwelling units and affordable dwelling units. Page 9 of 25 2-O-25 5-7-8. CASH PAYMENT IN LIEU OF PROVIDING AFFORDABLE DWELLING UNITS. In a covered development that is as of right, an applicant may pay a fee in lieu of building each affordable dwelling unit required by Section 5-7-4 of this Chapter for the covered development. Developments that receive variances or allowances above the base zoning must have a minimum of five percent (5%) affordable units onsite and may pay a fee in lieu of the remaining five percent (5%) of affordable units at the per unit rate below. Condominium developments only may choose to pay a fee in lieu of building each affordable dwelling unit required by Section 5-7-4 of this Chapter at the per-unit rate shown below: (A) The fee in lieu amount per affordable dwelling unit shall be either one hundred seventy-five thousand dollars ($175,000.00) for units in all Downtown and Research Park zoning districts or one hundred fifty thousand ($150,000.00) per affordable dwelling unit in all other zoning districts. For condominium developments only that elect to pay the fee in lieu of all onsite units, the fee in lieu per affordable dwelling unit shall be one and one-half (1.5) times the fee in lieu shown above for either Downtown or non-Downtown zoning districts. The fee in lieu will be adjusted annually based on the Consumer Price Index. (B) All cash payments received pursuant to this Chapter shall be deposited directly into the affordable housing fund. (C) Unless otherwise preempted by law, any fee in lieu shall be paid at the same time as building permits. (D) The in-lieu fee will be calculated at the time the applicant submits an application for a building permit to the Community Development Department. The fee, as calculated, will be valid for two (2) years following the date it is calculated by the Community Development Department and cannot be reduced within the two-year period for reduction in number of units. 5-7-9. ALTERNATIVE EQUIVALENT PROPOSAL. An applicant may propose to meet the requirements of Section 5-7-4 of this Chapter byan alternative equivalent action, subject to the review and approval by the City Council. A proposal for an alternative equivalent action may include, but is not limited to, the construction of affordable dwelling units on another site in the same neighborhood or a comparably zoned neighborhood, or acquisition and enforcement of affordability restrictions on existing market rate dwelling units so as to render them affordable dwelling units, or fewer on-site affordable units at prices affordable to households at lower income levels, such as thirty percent (30%) AMI, or more affordable units at higher income levels such as eighty percent (80%) AMI. The income levels for affordable units must be a level for which the Illinois Housing Development Authority publishes annual rent and income limits. To qualify as affordable units, rental units shall not exceed eighty percent (80%) AMI and ownership units shall not exceed one hundred percent (100%) AMI, both adjusted for household size. Any proposal shall show how the alternative proposed will increase affordable housing opportunities in the City to an equal or greater extent than compliance with the express requirements of this Chapter. Such proposals for alternatives shall be considered on a case by case basis by the City Council and may be approved at the City Council's sole discretion, if the City Council determines that such alternative will increase affordable housing Page 10 of 25 2-O-25 opportunities in the City to an equal or greater extent than compliance with the express requirements of this Chapter. 5-7-10. RESERVED. Editor's note(s)—Ord. No. 107-O-18, § 1, adopted October 29, 2018, repealed the former Section 5-7-10 in its entirety, which pertained to the reduction or waiver of requirements, and derived from Ord. No. 32-O-07; Ord. No. 8-O-12, (48-O-11(exh. B, § 5-7-10)), adopted January 23, 2012, and Ord. No. 60-O-15, § 2, adopted November 23, 2015. 5-7-11. AFFORDABILITY CONTROLS. (A) Initial Sale Prices For Affordable Owner Occupied Dwelling Units. 1. Every affordable owner occupied dwelling unit required to be established under this Chapter shall be offered for sale or to a good faith purchaser to be used for his or her own primary residence. 