Lightfoot puts developers on notice in lofty inaugural address

The new mayor said builders “can no longer skip their responsibilities” in the city’s deepening affordable housing crisis
By Alex Nitkin | May 20, 2019 02:00PM

Lightfoot giving inaugural address

Lightfoot giving inaugural address (Credit: Getty Images)

New Mayor Lori Lightfoot had a pointed message for the real estate industry moments after she was sworn into office Monday: The city’s shrinking stock of affordable housing is your problem, too.

“Long-term residents, whether homeowners or renters, should not be forced out of their neighborhood when it goes through a period of transformation,” Lightfoot said. “And developers can no longer skip their responsibilities by taking tax dollars but leaving it to someone else to solve our affordable housing crisis.”

The line, which came about halfway through her 40-minute inaugural address, was an apparent shot at the two new tax increment financing districts created by the lame-duck City Council last month, which could use up to $2.4 billion in combined tax dollars to fund new infrastructure around the Lincoln Yards and The 78 mega-projects.

Lightfoot, then the mayor-elect, had called on aldermen to delay approval of the two districts but later backed down. At the time, she told development giants Related Midwest and Sterling Bay to “enjoy this moment in the sun, because you’re never going to get a deal like this again out of the city of Chicago as long as I’m mayor,” according to the Chicago Sun-Times.

But despite the tough talk, Lightfoot included a line in her speech sure to delight builders accustomed to lengthy permitting and approval processes.

“We need to cut the red tape and obstacles and instead promote the building of new units and have flexibility in our building code so that innovative housing forms can come on line,” Lightfoot said.

Specifically, that means the city should “consider allowing tiny homes and coach houses in zoning changes,” according to a116-page transition report her staff released last week.

The report went on to propose a “transparent timeline for planning proposals to move to approval,” with the city’s planning department taking over some of the permitting responsibilities traditionally owned by aldermen.

Building more affordable housing was a central plank in the sweeping agenda Lightfoot laid out Monday, which also included calls to snuff out gun violence and root corruption from City Hall.

Under her watch, the city housing department will be charged with fostering “the growth of housing that is affordable all over this city,” she said during her speech.

Lightfoot, a former federal prosecutor and attorney for the private firm Mayer Brown, had scarcely registered on the radar of real estate industry donors before her surprise first-place finish in the Feb. 26 election. But when it became a one-on-one runoff against Cook County Board President Toni Preckwinkle, high-profile developers and builder groups rallied to her side en masse.

Now, developers are watching closely to see how she’ll shape the city’s contested Affordable Requirements Ordinance, which requires developers to charge reduced rents on up to 20 percent of units in new apartment buildings proposed in gentrifying parts of the city. Builders have decried the rules as too punitive, blaming them for at least a dozen scuttled development plans in the past 1½ years.

In their transition memo, Lightfoot’s team pledged to hang on to the ordinance but signaled they were open to changes. The city should “convene a task force of developers, advocates and Community Development Financial Institutions” to brainstorm “impactful changes” to the policy, the document reads.

But the biggest shock for new development could be Lightfoot’s central campaign pledge to end “aldermanic privilege,” the unwritten City Council rule that gives aldermen near-total power over new construction in their own wards. The change could open an avenue for builders, especially developers of affordable housing, to sidestep opposition from neighbors who oppose their plans.

It could also make it harder for aldermen to abuse their offices, as when Alderman Ed Burke (14th) allegedly blocked the owner of a Burger King franchise from landing a driveway permit until he hired Burke’s private law firm.

Hours after delivering her address, Lightfoot signed an executive order putting a limit on the aldermen’s authority over licensing and permits.

“This does not mean our Aldermen won’t have power in their communities,” Lightfoot said during her speech. “It simply means ending their unilateral, unchecked control over every single thing that goes on their wards.”

“Alderman will have a voice, not a veto,” she added.