Property tax break may boost development
A recent state law that gives big discounts on property taxes for new affordable housing developments is "really the only thing driving any development" in Evanston.
That's the view of Evanston-based developer Michael McLean . "People want to build in Evanston," McLean adds, but high costs and a difficult approval process mean it now only makes sense with the tax break.
A proposed rewrite of the city's inclusionary housing ordinance would increase the share of affordable units required in most projects from 10% to 15%.
But recently, some developers have proposed projects going even further — to 20% affordable units.
That 20% level matches the threshold required to qualify for the the new tax incentive.
In return for pledging to rent 20% of the new building's units to residents earning no more than 60% of area median income for 30 years, the developers get a reduction of the property taxes owed on the difference in the value of the property before and after the new project is built.
The reduction is front-loaded — starting at 100% in the first three years, and phasing out completely after 20 years.
Both Evanston developers and regional experts told city staff that the Affordable Housing Special Assessment Program , as implemented by the county assessor's office, is increasingly popular.
Senior Housing Planner Uri Pachter says developers have expressed "strong support for the program and its benefits."
Evanston is eligible for the program because its defined as a "low affordability community" by the Illinois Housing and Development Authority with 40% or less of its total year-round housing units considered affordable.
Jerome Macroni, an attorney at the assessor's office, said the program could be particularly suitable for sites in Evanston's downtown area that now have relatively low property values.
The state law providing the property tax incentive is scheduled to expire in 2027 .
But the legislature has the option of extending it, and Macroni says, "I don't know of anyone criticizing it."
He also said the office is revamping the two-part application process into a simpler single-form application, which would make it easier for developers to apply.