2. The affordability period with affordable owner occupied dwelling units shall be for ninety-nine (99) years, renewable at each subsequent sale. 3. In calculating the sales prices of affordable dwelling units, the following relationship between unit size and household size shall be used to determine the income figure at which affordable housing payments are calculated: Unit Size Income Level For Household Size Efficiency 1 Person 1 Bedroom 2 Persons 2 Bedrooms 3 Persons 3 Bedrooms 4 Persons 4 Bedrooms 5 Persons 4.Prices for the sale units shall be calculated on the basis of: a.Housing payments at or below thirty-one percent (31%) of the household income for a household at the designated income eligibility level (eighty percent (80%), one hundred percent (100%) or one hundred twenty percent (120%) of AMI) at the household size corresponding to the size of the unit; b.An available fixed rate thirty (30) year mortgage, consistent with the average rate published from time to time by Freddie Mac; c.A down payment of no more than five percent (5%) of the purchase price; d.A calculation of property taxes; e.A calculation of homeowner's insurance; Page 11 of 25 2-O-25 f. A calculation of condominium or homeowner association fees; and g.A calculation of private mortgage insurance, if applicable. (B) Rental Rates for Affordable Dwelling Units. 1.One hundred percent (100%) of the affordable dwelling units within covered developments shall have affordable rental rates at sixty percent (60%) AMI according to their Affordable Housing Agreement, that shall not exceed the annual gross rental rate schedule published by the Illinois Housing Development Authority, less any tenant-paid utilities based on the City's wait list policies and procedures. 2.If the most recent edition of the Illinois Housing Development Authority report indicates a lower AMI than the previous edition, the maximum allowable rent shall be adjusted accordingly. 3.The affordability period of an affected leased unit begins at the time of the first occupancy of an affordable unit in the covered development and continues for thirty (30) years, after which the affordability requirements of this Chapter cease to control the unit. 4.A written twelve (12) month lease is required for all leased affordable dwelling units. Renewal leases may be less than twelve (12) months based on mutual agreement between the landlord and tenant. Final lease agreements are the responsibility of the landlord and the prospective tenant. Tenants are responsible for application fees, security deposits and the full amount of the rent as stated on the lease. All lease provisions shall comply with applicable laws and regulations. The landlord shall maintain copies of all leases entered into with a certified household (including an income certification) and distribute a copy to the City upon request. (C) Procedure For Initial Sale or Lease to the General Public. 1.Sixty (60) days prior to offering any affordable dwelling unit for sale or rent, the applicant shall notify the Department in writing of such offering. The notice shall set forth the number, size, price, and location of affordable dwelling units offered, and shall provide a description of each dwelling unit's finishes and availability. The notice shall also include a copy of the inclusionary housing plan, and any such additional information the Director may reasonably require in order to establish compliance with this Chapter. 2.The prospective purchaser or lessee from the centralized wait list shall make application for a "certificate of qualification" on a form provided by the contracted agency. If the contracted agency determines an applicant is qualified pursuant to the requirements of this Chapter to purchase or lease an affordable dwelling unit, he/she shall issue a "certificate of qualification" to that applicant. An applicant must provide documents to verify that their household satisfies these requirements, including an affidavit that the affordable dwelling unit will be his or her primary residence and evidence of income, household size, and residency or employment in Evanston. The contracted agency shall determine whether or not the prospective purchaser or lessee satisfies the requirements of this Chapter within ten (10) business days after receiving the completed application. The developer shall, upon request by the Director, furnish documentation to the City to demonstrate compliance with thisSection (C). Page 12 of 25 2-O-25 3.The developer shall not sell or lease any affordable dwelling units without a valid certificate of qualification from the contracted agency for the prospective purchaser/lessee. (D) Agreement to Ensure Compliance During the Affordability Period. Prior to issuance of a building permit for any covered development or conveyance of title of any dwelling unit in any covered development, the applicant shall have entered into an agreement with the City regarding the specific requirements and restrictions imposed by the City Council upon the approved development. The applicant shall agree to execute any and all documents deemed necessary by the City, including, without limitation, deed restrictions, restrictive covenants, and other related instruments, to ensure the continued affordability of the affordable dwelling units in accordance with this Chapter. The agreement