Rlling Meadws: Preserving Lcal Husing Optins in the Path f Redevelpment Cmmunity Building Initiative Rlling Meadws Task Frce
The Metrplitan Planning Cuncil Rlling Meadws Task Frce Funded in 1934, the Metrplitan Planning Cuncil (MPC) is a nnprfit, nnpartisan grup f business and civic leaders cmmitted t serving the public interest thrugh the prmtin and implementatin f sensible planning and develpment plicies necessary fr an ecnmically cmpetitive Chicag regin. MPC researches and develps plicy recmmendatins and cnducts utreach and advcacy in partnership with public fficials and cmmunity leaders t enhance equity f pprtunity and quality f life thrughut metrplitan Chicag. The Cuncil s wrk in Rlling Meadws is a part f its Cmmunity Building Initiative, which supprts cmmunities thrughut the Chicag regin in determining slutins t lcal develpment challenges, testing and refining plicies and strategies, prviding mdels fr ther cmmunities, and creating a netwrk f reginal partners and cntacts. MPC wuld like t acknwledge its dedicated grup f Rlling Meadws Task Frce members: Chair: Mindy Turbv, Principal, Turbv Assciates Ben Applegate, President, Illinis Husing Cuncil and Partner, Applegate and Thrne-Thmpsn, P.C. Peter Friedman, Gvernment and Husing Law Attrney and Partner, Hlland & Knight LLP Bb Krnecki, Managing Directr and Midwest Market Leader, Bursn-Marsteller s David Hffman, Chairman, Red Seal Develpment Crpratin Juanita Irizzarry, Executive Directr, Latins United Richard Kenig, Executive Directr, Husing Opprtunity Develpment Crpratin Steve Prras, Vice President f Acquisitins and Affrdable Husing, LR Develpment Cmpany Rbin Snyderman, Husing Directr, Metrplitan Planning Cuncil David Walker, AICP, Architect/Planner, RTKL Assciates Charles Buki, czb LLC, als prvided valuable cnsulting services t infrm and supprt the Task Frce deliberatins. Staff supprt prvided by Janna Trtter, Husing Assciate, Metrplitan Planning Cuncil. MPC is als deeply grateful t the fllwing whse supprt made this wrk pssible: Chase, Grand Victria Fundatin, Fannie Mae Fundatin, The Chicag Cmmunity Trust, The Allstate Fundatin, Washingtn Mutual, Bank f America, The Jhn D. and Catherine T. MacArthur Fundatin, and McCrmick Tribune Fundatin. 2
Table f Cntents I. Executive Summary........ 4 II. Issue in Cntext........... 6 a. The Site. 6 b. Lcal Husing and Cmmercial Market...7 c. Redevelpment Prpsals....8 III. Task Frce Recmmendatins...9 a. Preserving Affrdability..... 9 b. Maximizing Optins fr Existing Residents.14 c. Innvative Site Design...17 d. Getting the Message Acrss...19 IV. Appendix Guidelines fr Structuring an Agreement between Centex and Rental Develper...A In-lieu Fee Frmulas.. B Husing Endrsement Criteria....C Inclusinary Husing Ordinance.....D Affrdable Husing Trust Fund.E Cmmunity Land Trust F Inter-gvernmental Emplyer-Assisted Husing Prgram Descriptin......G Unifrm Relcatin Act Guide.. H Messaging Materials I Demlitin Fee Ordinance.J Metrplitan Mayrs Caucus Guidelines fr a Mdel Affrdable Husing Plan.K V. Inserts Husing messaging materials 3
Executive Summary f Charge and Recmmendatins In recent years, the City f Rlling Meadws has intensified effrts t supprt its ecnmic base, and becme ne f the regin s ecnmic leaders. The City has als made it a gal t ensure that the lcal wrkfrce and ther residents in need f affrdably priced hmes cntinue t have ptins within the city. Rlling Meadws recgnizes that ecnmic grwth and wrkfrce husing g hand-in-hand, which many existing and prspective Rlling Meadws cmpanies have crrbrated. City fficials have viced cmmitment t ensuring that at least 20 percent f Rlling Meadw s husing stck is and remains affrdable and, in 2005, engaged the Metrplitan Planning Cuncil t help identify ways t meet this gal. Sn after MPC began cllabrating with the City n strategies t preserve and expand Rlling Meadws wrkfrce husing ptins, the wner f 12 Oaks at Wdfield -- a 692-unit, affrdable rental prperty in Rlling Meadws -- signed a cntract with the natinal hmebuilder Centex Hmes t redevelp the site. As a cnditin f this cntract, the wner was required t vacate the prperty within 90 days f cnsummating the sale, and relcate the 600 families living there. At the City s request, MPC brught tgether 11 experts in the fields f urban planning, real estate develpment, husing finance, plicy, husing advcacy, cmmunicatins, and law t assist them in develping a plan f actin t help address the substantial lss f affrdable hmes in this large-scale redevelpment effrt. The MPC Rlling Meadws Task Frce was charged with recmmending tls that can be used t preserve the affrdable character f Rlling Meadws and serve 12 Oaks current tenants, while als supprting ecnmic and residential develpment n this site and thrughut the city. The grup s tasks included assisting the City with the fllwing: Evaluating the develper s prpsed plans and the seller s relcatin plan. Identifying the apprpriate city rle in respnding t these plans. Explring the ptin f engaging a third party develper t build affrdable hmes n-site. Outlining an ptimal develpment partnership agreement. Wrking with the City t ensure the principals f the Metrplitan Mayrs Caucus Husing Endrsement Criteria are met. Outlining key cmpnents f the relcatin plan. Creating an effective public relatins strategy t cmmunicate the City s rle in and gals fr the redevelpment. Redevelpment f the 12 Oaks at Wdfield prperty is a crucial issue fr the City f Rlling Meadws. The site cmprises apprximately 30 percent f the rental husing stck and eight percent f the verall husing stck in the city. At the same time, land use studies recently cmmissined by Rlling Meadws have shwn that the site, due t its lcatin at the intersectin f three majr highways, can supprt a mre dense mixed-use develpment, which attracted Centex t the prperty. Fr tw days in early Nvember 2005, MPC cnvened its Task Frce, which met with city fficials, the current wner, and the develper t understand each party s gals and cnstraints in this redevelpment effrt. The Task Frce then met privately t generate recmmendatins fr the City. Several f the Task Frce members presented the fllwing plicy ptins t the Rlling Meadws City Cuncil the fllwing week: 4
