Recommendation: Match regional and local housing supply with types that residents want

Addressing barriers to housing choice requires support from municipal leaders, community-based organizations, and residents. Such buy-in can be hard to get. No individual organization in our region has the alignment of mission and capacity to single handedly cultivate support for expanded housing options in general, and for affordable housing in particular. Certainly, CMAP alone does not. But the work of Impact DuPage, DuPage United, and Lake County United shows promise, and all three rely on a similar approach: creating local support for additional housing types through grassroots organizing often led by religious organizations, social service providers, and concerned residents.

Changes in demographics and consumer behavior are transforming the types, locations, and price points of people’s housing preferences. Evidenced in the earlier chart showing the proportion of permitted new housing units in the Chicago metropolitan statistical area by units in structure, the region is changing from building mostly single-family detached units to an equal balance of the multi-unit developments. This change is occurring in many parts of the region — not just the City of Chicago — reflecting the demand for more housing options. To prepare for continued shifts, communities should be planning for future housing needs. By forging consensus on which housing types should be developed locally, communities may avoid the contentiousness that can ensue when the public reviews a specific development proposal that has caught residents by surprise. Such planning can also help local leaders understand the relationship between community desires and market realities. And especially when the plans cross jurisdictions, they can help multiple communities come together to create unified responses to mutual challenges. The recently developed Regional Housing Solutions website provides local stakeholders with proven market-specific tools to address pressing local housing issues.^{{{Regional Housing Solutions, 2017, https://www.regionalhousingsolutions.org.}}}

Yet planning alone is not enough. Meeting regulatory requirements is often a sequential process, with the cost of each added step driving up home prices. Through zoning, entitlement processes, and building codes and inspections, municipalities’ and counties’ choices shape the types of housing that can be built and preserved. These and other regulations can limit housing options that the market might otherwise provide. Sometimes these effects are the intentional or necessary results of community health and safety regulations or the outcomes of an established local vision. But in many cases, the regulatory barriers are unintentional and have consequences that the community does not desire. To gain the full benefit of good planning, communities must align zoning codes, entitlement processes, and potentially building codes and inspection processes with the local vision established through good planning.

Between 2015 and 2050, CMAP projects that the region’s senior population will increase by 880,000 people. Residents over the age of 75 are anticipated to more than double.^{{{Chicago Metropolitan Agency for Planning, “Draft ON TO 2050 Socioeconomic Forecast,” 2016, http://www.cmap.illinois.gov/onto2050/socioeconomic-forecast.}}} In addition, about 800,000 residents currently (10 percent of the population) report a disability. That figure will grow as the population ages and as people with disabilities transition from congregate care settings into home and community-based service settings.^{{{Chicago Community Trust, “Disability in the Chicago Region,” 2015, https://cct.org/wp-content/uploads/2015/05/InformAndAct_DisabilityChicagoRegion.pdf.}}} These changing demographics will only further increase the need for senior housing, accessible housing, and housing with easy access to services and amenities in our region.

Three concepts are central to increasing the amount of accessible and senior housing. First, the region needs new accessible units. Local accessibility/visitability standards, like those adopted by Bolingbrook, help communities create new accessible units.^{{{Accessibility/Visitability Requirements, Home Grown, https://www.metroplanning.org/homegrown/case.aspx?case=accessibility-visitability-bolingbrook.}}} Second, improving existing homes will allow disabled persons and seniors to find homes that meet their needs. Home modification programs, like the Handyman program offered by the Northwest Housing Partnership, can address issues in existing homes.^{{{Handyman Program, Northwest Housing Partnership, http://www.nwhp.net/nwhp-programs/.}}} Finally, accessibility is about more than just the ease with which a person can move in and around their home. Location and transportation matters too. Housing in walkable neighborhoods with nearby shopping, employment, health care, and bus and rail service helps people access daily needs as well. Pursuing all three paths is an important part of ensuring that communities offer a diversity of accessible housing options in amenity-rich locations. See CMAP’s Aging in Place whitepaper for a set of housing and community strategies to support the region’s growing senior population.^{{{Chicago Metropolitan Agency for Planning, “Aging in Place” 2016, Housing.}}}

While smaller in comparison with the private lending market, a number of federal, state, and local subsidy programs (Community Development Block Grant, Illinois Housing Trust Fund, Low Income Housing Tax Credits, etc.) are also critical to financing of housing. In an age of limited resources, including cuts to some of these funding sources in recent years, the managers of federal, state, and local subsidies should continue to improve the efficiency, effectiveness, and coordination of their programs.

Markets that fund housing are the most critical piece of the resource puzzle and important arbiters of housing stock and availability. While decisions on individual loan applications obviously influence what is built or rehabilitated, many factors underlie those decisions, including federal funding and regulatory determinations, along with the risk perceptions of public and private funders. National research shows that federal housing rules favor homeowners over renters and single-family homes over multifamily homes, creating policies that prevent markets from responding to changing demand.^{{{Chicago Metropolitan Agency for Planning, “Housing Choice,” 2017, https://cmap.illinois.gov/wp-content/uploads/Expanding-Housing-Choice-strategy-paper-1.pdf}}} For example, the U.S. Department of Housing and Urban Development, Federal Housing Administration, and Fannie Mae and Freddie Mac programs limit the amount of non-residential space allowed within developments as a condition for receiving federal financing or loan guarantees, thereby making it difficult to finance construction and renovation of low-rise, mixed-use buildings. Many private lenders use risk assessment criteria based on the federal regulations, meaning that mixed-use projects not seeking federal financing or loan guarantees can still be affected. While many different laws and regulations influence the market, it is not yet clear which are most influential in our region. CMAP will determine which aspects of federal regulations are the most substantial barriers to the pursuit of housing choice and promotion of compact, mixed-use housing in metropolitan Chicago and outline local, regional, state, and federal strategies to address these barriers.