shall set forth the commitments and obligations of the City and the applicant, and shall incorporate, among other documents, the inclusionary housing plan. If applicable, the agreement shall also detail the fee in lieu or alternative equivalent action of providing on- site affordable dwelling units as set forth in Sections 5-7-8 and 5-7-9 of this Chapter respectively. (E) Rental Compliance. The developer, or its designee, shall submit an annual compliance report describing each affordable unit in detail including but not limited to changes in tenancy, turnovers, and income certifications for all new tenants upon request of the Director. The contracted agency shall complete annual re-certifications of tenants renting affordable units according to the "Inclusionary Housing Policies and Procedures for Rental and Ownership Affordable Dwelling Units." (F) Control of Resale Prices. The maximum sales price, with the exception of foreclosure sales, permitted on resale of an affordable dwelling unit shall be based on the following formula: 1.The original purchase price plus: a.An inflation adjustment of the original purchase price calculated in accordance with the CPI, using the year of the prior sale as the base year, and capped in order to maintain affordability to a buyer at the same income level; b.Allowances for closing costs and sales commissions paid by the seller; and c.The fair market value of approved improvements made to the unit between the date of original sale and the date of resale, up to an average of five thousand dollars ($5,000.00) per year, capped in order to maintain affordability to a buyer at the same income level. "Approved improvements" are capital improvements which add value to the home, prolong its useful life or adapt it to new uses. Repairs to maintain the home in good condition are not allowable capital improvements. A list of general allowable capital improvements shall be included in the affordability documents signed by the purchaser. (G) First Sale After Affordability Period Ends. 1.This Subsection (G) shall apply in the event an affordability period in perpetuity is unlawful or becomes unlawful. Upon the first sale of an affordable dwelling unit after the affordability period ends, the seller shall pay to the City out of the sale proceeds a percentage of the difference between the actual sales price and the current affordable resale price shown in the table below. Such sums shall be deposited into Page 13 of 25 2-O-25 the affordable housing fund. The percentage is based upon the number of years the seller owned and occupied the unit, as follows: Years of Ownership Share to Affordable Housing Fund 10+ Years 50 Percent 6 to 10 Years 60 Percent 1 to 5 Years 70 Percent 2.The Director shall determine whether the price and terms of a resale covered by the preceding paragraph meet the requirements of this Chapter. Upon a finding of compliance, the Director shall terminate the affordable housing controls and execute a recordable release of all applicable mortgages and restrictions. 5-7-12. COMMUNITY LAND TRUST. The City may create or authorize a community land trust to effectuate the purposes of this Chapter. Any established or designated land trusts must be staffed by paid employees and be sufficiently operational, subject to the discretion of the City. 5-7-13. INCENTIVES FOR APPLICANTS. For any covered development project that complies with the requirements of this Chapter, the City shall follow the procedures described below and provide the described incentives: (A) Expedited Application Process: All applications shall be processed by all City departments before other residential land use applications regardless of the original submittal date. (B) Fee Deferral: All City required fees related to the covered development for plan review and building permits for the non-affordable dwelling units and a proportionalshare of the common areas associated with those units, which are not subject to a fee waiver per Subsection 5-7-13(C), shall be deferred for payment until the issuance of the first temporary certificate of occupancy for a non-affordable dwelling unit. The project applicant shall not receive a fee deferral from payment for any other City fees associated with the covered development, including but not limited to right- of-way fees, demolition fees, and fees related to the commercial portion(s) of the development. (C) Fee Waiver: All projects with a covered development which must comply with the requirements of this Inclusionary Housing Ordinance shall be exempt from plan review and building permit fees for the affordable units and a proportional share of the common areas associated with those units. Whenever a project includes a combination of affordable and market rate housing units, fees shall be pro-rated appropriately as determined by the