The nascent Chicago Department of Housing wants to clarify the city’s Low Income Housing Tax Credits rules for multi-family housing developers and tweak them to encourage development of more deeply affordable housing. LIHTC (lie-tech) is the biggest source of funding for long-term affordable housing construction in the country. Both non-profit and for-profit housing builders use it to add private investment equity to a project's capital stack. 

DOH has issued a proposed Qualified Allocation Plan (QAP) that adds new standards and incorporates new criteria to judge applications. Cities and housing authorities across the country use QAPs to explain how they will score applications for LIHTC. DOH “is optimistic about funding” in the 2020-2021 allocation period up to eight projects at the 9 percent level and up to four projects at the 4 percent level.

New this year (due to change in federal law) is allowing projects to have "income averaging". Rather than having all affordable units set aside for households earning up to 60 percent of the area median income (AMI), developments can have groups of units targeted to different household income levels. For example, a project could have deeply affordable units – affordable to a household earning up to 30 percent of the AMI – and units rented to households earning up to 80 percent of the AMI as long as 40 percent of the units in the development will be rent and income-restricted and the average income limit for all units is 60 percent of AMI or less. 

Relatedly, projects that provide for deeper affordability – including the income averaging approach – will be prioritized higher. Proposed developments that exceed the 30-year affordability period and those that are in Qualified Census Tracts and contribute to a "concerted community revitalization plan" will also be prioritized higher. 

Other ways to design a preferred proposal include:

A map of Opportunity Areas in Chicago.

  • Including ground floor retail or commercial spaces "to provide needed neighborhood amenities". Applicants can take a step further by having a plan or partner to fill the space within six months. 

  • Locating in a "Transition Area" or "Difficult Development Area" (DDA). The definition for transition area sounds like a way to describe gentrifying neighborhoods. DDAs are determined by the U.S. Department of Housing and Urban Development to show where land or construction costs are prohibitively high.

  • Locating the project in an Opportunity Area (see map to the right). Chicago Housing Authority identifies areas with low poverty rates (which translates to better economic outcomes for a person or household) to determine where more affordable housing in higher income areas should be built.

  • Locating the project in a TOD area.

  • Serving a vulnerable population with supportive housing, including for the homeless, veterans, people with disabilities, and people who were recently incarcerated.

MAPS can prepare maps that show vacant and re-developable properties in the geographies listed above as part of our Pre-Development site selection service. 

Send comments on the proposed QAP by September 5, 2019. The final rules will be issued September 9, and applications will be due October 11, 2019.

Photo of Rosa Parks Apartments by Jeff Zoline. The Rosa Parks Apartments are a multi-site development in East Garfield Park/Humboldt Park, built by Bickerdike and supported through LIHTC.