Affordable housing rules will be key factor in future St. Charles developments

In the tug-of-war between affordable housing and new residential development in St. Charles, city officials all agreed they want both.

To achieve that balance, aldermen and the city’s housing commission debated changes Monday to their affordable housing rules. However, the short history of the city’s rules show a track record of not really achieving either of those goals.

About 13 percent of the city’s housing stock was classified as “affordable” under a state law when the city first adopted an affordable housing ordinance in 2008. That same law requires every community to have at least 10 percent of its housing be affordable. Communities falling below 10 percent are at risk of the state coming in and altering their zoning until affordable housing numbers climb. Today, about 18 percent of the city’s housing stock is affordable.

But almost none of that affordable housing stock is traceable to the city’s affordable housing ordinance, according to City Administrator Brian Townsend.

“Someone asked the question in there about whether the ordinance has created affordable housing; it really hasn’t,” Townsend said in an interview. “It’s been more just a result of market conditions.”

In other words, when the housing bubble burst, home values and prices plummeted. The city instantly had more affordable housing. Townsend said if the housing market rebounded to where it was, it’s possible the city’s affordable housing stock would dip right back down to the level that concerned city officials in the first place. Indeed, Cindy Holler Larson, the chairman of the city’s Housing Commission, told aldermen Monday night that she’s recently heard from developers that they are buying up single-family homes at the new affordable prices. It’s likely the developers will revamp and sell those homes for non-affordable prices as the market rebounds, she said.

But commissioners and aldermen didn’t dwell on those facts Monday night. Instead, they debated the merits of creating a sliding scale when it comes to forcing developers to build affordable housing. Current rules require developers of the largest projects to make up to 15 percent of the new residential units they create affordable housing. Or, developers avoid the affordable housing requirement (with the permission of the city council) and pay the city $104,500 per unit they were supposed to build.

Officials appeared to favor some form of a sliding scale. Such a scale would either reduce the amount of affordable housing a project must have, or the amount the developer must pay in lieu of the affordable housing (or both) depending on overall amount of affordable housing in the city at any given time. Officials want 25 percent of the housing stock to be affordable. The closer to 25 percent the city came, the lower the requirements for new developers would be.

Every major residential development to come forward since the affordable housing rules came online has involved a request for some unique modification of the rules. Up until recently, aldermen have been OK with that. Then the Corporate Reserve project came along.

That project, on the far west end of the city, involves both more apartments and a proposal for less of a payment in lieu of affordable housing than aldermen want. Afraid of setting a precedent, aldermen have stalled the project taken up debate of the affordable housing rules instead.

Aldermen did not settle on a final format for the sliding scale Monday night. They will resume debate at a future time.

Affordable: Debate isn’t over yet in St. Charles