Director and no fees associated with the commercial portion shall be deferred, if applicable. The project applicant shall not receive a waiver from payment of any other fees associated with the covered development, including but not limited to right-of-way fees, demolition fees, or fees related to the commercial portion(s) of the covered development. Page 14 of 25 2-O-25 (D) Bonuses: Density, height, and FAR (floor area ratio) requirements provided in Title 6 are hereby amended for covered developments that provide on -site affordable units, the development is entitled to the following bonuses: 5% On-Site Affordable Housing or 10% On-Site Housing with Public Financing Downtown (D & RP Districts) Commercial (B, C, M, & O Districts) Residential (R, T, & U Districts) Density +2 per Inclusionary Dwelling Unit +1 per Inclusionary Dwelling Unit +1 per Inclusionary Dwelling Unit FAR +2.0 +1.0 — Parking No parking for Inclusionary Dwelling Unit No parking for Inclusionary Dwelling Unit No parking for Inclusionary Dwelling Unit Height — — +12' (not eligible for Planned Developments) Building Lot Coverage and Impervious Surface Coverage — — +15% 10% On-Site Affordable Housing or 20% On-Site Housing with Public Financing Downtown (D & RP Districts) Commercial (B, C, M, & O Districts) Residential (R, T, & U Districts) Density +4 per Inclusionary Dwelling Unit +2 per Inclusionary Dwelling Unit +2 per Inclusionary Dwelling Unit FAR +2.0 +1.0 — Parking No parking for Inclusionary Dwelling Units No parking for Inclusionary Dwelling Units No parking for Inclusionary Dwelling Units Height — — +12' (not eligible for Planned Developments) Building Lot Coverage & Impervious Surface Coverage — — +15% Site Development Allowances for Planned Developments Majority vote of City Council required to exceed maximum Site Development Allowances for Planned Developments (instead of Supermajority vote) Page 15 of 25 2-O-25 (D) Parking: Parking requirements provided in Title 6 are hereby amended for covered developments and primarily affordable non-covered developments in non-TOD areas that provide on-site affordable units, the parking requirements for the entire development provided in Title 6, Zoning Code, shall be reduced to: Parking Requirements In TOD Areas Outside TOD Area 0-1 Bedroom 0.55 parking spaces 0.75 parking spaces 2 Bedrooms 1.1 parking spaces 1.25 parking spaces 3+ Bedrooms 1.65 parking spaces 1.5 parking spaces 5-7-14. ENFORCEMENT. (A) The provisions of this Chapter shall apply to all agents, successors and assignees of an applicant. (B) The City may institute injunction, mandamus, or any other appropriate legal actions or proceedings for the enforcement of this Chapter. In addition, any person, firm, or entity, whether as principal, agent, employee or otherwise, who violates, disobeys, omits, neglects, or refuses to comply with or resists the enforcement of any of the provisions of this Chapter shall be fined not less than two hundred dollars ($200.00) nor more than five hundred dollars ($500.00) for each offense. Each day such violation or failure to comply is permitted to exist after notification thereof shall constitute a separate offense. 5-7-15. ADMINISTRATION. In order to ensure compliance with the provisions of this Chapter, the City may utilize a maximum of fifteen percent (15%) each year of funds from the affordable housing fund for administration. 5-7-16. SEVERABILITY. The provisions and sections of this Chapter shall be deemed separable, and the invalidity of any portion of this Chapter shall not affect the validity of the remainder. SECTION 2: Title 5, Chapter 7, “Inclusionary Housing” of the Evanston City Code of 2012, as amended, is hereby further amended and replaced as follows: CHAPTER 7 INCLUSIONARY HOUSING 5-7-1. TITLE. This Chapter is titled and referred to as the INCLUSIONARY HOUSING ORDINANCE. 5-7-2. PURPOSE AND INTENT. This Chapter aims to increase housing choice for low- and moderate-income households in Evanston by requiring covered developments to provide Inclusionary Housing units, i.e. affordable to low- and moderate-income households. Except for housing subsidized by the City and/or other public entities, new or rehabbed housing in Evanston is generally not affordable to low- and moderate-income households. Page 16 of 25 2-O-25 The City recognizes that, without intervention, this will result in an inadequate supply of attainable housing and will reduce Evanston’s racial and economic diversity. Since there is limited land for new residential development, a reasonable proportion should be developed into for-sale and rental units affordable to low- and moderate-income households. The Inclusionary Housing Ordinance is not the only way the City seeks to address housing needs in Evanston; it is one of many tools in the City’s toolkit to minimize displacement and preserve and increase the supply of housing affordable to low - and moderate-income households. 