1) The City can, as part f the Planned Unit Develpment entitlement prcess: Require the develper t d the fllwing: a) price 20 percent f the new hmes at levels affrdable t mderate and lw-incme husehlds; b) rent r sell these affrdable hmes t families, nt just senirs; c) include bth rental and fr-sale hmes in the develpment and; d) encurage the develper t make the majrity f the affrdable hmes rental. Address the lss f existing affrdable hmes thrugh a cntributin r fee in-lieu frm the develper, which can seed a lcal and/r inter-gvernmental husing trust fund and/r a cmmunity land trust t finance and preserve affrdable and wrkfrce husing. Require the current wner t meet federal relcatin guidelines in rder t vacate the prperty, including cntracting with an experienced nnprfit rganizatin t prvide tenant cunseling and supprt, supplementing the wner s current plan, and prviding needed checks and balances. 2) Centex, a natinal hmebuilder, suggested a willingness t wrk with an experienced mixedincme husing develper t create an affrdable rental husing cmpnent n site. The Task Frce suggests the City assist with engaging an apprpriate develper and t leverage financing tls t supprt such an effrt. 3) T advance its brader gals, the City f Rlling Meadws was als advised t implement a number f initiatives that are distinct frm the Planned Unit Develpment prcess fr this site, including: Implement a citywide and/r inter-gvernmental inclusinary husing plicy t incrprate affrdable and wrkfrce husing in all new develpments, and pssibly cndminium cnversins, t address the lss f the affrdably priced hmes in this prperty and create new pprtunities fr wrking families and ther residents in need f husing priced belwmarket. An inclusinary husing plicy will draw additinal private-sectr investment and ingenuity int the creatin f wrkfrce and affrdable husing. Adpt the Metrplitan Mayrs Caucus Husing Endrsement Criteria, clearly articulating the kind f quality husing ptins the City will preserve and expand in the future. Launch a citywide and/r inter-gvernmental Emplyer-Assisted (EAH) Husing initiative t leverage investment frm lcal cmpanies and businesses in wrkfrce husing slutins. The Rlling Meadws Task Frce cncluded that the future develpment f this particular site can meet the City s gal fr mixed-incme husing by including a 20 percent cmpnent n site that is affrdable t current residents and ther mderate-incme wrking families. The Task Frce als stressed that it is bth imperative and feasible fr the City t ensure that the affrdable husing lst n this site will be preserved r develped thrugh ther innvative city plicies. What the City f Rlling Meadws decides t d, and the rle it chses t play in the redevelpment f 12 Oaks, will affect nt nly this site and its families, but als future husing and ecnmic develpment within its brders and may influence strategies in the regin. T date, the City f Rlling Meadws has shwn meaningful and significant leadership arund the 12 Oaks redevelpment, as well as their verall husing gals. The City has indicated an interest in implementing a tear-dwn fee rdinance t help preserve much f the vital affrdable stck in the city, and frming a husing cmmissin t build the internal capacity necessary t develp and mnitr future husing plicies and prgrams. In additin, the Task Frce cmmends the City n its cmmitment t cmmunicating its plans, gals and cncerns arund the develpment f the 12 Oaks site t stakehlders and cnstituents. 5
The Issue in Cntext It was just 50 years ag that develper Kimball Hill funded Rlling Meadws t be an affrdable twn fr wrking class families. Tday, like many ther cities striving t generate new surces f revenue, Rlling Meadws is fcusing its effrts n ecnmic develpment. Als like many ther cmmunities, it is quickly finding there is a fragile balance between imprving the ecnmic base and retaining cmmunity character. City leaders have stated their cmmitment t keeping at least 20 percent f the city s husing stck affrdable and retaining Rlling Meadw s blue cllar rts. Rlling Meadws is striving t serve existing residents and meet the grwing needs f existing and prspective cmpanies that require a strng, accessible lcal wrkfrce. Rlling Meadw s cmmitment is nw tested by a redevelpment effrt that can ptentially displace ver 600 families. While this dislcatin raises many challenges fr current residents and the City, the site itself, given its lcatin, als ffers a unique pprtunity t test mechanisms in creating a welldesigned, mixed-incme and mixed-use neighbrhd lcated cnveniently near emplyment, transprtatin and quality schls. As many twns struggle with hw t balance and crdinate husing preservatin and creatin gals with ecnmic develpment strategies, the questins and strategies explred by the Metrplitan Planning Cuncil s Rlling Meadws s Task Frce can prvide valuable lessns and ideas fr ther cmmunities thrughut the Chicag regin. The Site Twelve Oaks at Wdfield is a residential prperty lcated n 36 acres f land in suthwest Rlling Meadws, at the Schaumburg brder. It has been sld several times ver the past few years and was purchased by Sparks and Assciates in 2004. Sparks riginally planned t cnvert the rental hmes int cndminiums, ffering existing tenants a lease-t-buy ptin. In the fall f this year, Sparks accepted an ffer frm Centex Hmes, a natinal residential builder, whse plans are t build a mre dense mixed-use develpment. The sale may be finalized as early as April f 2006. Twelve Oaks is lcated at the intersectin f I-90, I-290, and Rute 53, near several majr emplyers and attractive amenities, such as Mtrla, Streets f Wdfield, Ikea, the new Schaumburg Cnventin Center, and a planned Metra STAR Line train statin. The site is just ff f Algnquin Rad, ne f the city s cmmercial crridrs, and is adjacent t an lder shpping center. Cnsisting f 692 garden-style apartments, the prperty currently carries n rental subsidies, althugh the hmes are affrdably priced fr the ver 600 wrking families f diverse backgrunds and ethnicities currently living there. The prperty cmprises apprximately 30 percent f Rlling Meadw s affrdable husing supply and eight percent f its verall stck. Given the size f the prperty, the lss f these hmes will have a significant impact n the character f the city. At the same time, given this prime lcatin, the prperty culd be cnsidered underutilized by sme standards. The City has recgnized this challenge fr many years, citing it as a ptential site fr redevelpment as far back as its 1993 Cmprehensive Plan. 6
