Chicago Mayor Pursues $1.25B Bond for Affordable Housing

Mayor Brandon Johnson is still fighting to pass affordable housing initiatives after voters said no to Bring Chicago Home, his signature policy that would have funneled revenue from raised property transfer taxes toward such initiatives.

Johnson spelled out a revised plan to borrow $1.25 billion for affordable housing and economic development projects at a recent meeting, the Chicago Sun-Times reported.

The revised proposal emphasized increased transparency in project selection, guidelines for retaining certain tax increment financing districts and more frequent reporting to City Council and the public.

The plan calls for $1.25 billion in bonds to be allocated over five years, with $250 million annually divided between the city’s Department of Planning and Development and the Department of Housing, for economic development and housing programs.

It would also allow numerous TIF districts to expire, and for the tax dollars recouped from those districts to be redirected to fund this initiative. This shift signifies a departure from Chicago’s traditional reliance on TIF funds for its developments, removing geographic barriers to how the money is spent.

Projects exceeding $5 million would require City Council approval to proceed, a point of contention that led to extensive questioning.

The plan has the “potential to enhance Chicago financial flexibility and funding major developments,” said Janice Oda-Gray, an analyst from the City Council’s Office of Financial Analysis. But she asked for clarity in how the $5 million threshold was determined.

Council members, including aldermen Samantha Nugent and Brendan Reily, suggested it should be lowered to more like $1 million.

“A whole bunch of the low-hanging fruit for this program lies in that $1 to $5 million range,” Reilly said. “If we’re giving up approval over a big chunk of where the projects land — which is that middle ground — my concern is that we won’t really have a whole lot of say on what’s funded and what’s not.”

Questions also rose about which TIFs would expire soon and be up for renewal. Approximately one-third of Chicago’s 121 TIF districts are set to expire in the next three years, the outlet reported.

Despite apprehensions, a number of council members and community organizations, including Chicago Community Loan Fund and Metropolitan Planning Council, signed off on the bond plan, citing increased transparency compared to previous iterations.

—Quinn Donoghue