One development ordinance does not serve all neighborhoods

July 22, 2016

Source: CRAIN'S Chicago Business

By: JACKY GRIMSHAW

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For a closeup of our changing city, take a trip out to Milwaukee Avenue and look at the construction near the CTA's Blue Line stations. Thanks to Mayor Rahm Emanuel's 2015 "transit-oriented development," or TOD, ordinance, the corridor is gaining more than 700 apartments within a couple of blocks of its transit hubs.

 

The ordinance allows developers to dramatically cut the amount of parking per residential unit and allows more units on the same building footprint. It's an excellent strategy to fill vacant lots, develop underutilized parcels and build CTA ridership.

 

But as community protests have shown, this ordinance can also tip the balance away from affordable housing in gentrifying areas like Logan Square. And it's had little impact so far in communities where development is needed most: on the South and West sides.

 

One extra word—"equitable"—can change that dynamic. To achieve equitable transit-oriented development, we'll need one strategy for areas with a strong real estate market and another for weaker or emerging markets.

 

In the strong-market areas, the city and aldermen should leverage more affordable apartments in each development. The ordinance already provides incentives, but there's room to bargain for more because developers in high-demand areas can make money even when including more affordable apartments.

 

There are very strong markets all around the Loop, along the Blue Line to Fullerton Avenue, and north up the Brown and Red lines. At Wilson on the Red Line, where the CTA is spending $203 million to rebuild the station, one TOD proposal would have 197 units and just 41 parking stalls; a 110-unit development would have just 16 parking spaces.

 

The economics are clear. It costs developers about $4,200 to build one parking space in a surface lot and $37,300 in an underground garage. So TOD construction reduces developer costs and allows more units (profit) in the same space.

 

The trick in strong-market areas is to hang tough for a higher percentage of affordable apartments. Ald. Danny Solis recently blocked a 500-unit proposal in his ward because it didn't meet the 21 percent affordability requirement that he negotiated with the Pilsen Land Use Committee. Ald. Joe Moreno in Logan Square is backing a 100 percent affordable, 88-unit building at 2031 N. Milwaukee, using funds from tax-increment financing and the Chicago Housing Authority.

 

Other aldermen should be just as proactive so that working-class people can remain in a neighborhood and benefit from local jobs or those accessible via transit.

 

It's a tougher challenge in weak-market areas where there has been little housing and retail development. Still, there are opportunities on the South and West sides, especially along the CTA Green Line, which serves 42,000 riders per day.

 

A new Whole Foods and other shops will open in September near the Green Line Halsted stop, across from Kennedy King College. At 35th Street, Chicago police headquarters and the Illinois Tech campus provide anchors for new housing and retail. Luxury housing is being built east of the Cottage Grove Green Line stop, near the University of Chicago in Woodlawn. There are opportunities on the Lake Street branch, too, as booming development in Fulton Market pushes manufacturing and residential activity west.

 

All these areas would benefit from both market rate and affordable housing, plus stores that fill local demand for fresh produce, pharmacies and sit-down restaurants.

 

Building housing and retail near transit stops makes plenty of sense. But if we want a more balanced and stronger Chicago, we need equitable transit-oriented development that adds affordable housing in the hot spots and brings new activity alongside the Green Line.


Jacky Grimshaw is vice president for policy at the Center for Neighborhood Technology. She was a CTA board member from 2009 to 2015.