Lcal Husing and Cmmercial Market There are apprximately 8,833 husehlds in Rlling Meadws, 77 percent f which are wner-ccupied. This is significantly higher than the Ck Cunty rate f 58 percent. The husehld median incme in Rlling Meadws was $60,000 in 2000 and, in 2003, the median huse value was $229,700. Rlling Meadws is a cmmunity that prvides quality amenities and a reasnably-priced husing stck. If left unchecked, the husing that is currently affrdable is unlikely t be s in the near future. Accrding t recent U.S. Census sales and incme data, hmes in the Rlling Meadws area are appreciating by 9.2 percent annually, while incmes are rising mre slwly at an average f just 5.6 percent per year. By 2010, accrding t grwth prjectins cmpiled frm the Nrtheastern Illinis Planning Cmmissin, U.S. Census, and czbllc, the typical hme will be priced at nearly $425,000, unaffrdable even t husehlds earning the prjected city median incme f $108,638. In 2000, husehlds earning Rlling Meadws median incme culd affrd 76 percent f the city s wner-ccupied husing and husehlds earning 80 percent f the median incme culd affrd ver half f this same stck. Prjectins shw that by 2010, just half (53 percent) f Rlling Meadws wner-ccupied hmes will be affrdable t husehlds at the city s median incme and just 23 percent will be within reach f husehlds at 80 percent f the city median incme. Much f the single-family husing stck in Rlling Meadws cnsists f smaller hmes, built in the 1950s and 60s n large lts. In additin, husehlds in Rlling Meadws are getting larger, which is indicated by the fact that ppulatin grew by nearly nine percent frm 1990 t 2000 while the number f husehlds grew slwer, by rughly eight percent. With this grwth in husehld size and the amunt f develpable land cntinuing t shrink, there will be increased pressure t build larger hmes and a greater ptential fr teardwns, threatening these mre mdest, affrdably priced hmes. Sparks and Assciates hired Strategy Planning Assciates t cnduct a residential and retail market study fr the site. Accrding the residential cndminium market study, the site is ideal fr a mixeduse cndminium develpment. Market-rate pricing culd range frm $225,000 t $446,000 r $203 t $281 per square ft. Accrding t the retail market study, the 12 Oaks trade area site culd supprt new cmmercial uses that are geared twards entertainment and cnvenience stres, including restaurants. The site shuld als be able t supprt a majr destinatin retailer that serves a unique market niche nt fund nearby, as well as cmmunity retail. Furthermre, the study suggested this site shuld include a mix f uses, aviding additinal strip mall develpment. 7
Redevelpment Prpsals In January f 2005, the City cmmissined the Lakta Grup - a planning cnsultant - t cmplete a redevelpment study fr the 12 Oaks at Wdfield site and develp several site plans that include cmmercial and residential uses. Lakta submitted fur site cncepts. The City Cuncil was mst cmfrtable with Lakta s cncept fr 415,000 sq. ft. f cmmercial space and 1,584 residential units. The cmmercial uses include tw-stry anchr retail space near the sutheastern intersectin f 1-90 and Rute 53 and the nrtheastern intersectin f Rute 53 and Algnquin Rad, as well as ne-stry neighbrhd-scale retail scattered mstly alng the eastern prtin f the site. The plan calls fr residential buildings f varying heights, including three 20-stry buildings alng the suthern prtin f the site, facing I-90, tw 12-stry buildings n the western crner, and three eight-stry buildings near the center f the site. There are three parking decks included in the site design, ne five-level deck at the sutheast crner, and tw three-level decks, tw f which are under grund, near the residential prtin f the site. In additin, the Lakta Grup s cncept incrprates a spine rad that cnnects traffic frm the Rute 53 exit nt Algnquin Rad t the new Schaumburg Cnventin Center. While Lakta s plans call fr a substantial amunt f cmmercial space, Centex Hmes has prpsed much less in their initial plans. Centex s draft cncept plans prpse 1600 cndminium units in tw t three tall buildings f 15 t 20 stries and nine t 11 buildings under 75 feet in height. Accrding t Centex, it will bring in a retail develper. Thse retail develpers Centex s representatives initially cntacted have suggested the market can nly supprt 100,000-150,000 square feet f retail. While Centex has indicated a willingness t set aside 10 percent f the new hmes as affrdable and agerestricted, they als suggested the cmpany wuld pssibly cnsider selling r dnating part f the site t bring in anther develper t build the mixed-incme rental cmpnent. Thirty-six acres f real estate lcated near the intersectin f three highways, near a majr retail and industry crridr, a cnventin center, and a new transit stp is prime fr a large-scale cmmercial and residential develpment. Because it is nt adjacent t any single-family, residential neighbrhds, the 12 Oaks at Wdfield site is a gd candidate fr a mixed-incme cmmunity with a rental cmpnent. The Lakta Grup s cncept plans and Strategy Planning Assciate s market studies shw that the site can supprt taller buildings, mre cmmercial space, decked parking, green space, and many ther amenities that serve mre families and a brader base f shppers. By wrking t redevelp this site, mixing husehld incmes and land uses, the City f Rlling Meadws is lking twards the future and anticipating residential and cmmercial grwth, while als paving the way fr increased tax revenue. 8
Task Frce Recmmendatins The Rlling Meadws Task Frce had the unique pprtunity f sitting dwn with the key stakehlders in this prcess, including the wner, buyer and City, and was able t learn many f their gals, cnstraints, and ideas fr this site. The grup appreciated the willingness f all parties t participate in candid discussins. This pen exchange was essential t the Task Frce s charge, as it demnstrated the cmpeting interests f each f the parties and the middle grund that culd be achieved thrugh sund plicy guidance. After meeting with these parties, the Task Frce was cnfident in the City s leadership and the viability f securing the financing necessary fr this effrt t succeed. The 12 Oaks develpment is an interesting challenge in that it hlds great ptential t supprt future cmmercial uses. At the same time, there is still the reality that the entire plan is based n the premise f lsing a stck f rental husing that is currently amng the mst affrdable in the Nrthwest suburbs. Despite the range f viewpints f the Task Frce vlunteers, it is encuraging the grup was able t reach cnsensus n the recmmendatins ffered belw. MPC and the Task Frce further believe these recmmendatins can translate beynd Rlling Meadws t ther municipalities dealing with very similar redevelpment challenges. The Task Frce recmmendatins related t preserving affrdability, maximizing ptins fr existing residents, and addressing brader site issues are detailed belw. Preserving Affrdability The Task Frce reviewed data prvided by the City, the current wner, and Centex. The Task Frce bserved there will be significant dllars invlved in the prpsed transactin, and there will be rm in the verall budget t accmmdate the recmmendatins belw, which were develped by husing experts, including bttm-line driven