5-7-3. DEFINITIONS. To administer this Chapter, these definitions will apply: APPLICANT. Any person, firm, corporation, partnership, limited liability company, association, joint venture, or any entity or combination of entities whose application to the Department includes a covered development according to this Chapter. APPROVED COMMUNITY LAND TRUST. A private, non-profit corporation that the City will create or authorize to acquire and own land for the benefit of the City and low- and moderate-income households. AREA MEDIAN INCOME (AMI). The median income level for the Chicago-Joliet-Naperville, IL HUD Metro FMR Area, adjusted for household size, as established annually by the U.S. Department of Housing and Urban Development. CONTRACTED AGENCY. An organization with which the City contracts and has a written agreement to manage components of this Chapter that may include, but are not limited to, the centralized wait list and/or tenant annual income certification. COVERED DEVELOPMENT. A development or concurrent developments containing seven (7) or more covered units under common ownership or control by an applicant. COVERED UNIT. Any dwelling unit including, but not limited to, an accessory dwelling unit, live/work unit, and age-restricted unit, that is either: 1. A new dwelling unit in a newly constructed development or a new dwelling unit in an existing development 2. A dwelling unit in an existing development that has increased or decreased in size and/or number of bedrooms. 3. A dwelling unit in an existing development where the development has changed tenure (from rental to for-sale or for-sale to rental) DEPARTMENT. The City of Evanston Community Development Department or any successor agency. INCLUSIONARY HOUSING PROVIDER Any person, firm, corporation, partnership, limited liability company, association, joint venture, or any entity or combination of entities that owns a covered development with Inclusionary Housing rental units. Page 17 of 25 2-O-25 INCLUSIONARY HOUSING UNIT. A for-sale or rental dwelling unit in a covered development that is affordable to income-qualified households and sold or rented only to income-certified households. INCOME CERTIFIED HOUSEHOLD. A household that meets the eligibility criteria to rent or purchase a specific Inclusionary Housing unit, as stipulated by the Policies and Procedures. MAJORITY AFFORDABLE DEVELOPMENT. A covered development where greater than fifty percent (50%) of all covered units are affordable according to the requirements of this Chapter. MARKET-RATE UNIT. A dwelling unit in a covered development that is not an Inclusionary Housing unit. POLICIES AND PROCEDURES. A document(s), authorized by the City Manager or their designee, that provides additional detail to effectively implement, administer and enforce this ordinance. PUBLICLY- FUNDED. Any covered development, that receives or has received any grant, loan, or subsidy from any Federal, State, or local agency or instrumentality, including, but not limited to, the sale of property below market value, purchase money financing, construction financing, permanent financing, or Low-Income Housing Tax Credit allocations or bond proceeds. Public funding does not include a loan from a government -sponsored enterprise (i.e. Fannie Mae, Freddie Mac), a Housing Choice Voucher rent subsidy, or a property tax exemption or abatement. 5-7-4. REQUIREMENTS – GENERAL. A.General Requirement: A covered development, containing a minimum of seven (7) covered units is required to meet its Inclusionary Housing Requirement. B.7-14 Covered Units. The following are the Inclusionary Housing Requirements for covered developments with less than 15 covered units, with a weighted average of maximum gross rents at or below sixty percent (60%) AMI: a.7-9 covered units: One (1.0) Inclusionary Housing Requirement b.10-13 covered units: One point five (1.5) Inclusionary Housing Requirement c.14 covered units: Two (2.0) Inclusionary Housing Requirement C.15+ Covered Units. Fifteen percent (15%) of covered units in a covered development of fifteen (15) or more covered units are required to be Inclusionary Housing units with a weighted average of maximum gross rents at or below 60% AMI. The resulting number of units, without rounding, will be the covered development’s Inclusionary Housing Requirement. D.Publicly-Funded Developments. The Inclusionary Housing Requirement for a publicly- funded development is twice (2 times) the requirement in 5-7-4 B or C. Page 18 of 25 2-O-25 E. Meeting the Inclusionary Housing Requirement. One hundred percent (100%) of the Inclusionary Housing Requirement must be provided by the applicant. There are three ways to do so: a.Option A: Provide the Inclusionary Housing