This program, known as the “Affordable Housing Tax Credit,” offers a significant financial benefit to landlords who agree to maintain affordable housing units. The program’s goal is to encourage the preservation of existing affordable housing and incentivize the development of new affordable housing units. It achieves this by providing a tax credit to landlords who meet certain criteria.
Pritzker, would provide a significant boost to the state’s economy, create jobs, and improve the lives of Illinoisans. The program would offer a range of benefits, including:
Womack secured approval in 2023 from Cook County Assessor Fritz Kaegi to add three properties in the Austin neighborhood on the West Side to the program, including 1607 N. Central Ave. a mixed-use building with 31 apartments and four commercial units. Womack pledged to reserve 15% to 35% of the units in the three buildings as affordable, and completed a set of renovations, including new roofing, sidewalks, HVAC systems and plumbing, and interior repairs. In return, the company gets assessment cuts of up to 35%. “It would have been hard to keep all the rents below market, but the property tax relief is worth more than the lost rent,” Womack said.
He argues that preserving affordable housing is a long-term investment that yields significant returns. McDonnell’s argument rests on the idea that preserving affordable housing units helps to maintain a stable and diverse community. He believes that a diverse community is more resilient to economic downturns and social unrest. He further argues that preserving affordable housing units helps to attract and retain talent, which is crucial for economic growth.
Developers of 10 future apartment complexes signed letters of intent to set aside 20% of their units as affordable, added McDonnell. The assessment cuts taper off and end after 30 years. “For that, the city gets 30 years of affordability in these nice, new developments,” he said. The assessor began administering the program in 2022, accepting nearly 600 landlord applications, the majority seeking 35% cuts in the assessed value of their properties. The office approved another 221 in 2023, and 102 through July of this year. The initial burst of properties accepted in the program’s first year was partly due to many landlords switching from an outmoded incentive program called Class 9, McDonnell said.
“New downtown buildings get all the headlines, but for the owners of existing courtyard buildings in neighborhoods on the South and West sides, or in Rogers Park or Albany Park, this program also works for them,” said Stacie Young, president and CEO of Community Investment Corp., a nonprofit lender, especially because it doesn’t impose a lot of rules and regulations. “Creating affordable housing usually means going to the government and getting direct subsidies, and that’s a long, complicated process that takes a bit of sophistication,” she said. “But the assessor’s office doesn’t make you go through 5 feet of paperwork. You just fill out the application, show you are in compliance and get the benefit.”
More than 100 new applications are waiting for approval, said McDonnell, which puts 2024 roughly on pace with 2023. “I feel like the best is yet to come for this program, and it could become a national model,” he said.
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