develpers. Mst imprtantly, the prpsed develpment is nt an as f right develpment. This means that numerus zning cncessins will be required frm the City in rder t bring this prpsal t reality. As such, the City has the right t, and shuld require, affrdability cncessins as part f granting the zning variances. Additinally, it is anticipated that Tax Increment Financing (TIF) funding will be required. In this case, the City and ther units f lcal gvernment will be asked t frg future tax revenues in rder t assist the develpment. Here again, this public financing vehicle underscres the capacity f this develpment, and the necessity f the City t advance the public benefit f affrdable husing bth n-site and ff-site. Apartment rents at 12 Oaks at Wdfield range frm $859 fr a ne-bedrm unit t $1,249 fr a three-bedrm unit, but are nw as lw as $699 due t the pending sale. These hmes are affrdable t families with annual incmes ranging frm $30,000 t $50,000 respectively. Twelve Oaks at Wdfield prvides a quality husing envirnment t ethnically diverse wrking families. Currently, 827 adults and apprximately 300 children live at 12 Oaks at Wdfield, all f whm will be displaced at least in the shrt-term. The develpment has amenities including green space, access t transprtatin, and lcatin in a high-ranking schl district. The new develpment is expected t cnsist f 1,600 cndminiums in high-rise buildings, targeted t empty nesters and yung prfessinals. Centex initially indicated its intent t include a 10 percent affrdable husing cmpnent f hmewnership units that wuld be age-restricted t peple 55 and lder. This wuld cnstitute 160 fr-sale units fr senirs. While exact sales prices were nt discussed, market studies indicate prices in the $225,000 t$446,000 range. Centex als indicated that in Illinis, they are strictly a fr-sale develper and nt interested in rental husing, but wuld cnsider a transfer f sme f the prperty t the City r a develper t build a rental cmpnent. 9
A unit affrdable t a fur-persn husehld at 80 percent f the area median incme wuld need t be priced in the $150,000 price range, depending n cndminium assessment fees. This price wuld still nt be affrdable t the vast majrity f current residents at 12 Oaks at Wdfield. Clearly, there is a mismatch between the type and tenure f units currently prvided and that which is prpsed. Even if the new develpment had 320 units (20%) in the $150,000 price range, it is nt a substitute fr the husing currently affrdable t 12 Oaks and ther mderate-incme Rlling Meadws residents. In light f the fact that 12 Oaks at Wdfield represents 30 percent f the rental husing stck and apprximately 30 percent f the affrdable husing stck in the city, the Task Frce cncluded the 10 percent affrdable fr-sale slutin n-site prpsed by Centex is nt sufficient. The Task Frce recmmends a mixed-incme rental cmpnent f anther 10 percent be included in the new develpment. Ideally, the pricing fr this rental cmpnent wuld be 50 percent f the units at the market rate and 50 percent priced at 60 percent f the Area Median Incme r belw t qualify, which wuld qualify the units fr Lw Incme Husing Tax Credits. In additin, prgrams and strategies shuld be develped t ffset the remaining 372 units f affrdable husing that will be lst thrugh this develpment. Based n the infrmatin prvided by all f the parties, the Task Frce recmmends the fllwing: Require 20 percent f the units n site be affrdable, bth rental and fr-sale, and nt age-restricted. The Task Frce applauds and fully supprts the City f Rlling Meadws gal f 20 percent affrdable husing in the new develpment. Given the expected lss f 692 affrdable hmes n the 12 Oaks, the Task Frce believes it is crucial fr the City t hld t this gal. Based upn the mst recent develper plans, this wuld be 320 units (20% f 1,600). Affrdable hmes shuld be bth fr-sale and rental as they serve different incme ranges. Rental hmes are needed as part f the affrdable strategy. The affrdable husing stck that is being lst is affrdable t wrking families with incmes as lw as $30,000, arund 60 percent f the area median incme. Affrdable fr-sale hmes, even with prices f apprximately $150,000 t $200,000, wuld nt be affrdable t mst f the existing residents f 12 Oaks. The rental develpment shuld be utsurced t an experienced mixed-incme husing develper. Because Centex acknwledged that their primary expertise is nt in the area f develping and managing rental husing in this regin, this cmpnent f the site shuld be separated and administered by a third party. The rental develpment shuld be mixed-incme; nn-age-restricted, and prvide a variety f bedrm sizes. The rental building(s) shuld be as clse t 50 percent affrdable and 50 percent market as pssible. The rental develpment shuld be a minimum f 150 units in rder t prvide the rders f magnitude required fr prperty management and the cmplex financing. (See Appendix A develper agreement guidelines) Affrdable hmes shuld nt be age-restricted. The hmes that are being lst are nt agerestricted and therefre, creating pprtunities slely fr senirs will nt serve the significant number f wrking families that are being displaced by this redevelpment. While new husing shuld reflect federal guidelines fr accessibility and adaptable units, these hmes shuld be pen t all qualified tenants regardless f age. Fr-sale units shuld be well-integrated. Scattering the affrdable hmes thrughut the new 12 Oaks cmmunity and mirrring the unit mix f the entire develpment will ensure a healthy blend f incmes thrughut the redevelped neighbrhd. 10
Adpt plicies t ffset the lss f the affrdable husing. Even with the inclusin f 320 cndminiums and apartments n site, there wuld still be a net lss f 372 affrdable hmes in Rlling Meadws. This represents ver fur percent f the city s entire husing stck. The current site, with 692 affrdable rental units and sme lwer end retail, will be replaced with 1,600 mstly market-rate cndminium units with sales prices in the $300,000 range and at least 100,000 sq. ft. f new retail. This will generate significantly mre real estate and sales taxes fr the City f Rlling Meadws. As part f the Planned Unit Develpment (PUD) prcess, the Task Frce cncluded that the City shuld require a cntributin r a fee in-lieu frm the buyer t seed an affrdable husing trust Fund t assist in either the develpment f new r maintenance f existing affrdable husing in Rlling Meadws. The Task Frce cntemplated a number f frmulas the City culd cnsider in determining the fee in- lieu. (See Appendix B) Establish mechanisms fr the City f Rlling Meadws t implement the Task Frce affrdability recmmendatins. In this develpment, the City will have t apprve entirely new