The City of Chicago will propose two new Affordable Requirements Ordinance (ARO) pilot areas this week, according to the Chicago Sun-Times. It would change ARO rules in the Little Village and Pilsen neighborhoods.

Generally, the ARO requires that property owners who build new construction with 10 or more units, or add new 10 or more units to an existing residential property, and receive a zoning change must rent or sell 10 percent (“the baseline”) of those units at an affordable rate.

The Chicago Department of Planning & Development (DPD) created three ARO Pilot Areas in 2017 to change the rules in gentrifying neighborhoods. In those areas, property owners cannot pay the in lieu fee and the baseline affordable housing percentage is increased from 10 percent.

In the current proposal for Little Village and Pilsen, the rules in those pilot areas would change the baseline from 10 percent to 20 percent, and at least half of those affordable units would have to be provided on-site. The other half could be built on-site, off-site, or not built. Unbuilt units would incur a $101,388 per unit in lieu fee in the Little Village pilot area and a $178,469 per unit in lieu fee in the Pilsen pilot area.

Another revised ARO rule is proposed for the Little Village-Pilsen pilot areas. To encourage the construction of units with more bedrooms, the ARO rules for a project would be revised to count units with more bedrooms as partially meeting the affordable unit baseline. This revised calculation would be subject to review on a project basis by the DPD commissioner and alderman.

The rule would affect zoning change applications and Planned Development applications submitted on or after January 1, 2019.

MAPS can help property owners and architects understand all of the Affordable Requirements Ordinance regulations through our pre-development services or an on-site seminar. We can also help you determine the geographic applicability of these pilot areas to your property as well as conduct an Incentives Checkup to find potential financial & development incentives.

 A map of the proposed Pilsen ARO Pilot Area via  Chicago Cityscape

A map of the proposed Pilsen ARO Pilot Area via Chicago Cityscape

 A map of the proposed Little Village ARO Pilot Area via  Chicago Cityscape

A map of the proposed Little Village ARO Pilot Area via Chicago Cityscape

The pilot areas in the maps shown are approximate, as the ordinance hasn’t yet been introduced.