Requirement on-site, rounded up to the nearest whole number. b.Option B: Provide a portion of the Inclusionary Housing Requirement on-site and pay the remaining portion of the requirement as an in-lieu fee to the Affordable Housing Fund. c.Option C: Pay 100% of the Inclusionary Housing Requirement as an in-lieu fee to the Affordable Housing Fund. 5-7-5. REQUIREMENTS – APPROVED OPTIONS. To increase flexibility for applicants and to incentivize providing units with more bedrooms and units affordable to lower-income households, the Inclusionary Housing Requirement can be met using the following approved options. An applicant may both decrease the weighted average and increase the number of bedrooms to satisfy the Inclusionary Housing Requirement. Any remaining portion of the Inclusionary Housing Requirement must be paid at the full rate, as calculated in 5-7-4 B, C or D. A.Lower-Income Households. a.Rental Units: Maximum gross rent tiers will not exceed eighty percent (80%) AMI and must be a multiple of 10% AMI. Applicants must select from one of the following options: . 60% AMI: Fifteen percent (15%) of covered units at a weighted average rent at or below 60% AMI ii. 50% AMI: Twelve percent (12%) of covered units at a weighted average rent at or below 50% AMI iii. 40% AMI: Ten percent (10%) of covered units at a weighted average rent at or below 40% AMI b.For-Sale Units: Sales price will not exceed the maximum price as stipulated by the Policies and Procedures. Applicants must select from one of the following options: . 100% AMI: Fifteen percent (15%) of covered units at a sales price affordable to households at or below 100% AMI ii. 80% AMI: Twelve percent (12%) of covered units at a sales price affordable to households at or below 80% AMI B.More Bedrooms. a.One-Bedroom = One and a quarter (1.25) Studio b.Two-Bedroom = Two (2) Studios or One and a half (1.5) One-Bedrooms c.Three Bedroom = Two and three quarters (2.75) Studios, Two and a quarter (2.25) One-Bedrooms, or One and three quarters (1.75) Two-Bedrooms d.Four-Bedroom = Three and three quarters (3.75) Studios, Three (3) One Bedrooms, Two and a quarter (2.25) Two-Bedrooms, or One and a half (1.5) Three-Bedrooms 5-7-6. REQUIREMENTS – IN-LIEU FEE. Page 19 of 25 2-O-25 If selecting Option B or Option C to fulfill the Inclusionary Housing Requirement, per Section 5-7-4 E, the covered development’s in-lieu fee must be calculated. In the case of Option B, the unrounded remaining Inclusionary Housing Requirement, or in the case of Option C, the full, unrounded Inclusionary Housing Requirement is converted into a unit mix, as specified in Section 5-7-7 and as stipulated by the Polices and Procedures. A. Calculation. a. In-lieu fees are as follows and are adjusted annually based on the Consumer Price Index, per the Policies and Procedures: Studio 1 BR 2 BR 3 BR 4 BR $405,000 $481,000 $711,000 $1,070,000 $1,429,000 b.If a fractional unit is required, the corresponding calculation uses the in-lieu fee for the most prevalent number of bedrooms. If the most prevalent is shared between multiple unit types, the unit type with the most bedrooms is used. c.In-lieu fees are calculated by the Department as part of the Inclusionary Housing Plan and building permit application process. In-lieu fees may be estimated by the Department separate from the above but are only estimates and subject to change. B.Payment. In-lieu fees are paid by the applicant as part of the permit application process and before being granted a building permit. 5-7-7. REQUIREMENTS – UNIT ATTRIBUTES AND DISTRIBUTION. A.Unit Size. a.Number of Bedrooms. The unit mix of Inclusionary Housing units will be in equal proportion to the overall unit mix of covered units within the covered development, as stipulated by the Policies and Procedures. b.Area. Inclusionary Housing units will be equal to or larger than the smallest covered, market-rate units with the equivalent number of bedrooms within the covered development. B.Location. Inclusionary Housing units will be dispersed among the covered, market-rate dwelling units. C.Appearance and Components. a.Exterior. The exterior appearance of Inclusionary Housing units will not differ from the covered, market-rate units in the covered development. b.Interior. Inclusionary Housing units may have different interior appearance and finishes to covered, market-rate units as long as the materials, appliances, and building systems are durable, of good and new quality, and consistent with the current standards for new housing. c.Energy Efficiency. Standard components of Inclusionary Housing units related to energy efficiency, including, but not limited to, mechanical equipment and plumbing, insulation, windows, and heating and cooling systems, will not differ from the covered, market-rate units in the covered development. Page 20 of 25 2-O-25 D. Phased Construction. In a multiphase development, Inclusionary Housing units will be frontloaded in the initial phase(s) or each phase will include an equal proportion of Inclusionary Housing units to covered, market-rate units. 