zning uses r a planned develpment fr the site. It is als likely the develper will request significant TIF funds, as there will be a cnsiderable amunt f new taxes generated by the new develpment. The City can use these tls t create regulatry mechanisms t facilitate and enfrce its gal f 20 percent affrdability n site. Fllwing are tls, prgrams and plicies that can be emplyed by the City f Rlling Meadws t cntinue its histric cmmitment t affrdable husing. Adpt the Metrplitan Mayrs Caucus Husing Endrsement Criteria. Adpting guiding principles fr balanced husing develpment is essential fr Rlling Meadws in rder t cmmunicate its gals, institutinalize planning practices that will supprt these effrts, and attract the type f develper that is interested in creating a variety f husing ptins within the city. Rlling Meadws is a desirable cmmunity, ne that has chices regarding what type f develpment happens in the cmmunity. The Husing Endrsement Criteria (see Appendix C), can frm the basis fr creating mre chices fr families f all incmes, including thse at r belw the area median incme, in a cmmunity that supprts ecnmic develpment, cmmunity cnnectivity, and mre bradly, a healthy Chicag regin. Setting these types f expectatins fr develpers creates mre predictability up frnt, smething develpers ften request, and establishes a fair playing field thrughut the city. Several ther similarly desirable cmmunities such as St. Charles, Arlingtn Heights, and Evanstn have embraced these criteria in rder t attract well-designed, mixed-incme husing develpment, and have successfully attracted builders interested in this type f develpment. The Metrplitan Mayrs Caucus, Campaign fr Sensible Grwth, and Metrplitan Planning Cuncil develped Sensible Tls fr Healthy Cmmunities, a wrkbk that explains hw t incrprate the criteria and ther smart grwth principles int daily land use decisins. If Rlling Meadws chses t adpt these criteria, the Metrplitan Planning Cuncil, Campaign fr Sensible, and Metrplitan Mayrs Caucus are available t prvide trainings n the wrkbk t staff, City Cuncil members, and cmmissiners. Pass an inclusinary husing rdinance. On several ccasins, city fficials have indicated the City wants t see 20 percent affrdable units in its new develpments. The Task Frce believes the best way t make this gal a reality is t pass an inclusinary husing rdinance. The rdinance wuld cdify the 20 percent affrdable cmpnent fr new develpments, majr rehabilitatin and large cndminium cnversins. The rdinance culd be structured t 11
prvide the city with a multifaceted plicy tl capable f generating husing, revenue, and land t help address the need fr affrdable and wrkfrce husing. MPC is willing t prvide mdels and guidance with develping an rdinance. (See Appendix D fr a mdel inclusinary husing rdinance and backgrund n inclusinary husing) Make the 20 percent affrdable husing gal a cnditin f the Planned Unit Develpment. The current develpment plan fr the site is nt an as f right develpment. The current zning des nt allw the level f density r height f buildings anticipated by the develper. Cnsequently, Rlling Meadws must apprve a PUD t allw the changes n the site. As part f this PUD prcess, the City shuld include its requirement fr 20 percent affrdable husing n site. Create a partnership with an experienced mixed-incme rental develper. Affrdable and mixed-incme rental develpment is a very specific market niche fr develpers. The City shuld take respnsibility fr sliciting rental develpers in cllabratin with Centex. Task Frce members believe a mixed-incme rental develpment will attract significant resurces t make the prpsal feasible. There are a variety f financing tls available in Illinis t assist in the develpment f a mixed-incme rental develpment, including: Lw Incme Husing Tax Credits (LIHTCs) administered by the Illinis Husing Develpment Authrity (IHDA). These credits are the primary surce f affrdable husing financing. Apartment units financed with LIHTCs must be rented t families with incmes at r belw 60 percent f area median incme, apprximately $45,000 annual incme fr a family f fur. Rents wuld be fairly similar t the rents at the current 12 Oaks at Wdfield site. IHDA als administers the Illinis Affrdable Husing Trust Fund, HOME prgram, and ther resurces that culd supplement the resurces available t ensure the lngterm affrdability f hmes created thrugh the 20 percent affrdable cmpnent. The Illinis Affrdable Husing Tax Credit Prgram prvides a vehicle thrugh which Centex can dnate prperty r funds t be used fr the affrdable rental develpment, and secure a tax credit f 50 cents n the dllar fr the value f that dnatin. Site-based rental perating assistance may be available fr up t 25 percent f the new apartments thrugh MPC s Reginal Husing Initiative. The Ck Cunty Assessr has a number f initiatives t lwer assessment rates f affrdable dwellings, including Class 9 and a new Office f Special Assessment Prgrams, that can ensure hmes created thrugh an inclusinary rdinance r ther deed-restricted prperties that will remain affrdable are assessed fairly. Create an affrdable husing trust fund. As part f the 12 Oaks at Wdfield transactin, the City f Rlling Meadws culd create an affrdable husing trust fund. Husing trust funds are distinct funds established by legislatin, rdinance r reslutin t receive public revenues that can nly be spent n affrdable husing. Fund surces can include develper cntributins, fees in-lieu, crprate assistance, grants, municipal fees r taxes (e.g. cmmercial r residential linkage fees r taxes, real estate transfer taxes, teardwn fees r taxes, sales r excise taxes), federal and state husing dllars, etc. These trust funds are typically administered by the lcal agency r department that handles federal husing prgrams. A husing trust fund generates a cnsistent stream f funds that can be used in a number f ways t serve a variety f affrdable husing initiatives. In additin, trust funds can effectively harness and leverage additinal resurces fr affrdable husing prgrams. (See Appendix E.) The husing trust fund culd be seeded with: 12
