Low Affordability Community (LAC) Ordinance

To respond to the community’s need for more housing and especially more affordable housing in the 48th ward, Alderwoman Leni Manaa-Hoppenworth is introducing an ordinance to designate the 48th ward as a Low Affordability Community (LAC). The LAC designation is a state tax incentive program that works together with Chicago’s affordable housing requirements (ARO) to build right-sized, mixed-income housing for the 48th ward community. The purpose of the LAC designation is to provide incentives to build affordable housing in communities that need it.

• The purpose of the LAC designation is to help stimulate new construction of mixed-income housing where we need it most. The city is short 120,000 units, and this is our community’s opportunity to encourage sustainable development along our transit-rich Broadway corridor.

• ARO and the LAC designation work together to ensure that any future housing built along Broadway will be mixed-income. The ARO alone does not encourage housing to be built on Broadway. Designating the 48th ward an LAC will incentivize at least 20% on-site affordable housing in all developments with 7 or more units. These affordable units can also be part of the Housing Choice voucher program to ensure that we also provide housing for our very low-income families.

• The LAC designation encourages investment in our vacant lots and gradually adds to the property tax base. The LAC designation creates an incentive to build housing by offering tax benefits that phase out over 30 years. For the first three years, the developer pays a base property tax using the assessed value of the property the year before the permit is pulled. In the following 27 years, the developer pays an increasing amount of property tax that is the base property tax plus a percentage of the increase in assessed value. This percentage increases in phases from 20% to 80%.