5-7-8. REQUIREMENTS – ALTERNATIVE EQUIVALENT PROPOSAL. A. Alternative Equivalent Proposal. An applicant may propose to meet the Inclusionary Housing Requirement by an alternative equivalent action. A proposal for an alternative equivalent action may include, but is not limited to: a.The construction of Inclusionary Housing units off-site of the covered development b.The acquisition and conversion of existing market-rate dwelling units to Inclusionary Housing units c.The donation of property to the City of Evanston B.A proposal must articulate how the alternative action will increase affordable housing opportunities in the City to an equal or greater extent than the covered development’s Inclusionary Housing Requirement. C.The proposal is subject to: a.An equivalent action analysis by the Department, as stipulated by the Policies and Procedures, resulting in a determination of either “lesser extent / notrecommended” or “equal or greater extent / recommended”. b.An administrative fee, as stipulated by the Policies and Procedures. c.City Council approval. 5-7-9. INCENTIVES. For a compliant covered development that provides on-site Inclusionary Housing units, the City will provide the following incentives: A.Fee Waiver: City-required building permit fees for the Inclusionary Housing units and a proportional share of the common areas will be waived, capped at thirty-five percent (35%) of building permit fees, as stipulated in the Policies and Procedures. No waiver from payment of any other fees will be provided, including but not limited to right-of- way fees, demolition fees, or fees related to the commercial portion(s) of the covered development. B.Fee Deferral: The remaining City-required building permit fees will be deferred forpayment until the application for the first temporary certificate of occupancy for a covered, market-rate unit. No deferral from payment of any other fees will be provided, including but not limited to right-of-way fees, demolition fees, and fees related to the commercial portion(s) of the development. C.Zoning Incentives: Any zoning bonuses for covered developments that provide Inclusionary Housing units on-site are addressed in Title 6 – Zoning. 5-7-10. COMPLIANCE – SUBMISSIONS. Page 21 of 25 2-O-25 A. Inclusionary Housing Application. The applicant will submit an Inclusionary Housing Application, provided by the Department, concurrent with submitting a zoning analysis application. The application is a preliminary proposal of how the applicant will fulfill the requirements of this Chapter. a.The zoning analysis will not be deemed complete until the Department has marked the Inclusionary Housing Application as compliant. b.The Application fee and detailed requirements are stipulated in the Policies and Procedures. B.Inclusionary Housing Plan. The applicant will submit an Inclusionary Housing Plan, provided by the Department, concurrent with submitting a building permit application. The Plan is the applicant’s final commitment to fulfill the requirements of this Chapter. a.The building permit application will not be deemed complete until the Department has approved the Inclusionary Housing Plan. b.The Plan fee and detailed requirements are stipulated in the Policies and Procedures. C. Annual Rental Compliance Report. The Inclusionary Housing provider, or its designee, will submit an annual rental compliance report to the Department or the contracted agency as stipulated in the Policies and Procedures. D. Majority Affordable Development. A majority affordable development will comply with the requirements and will benefit from the incentives of this Chapter unless otherwise stipulated in the Policies and Procedures. 5-7-11. COMPLIANCE – AFFORDABILITY CONTROLS. A.Rental Units. a.Affordability Period. A rental Inclusionary Housing unit is required to comply with this Chapter for thirty (30) years. The affordability period begins when all Inclusionary Housing units at the covered development have had at least one signed lease. b.Income-Certified Household. The Inclusionary Housing provider will only rent an Inclusionary Housing unit to an income-certified household, as stipulated in the Policies and Procedures. B.For-Sale Units a.Affordability Period. A for-sale Inclusionary Housing unit is required to comply with this Chapter in perpetuity or as long as allowable by law. The affordability period begins at the initial sale. b.Availability. A for-sale Inclusionary Housing unit must be made available for sale, as stipulated in the Policies and Procedures, at or before any covered, market-rate units are