TIF funds Citywide real estate transfer fee r tax Develper cntributin n the sale f each new unit in the redevelpment impact fee fr the lss f affrdable husing units r an in lieu cntributin frm the develper teardwn fees r taxes The trust fund culd have a variety f uses, including: Hmewnership and relcatin cunseling fr renters at risk f displacement in this develpment and thers. Dwn payment assistance r secnd mrtgage assistance t families displaced by this develpment and ther lw and mderate-incme families. Rehabilitatin lans t lw and mderate incme hmewners and senirs whse huses are in serius need f repair but wh cannt affrd the wrk. A match n emplyee-assisted husing Gap financing t assist in meeting the City s gal f affrdable husing in new develpments. Acquisitin f land r buildings fr affrdable husing Rental subsidies prvided directly t landlrds t ensure that existing apartments stay affrdable and serve wrking families and senirs. Trust Fund dllars culd be structured in a manner t maintain lng-term affrdability thrugh vehicles such as deed restrictins, secnd mrtgages liens, and equity-sharing mdels. Create a cmmunity land trust. A cmmunity land trust can be established t acquire and hld land t prvide affrdable access t husing within the cmmunity, which wuld enable Rlling Meadws t keep sme f its husing stck affrdable in perpetuity. The land trust culd purchase husing in need f repair r at risk f teardwn, undertake the rehabilitatin, and then lease r sell the hmes while retaining wnership f the underlying land thrugh a lngterm lease-hld. It culd als acquire land fr new develpment. Typically a nnprfit rganizatin, the cmmunity land trust receives land as gifts r uses public r private funds t acquire land. Quite ften, a cmmunity may use revenues frm its trust fund t acquire land fr a cmmunity land trust. (See Appendix F.) Offset cst f affrdable fr-sale units. The cst f building the affrdable cndminiums nsite can be written dwn via a number f mechanisms, including: internal subsidies frm the sale f market-rate units emplyer-assisted husing (EAH) Rlling Meadws r Nrth West Reginal Husing Trust Fund IHDA Trust Fund HOME Density bnuses and zning cncessins that will be prvided thrugh the PUD prcess Fee waivers Tax sharing agreement 1 1 As part f the financial analysis f the prpsed develpment and its affrdability cmpnent, the City may cnsider the viability f a tax sharing (r tax rebate) agreement n sales taxes. The Illinis Municipal Cde authrizes municipalities t enter int agreements with private entities such as Centex t rebate a prtin f the sales tax revenue generated frm a develpment and received by the municipality. In the case f the Centex prpsal in Rlling Meadws, a rebate f sales taxes culd prvide Centex with added flexibility and pprtunities in satisfying the City's ther develpment requirements, including the affrdability requirements. In rder fr the City t determine if a tax sharing agreement makes sense fr the current prpsal, the City will need t request frm Centex sme additinal infrmatin regarding the precise nature and extent f the retail aspect f the prpsed develpment and the expected amunt f revenues that will be generated and subject t the applicable sales tax. MPC has sample tax sharing agreements fr the City t review if desired. 13
Explre the pssibility f inter-gvernmental strategies. As Rlling Meadws is frtunate t be surrunded by ther twns already cntemplating their affrdable and wrkfrce husing demands, it may be apprpriate t facilitate a new trust fund and emplyer-assisted husing prgram n a reginal basis within the nrthwest suburbs. Many f the emplyers and residents in the area identify their bundaries beynd traditinal city limits, and wuld appreciate the flexibility t participate in prgrams that d the same. Such inter-gvernmental cperatin, f curse, als ensures mre dllars and mre chices fr the lw and mderate incme husehlds served. In shrt, the Task Frce members recgnized this develpment prvides the pprtunity t create a new mdel f city/develper cperatin t create affrdable husing n-site, as well as catalyze new mechanisms t assist the City f Rlling Meadws in maintaining affrdable husing ptins fr wrking families thrughut the city. Maximizing Optins fr Existing Residents Twelve Oaks at Wdfield prvides a prduct that is scarce in the city and surrunding suburbs, ffering 30 percent f the Rlling Meadws rental husing. The hmes are well-maintained and serve valuable members f the cmmunity - its wrkers. Furthermre, in rder t find cmparable rental husing, displaced families will be frced t mve utside f this desirable schl district and away frm this strng emplyment base, negatively impacting nt nly their wn lives and the lives f their children, but als adding t the regin s traffic cngestin, as wrkers will nw cmmute further t their jbs. While relcatin is usually handled by the buyer f a prperty, Centex agreement with Sparks and Assciates transfers this respnsibility t the current wner, wh has demnstrated experience in relcatin and has develped a well thught ut relcatin plan fr the tenants. Michael Sparks has kept residents abreast as the redevelpment plans evlve. The Task Frce is cnfident that Sparks and Assciates is cmmitted t fllwing thrugh n its plans and cmplying with city requirements. At the same time, Sparks has nt been invlved in a relcatin f this size befre, and des pssess selfinterest t refer residents t vacancies in his ther prperties. As illustrated previusly, the City can ffset the lss f affrdable hmes frm this site and cntinue t prvide ptins fr lw- and mderate-incme residents. Unfrtunately, this des nt diminish the impact f this particular redevelpment n existing families living in 12 Oaks at Wdfield. The City has a unique pprtunity t prvide supprt t these residents that can serve as a mdel t ther municipalities dealing with similar relcatin challenges. Hw the City chses t handle this prcess will impact future develpment effrts in Rlling Meadws and send imprtant signals t the marketplace. Thrugh cperatin with surrunding cmmunities, creative partnerships and crdinatin with ther redevelpment effrts in Rlling Meadws, the City can ensure current tenants are prvided with chices that best meet their needs. Partner with an experienced nn-prfit rganizatin. Accrding the relcatin plan, Sparks and Assciates staff currently cnsists f abut six emplyees. Given the size f this relcatin and the diversity f existing tenants, the Task Frce strngly recmmends that the City require Sparks t leverage resurces t engage additinal nnprfit partners, such as Nrth West Husing Partnership (NWHP), in rder t prvide additinal supprt t residents. The City itself can supplement Sparks ability t achieve this gal, and can ensure that relcatin activity is crdinated with ther City redevelpment effrts (Wellingtn, Dminick s, etc). Thrugh funds received frm this develpment utlined abve, the City can bring in an experienced nn-prfit partner by funding at least ne full-time staff member. This partner shuld prvide multilingual supprt services t augment the wrk f 14
the seller s management team and assist with tenant-wner relatins, administer city relcatin benefits, reslve fair husing issues, and prvide hmewnership cunseling. Thrugh this type f partnership, the City can ensure the kind f accuntability that prevents cnflicts f interest and prvides tenants with mre ptins. Thrugh an entity such as NWHP, husing pprtunities can als be made available in neighbring jurisdictins. Prvide pprtunities fr residents in Rlling Meadws. In crdinatin with lcal businesses, neighbring municipalities, and experienced nn-prfit partners, the relcatin plan shuld supprt as many residents interested in cming back t the city and the new redevelped 12 Oaks site as pssible, either as renters r hmewners. Emplyer-Assisted Husing. Nrth West Husing Partnership currently administers an emplyer-assisted husing prgram fr several neighbring emplyers. The City can cntract with NWHP t determine where current tenants are emplyed and begin t wrk with thse emplyers t create EAH prgrams. With additinal funding t increase their staff capacity, NWHP can help with hmewnership and credit cunseling, as well as wrk with neighbring municipalities t develp an inter-gvernmental EAH prgram that will engage mre industries in the prgram and ffer this benefit t emplyees f Nrth West suburban municipalities (See Appendix G fr inter-gvernmental EAH prgram descriptin.) Offer relcatin benefits. Sparks and Assciates relcatin plans ffer an increased relcatin benefit f $5,000 t tenants wh purchase cndminiums in ne f their ther prperties. The Task Frce recmmends that the City ffer a relcatin benefit thrugh funds generated by the develpment, fr residents wh stay in Rlling Meadws. Bth the City and 12 Oaks families benefit if residents are able t stay in the cmmunity. These funds wuld be used t rent r purchase anther hme r fr general mving expenses. Keep a database f tenants. Sparks shuld prvide a database f tenants, with their new cntact infrmatin, t the City and Centex, s that thse tenants are updated n the prgress f the new develpment, prvided supprt such as hmebuyer cunseling in the interim, and are invited back t the redevelped prperty nce it is cmpleted. Require use f the Unifrm Relcatin Assistance and Real Prperty Acquisitin Plicies Act (URA). While Sparks and Assciates utlined a fair relcatin plan, the City shuld cnsider requiring the use f the Federal URA in all Planned Unit Develpments and Tax Increment Financing District develpments that invlve residential relcatin. Althugh this act is required nly when federal funding is used and recmmended in the State Tax Increment Financing regulatins, the URA ffers strict guidelines fr the kind f nticing, financial and ther supprt residents shuld get when their hmes are being redevelped. By requiring use f the URA, the City prvides predictability and ensures fair relcatin prcedures in all large-scale develpment effrts in Rlling Meadws. The Task Frce recmmends the City require all residents residing at 12 Oaks at Wdfield prir t Octber 5 th, when Mr. Sparks sent a first ntice t the tenants, receive URA benefits. All residents that mve in after Octber 5 th shuld be infrmed they d nt receive these benefits. As shwn belw, Mr. Sparks relcatin plan falls nly slightly shrt f the URA guidelines and can easily be adjusted t accmmdate this requirement. (See Appendix H fr a helpful guide n the URA.) 15
Tenant Nticing Requirements: Under URA, tenants must get three ntices in their wn languages. All three ntices shuld be either certified r hand delivered with a signature fr prf f nticing. General Infrmatin Ntice. Mr. Sparks sent this ut n Octber 5, 2005. This ntice infrms affected tenants f the prject and that they may be displaced. Ntice f Relcatin Eligibility. This ntice infrms tenants that they will be displaced by the prject and establishes their eligibility fr relcatin assistance and payments. In this ntice, Sparks and Assciates shuld utline all relcatin benefits. Sparks and Assciates des nt prvide an indicatin that this ntice will be sent in its current relcatin plans. 90-Day Ntice. This ntice infrms displaced tenants f the earliest date by which they will be required t mve. This ntice may nt be issued unless a cmparable replacement dwelling is available and the displaced tenant is infrmed f its lcatin and has sufficient time t lease r purchase the prperty. The cmparable unit shuld be identified in the ntice. Relcatin Advisry Services: Relcatin advisry services are required t be prvided, again in the apprpriate languages, t all eligible displaced tenants, including nnresidential tenants. They include: Explanatin f relcatin assistance. Explanatin f transprtatin assistance. Offer f ther assistance, including scial services, financial referrals, husing inspectins (an apprpriate rle fr a nnprfit partner). Current and nging listings f cmparable units fr bth residential and cmmercial tenants. Supply infrmatin n federal, state, cunty, and city prgrams ffering assistance (an apprpriate rle fr a nnprfit partner). Infrmatin abut cunseling and ther assistance t minimize hardship, including multilingual services (an apprpriate rle fr a nnprfit partner). Mving Payments: The URA prvides tw mving payment ptins frm which tenants can chse: Payment fr the actual, reasnable mving csts and related expenses, which are reimbursed by the wner nce prvided with a receipt frm the tenant. Payment based n a fixed schedule: (1-bedrm=$550, 2-bedrm=$700, 3- bedrm=$850). Replacement Husing Assistance: Currently, Sparks and Assciates is ffering mre assistance based n tenure at the prperty (three mnths rent + $1,000 fr a tenure f ver nine mnths and 50 percent f all rent paid fr a tenure f less than nine mnths). While this prpsal is fair, the URA requires the tenant s incme be cnsidered when determining the amunt f assistance, which shuld be calculated as fllws: Residential tenants earning abve 80 percent f the area median incme are eligible fr replacement husing assistance in the amunt equal t the difference in the increase in husing csts as a result f the displacement fr 42 mnths. If the husing csts d nt g up, n assistance is required. Fr tenants earning belw 80 percent f area median incme, the calculatin fr the replacement husing takes int cnsideratin their incme and what they can affrd, which is determined t be 30 percent f husehld incme. Therefre, if a tenant earns belw 80 percent f the area median incme, which is determined by the U.S Dept. f Husing and Urban Develpment (HUD), the assistance the husehld receives will nt be based n what it 16