available for sale. c.Initial Sale. The initial sale of a for-sale Inclusionary Housing unit must be made in one of the following ways: . Directly to an income-certified household, as stipulated in the Policies and Procedures. Any sale directly to an income-certified household Page 22 of 25 2-O-25 requires a nominal lien that would trigger a release upon a subsequent sale. ii. In a double transfer - to an approved community land trust and subsequently to an income-certified household, as stipulated in the Policies and Procedures. d.Maximum Sale Price. The maximum sale price for a for-sale Inclusionary Housing unit will be calculated by the Department based on the characteristics of the unit and current housing costs to ensure affordability to income-certified households, as stipulated in the Policies and Procedures. 5-7-12. HOUSEHOLD ELIGIBILITY. A.Income Certification. The Department or contracted agency will certify households for specific Inclusionary Housing Units, as stipulated in the Policies and Procedures. B.Primary Residence. An Inclusionary Housing unit, both rental and for-sale, must be used by the income-certified household as their primary residence. C.Local Preference. Priority for an Inclusionary Housing unit will be given to income- certified households who are Evanston residents, attend school or work in Evanston, and/or lived in Evanston in the past three (3) years. Additional details are stipulated in the Policies and Procedures. 5-7-13. ENFORCEMENT. A.Noncompliance. a.Any applicant, Inclusionary Housing provider, agent, successor, or assignee who does not comply with the provisions of this Chapter will be fined five hundred dollars ($500) for each offense. b.Each day the violation or failure to comply is not remedied after notification will constitute a separate offense. c.The City Manager or their designee may waive a portion of the fine if substantive progress is being made to remedy the noncompliance. Additional details are stipulated in the Policies and Procedures. B.Fines. Noncompliance fines will be paid into the Affordable Housing Fund. C.Legal Action. The City may institute an injunction, mandamus, or any other appropriate legal actions or proceedings for the enforcement of this Chapter. 5-7-14. ADMINISTRATION. A.Policies and Procedures. a.To effectively implement, administer, and enforce this ordinance, the Department, with the City Manager or their designee’s authorization, will create a document(s), Policies and Procedures, with additional detail, defined protocol, and clear processes. Page 23 of 25 2-O-25 b. When amended, the Policies and Procedures document(s) will be effective thirty (30) days after the City Manager or their designee’s authorization. B. Effective Date and Applicability a. An applicant beginning the zoning analysis process after the effective date of this Chapter is required to comply with the Chapter. b. An applicant beginning the zoning analysis process before the effective date of this Chapter is not required to comply with the Chapter, rather the Chapter effective at that time. c. An applicant that begins the zoning analysis process before the effective date of this Chapter and does not make substantive progress on their application, as stipulated by the Policies and Procedures, must resubmit and therefore is required to comply with the Chapter. C. Data Tracking and Annual Report a. The Department will track key Inclusionary Housing metrics and, on an annual basis, prepare an annual report to be shared with the Housing and Community Development Committee and placed on file. b. The annual report will also include any recommendations, if applicable, for any changes to this Chapter to better achieve the City’s housing goals. SECTION 3: All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 4: If any provision of this Ordinance 2-O-25 or application thereof to any person or circumstance is held unconstitutional or otherwise invalid, such invalidity shall not affect other provisions or applications of this Ordinance that can be given effect without the invalid application or provision, and each invalid application of this Ordinance is severable. SECTION 5: Ordinance 2-O-25 shall be in full force and effect as of April 1, 2025. SECTION 6: The findings and recitals contained herein are declared to be prima facie evidence of the law of the City and shall be received in evidence as provided by the Illinois Compiled Statutes and the courts of the State of Illinois. Page 24 of 25 2-O-25 Introduced: ________January 27, 2025 Adopted: _________February 10, 2025 Approved: __________________________, 2025 _______________________________ Daniel Biss, Mayor Attest: _______________________________ Stephanie Mendoza, City Clerk Approved as to form: ______________________________ Alexandra B, Ruggie, Corporation Counsel Page 25 of 25