currently pays in rent, but rather will equal the difference between what it can affrd in mnthly rent (30 percent f incme) and the cst f the new unit fr 42 mnths. Cmparable Unit: A unit is cnsidered t be cmparable if it is decent, safe and sanitary, f the same bedrm size and similar square ftage, and is in r near the same cmmunity. When such husing cannt be prvided, the URA prvides fr husing f last resrt. Husing f last resrt may invlve the use f replacement husing payments fr ther methds f prviding cmparable units, such as the rehabilitatin f existing units r the building f new units in the surrunding cmmunity. Supprt existing cmmercial tenants. The Task Frce was particularly impressed with the supprt the City f Rlling Meadws gave t existing cmmercial tenants f the Wellingtn develpment n Kirchff Rad. The City, as part f the develpment agreement, negtiated reduced rents fr the tenants fr fur years in rder fr them t be able t stay in the new cmmunity. At the end f the fur years, the tenants wuld then pay market-rate rents. The develpment was als phased in such a way that the tenants did nt have t relcate ff-site. The cmmercial tenants were able t cntinue peratins until the new building was cnstructed. The Task Frce vlunteers encurage the City t ffer similar incentives fr the cmmercial tenants lcated in the adjacent parcels near 12 Oaks, which are expected t be included in this redevelpment effrt. In additin, URA guidelines require that cmmercial tenants als receive relcatin advisry services and relcatin assistance. This apprach prvides the added benefit f ensuring cmmercial pprtunities that are affrdable t lwer-incme husehlds in the redevelped site. (See Appendix H.) Mre Green, Less Grey: Implementing Innvative Site Design The Task Frce vlunteers prvided site design recmmendatins t supprt affrdability and quality f life fr new residents. As the City is lking t create a viable mixed-incme, mixed-use cmmunity and the Task Frce is recmmending a significant rental husing cmpnent fr the site, there are several design cnsideratins that will help create a chesive, well-integrated neighbrhd that will supprt bth the residential and cmmercial cmpnents. Increase residential and cmmercial integratin. Currently, Centex Hmes is planning t develp the cmmercial and residential cmpnents f the prperty seperately. Accrding t Centex, the cmmercial develpers they are in cnversatins with as ptential partners are nt interested in integrating the tw uses. While the Task Frce understands the develper s desire fr simplicity in this prcess, the vlunteers als knw that clsely linking the new hmes t the retail will create a mre chesive cmmunity, ne in which the tw cmpnents supprt each ther. In additn, this mdel will make the land csts mre efficient. The building can be divided int cndminium wnership, s that the hmebuilder and retail develper d nt necessarily have t be the same, althugh the same general cntractr shuld be respnsible fr bth cmpnents. This site, in particular, given its prximaty t transit and ther retail, wuld be ideal fr this type f develpment. It wuld als enhance cnnectivity bth within the cmmunity itself and t the adjacent business crridr. Particulary, the Task Frce suggested the cmmercial develpment be fcused 17
alng Alqnguin Rad, where there is already cmmercial uses, and sme residential hmes be placed abve the cmmercial. In additin, develping buildings with bth residential hmes and cmmercial spaces will create pprtunities fr mre pen space, water features, and ther valuable site ammenities. Similar mdels can be fund at the Whle Fds in Evanstn; Renassaince Place in Highland Park; at several lcatins in Arlingtn Heights, including Village Green, Metrplis and Arlingtn Twn Square; and, f curse, Riverwalk Cndminiums in Rlling Meadws. Incrprate apprpriate height variatins. Bth the City f Rlling Meadws and representative frm Centex have expressed an interest in tall, 15-20 stry buildings n this site. The Task Frce agrees this lcatin can supprt buildings f this height because the neighbring cnventin center will be cmparable, but stress that height variatins shuld be incrprated int the develpment. Mre specifically, if mixed-incmee rental husing is included in the plans, that building r series f buildings shuld be lw-rise, arund five stries, in rder t create a family-friendly neighbrhd. Supprt walkability and integrated vehicle access. The Task Frce felt the site shuld supprt residents ability t walk within the cmmunity and t nearby public transit. The vlunteers suggest a pedestrian study be cnducted t determine hw the site design can better supprt this activity and examine the flw between the prpsed rail statin and the Wdfield shpping center. In additin, t supprt gd design practices, the Task Frce recmmends the use f decked parking,with a prtin belw grade. Use water detentin pnds as an attractive amenity. The water features shwn n the plan abve are an inventive use f strmwater detentin pnds. Attractively placed thrugh the center f the site t prvide a greenway, the pnds can ffer an eye-catching setting fr the neighbrhd center. This way, much f the required detentin culd be handled n-site and add t the amenity value f the entire develpment. Recnsider access spine lcatin. The City is requiring the new develpment include a spine rad that cnnects traffic frm the exit ff f Rute 53, thrugh the site, t the new Schaumburg Cnventin Center. This spine, which runs thrugh the nrthern prtin f this site, dividing cmmercial and residential uses, was included in the Lakta Grup s design plans, with the gal f prviding the necessary transit access t supprt the substantial amunt f cmmercial space. The Task Frce vlunteers recgnize fr this site t be a vibrant residential crridr, pedestrian-friendly, and cnnected t the ecnmic develpment activity surrunding it, residents and visitrs must be able t access the site cnveniently. As Centex s current plans cntemplate less cmmercial square ftage, the City and develper may cnsider relcating this access rad. If the new develpment des nt fllw the City s site design as Centex has currently suggested, this same rad lcatin, nw running thrugh the middle f a predminately residential develpment, wuld negatively impact the character f the new neighbrhd, making the area less desirable fr new residents and families in particular. If the City s designs are nt fllwed, the Task Frce lked at such alternatives as a new rad cming thrugh the eastern frntage rad, arund the site, t I-90 near the new Metra Star Line statin; r the western frntage rad int the cnventin center. This wuld create a mre chesive, walkable neighbrhd and wuld allw fr additinal pen space. This transprtatin access issue prvides the City with an pprtunity t request state transprtatin resurces t supprt lcal affrdable husing effrts, cnsistent with the State s cmprehensive husing plan. MPC is able t assist the City in leveraging these additinal resurces frm the Ill. Dept. f Transprtatin. 18