As home prices soar in the suburbs, communities struggle to meet affordable housing goals

As housing prices continue to rise, a recent report indicates several suburban communities have failed to meet state requirements on affordable housing plans.

Municipalities that fail to meet the 10% threshold for affordable housing are required to submit a plan outlining how officials hope to address the issue to the Illinois Housing Development Authority.

Of the 44 communities that did not meet the threshold, 16 did not submit a plan, according to a report by Impact for Equity, a Chicago-based nonprofit focused on legal and policy issues.

Geneva is one city on the list — a first for the Kane County community. According to IDHA’s 2023 report, Geneva fell short of the threshold with only 7.3% of its housing stock in a range considered affordable.

While Geneva has found itself short of the 10% threshold in previous reports, this is the first time the city has not filed an action plan with IDHA, according to Geneva Mayor Kevin Burns. This time, however, the city indicated to the state that it is working on a comprehensive plan update that will include a section on affordable housing.

Other suburbs that did not submit plans include Barrington Hills, Elmhurst, Hawthorn Woods, Inverness, Lincolnshire, Oak Brook and South Barrington.

Geneva receives inquiries from affordable housing developers, Burns said. But once they start looking at available land, they often back off.

“What we hear regularly is that the cost of land is often the biggest detriment to moving forward,” Burns said.

Other communities echoed a similar sentiment as to why affordable housing is difficult to locate in their community.

In Oak Brook, for example, land prices can top $1 million an acre. According to the IDHA report, only 6.6% of the DuPage County community’s housing stock is considered affordable.

“With the price of land in the community, it (affordable housing) couldn't exist without some level of subsidy,” Oak Brook Village Manager Greg Summers said.

Housing experts say housing costs should take up no more than one-third of the household income. Based on median incomes for the region, affordable housing in the Chicago metro area should equate to rents no more than $1,181 a month or mortgages no more than $1,575 a month, according to Impact for Equity.

IDHA surveys communities across the state every five years for affordability. Since 2008, the agency has seen its list of communities missing the 10% mark shrink by a total of 24.

In 2023, the last year the agency compiled a report, four new communities, including Sugar Grove and Port Barrington, were added to its list of towns missing the affordability threshold. However, IDHA also saw six communities, including Naperville, Gilberts and Sleepy Hollow, come off the 2018 list and meet state standards for affordability.

“This is a positive step forward,” said Andrew Field, a spokesman for IDHA.

Awareness also continues to increase. DuPage County, for example, created an ad hoc housing solutions committee in 2023. The county’s budget also includes $5 million to create a land bank and community housing trust. The county has set aside money to launch a down payment assistance program.

Nonprofit groups, such as Full Circle Communities, are also finding ways to gather the layers of financing needed to make affordable developments a reality.

Full Circle built a 48-unit development in Elgin and recently broke ground on a 42-unit project in Glen Ellyn. It also has plans to build a 25-unit development in Arlington Heights. In addition to offering affordable housing to residents, Full Circle provides supportive services tailored to the residents living in each of its developments.

Despite some progress, the need for affordable housing continues. According to Impact for Equity, a nonprofit group focused on policy and legal issues, Illinois would need to add a minimum of 227,000 units over the next five years to help address housing affordability.

“There is a need for affordable housing in every community across the Chicagoland area,” said Lindsey Haines, interim president and CEO of Full Circle Communities.

“Most people know somebody who can’t yet afford a single-family home and needs an affordable apartment or someone early in their career that needs affordable housing,” she added.

Taking a look at what is being built can be helpful, said Colby Sledge, local policy principal for Grounded Solutions Network, a national nonprofit focused on community land trusts and housing options. Municipalities or other governmental entities could also look at any available land they may own as a potential site and a way to encourage developers to build affordable housing.

“If a county can come in and say we can take some of that cost burden away by providing the land … that becomes a more affordable option,” Sledge said.

Colby and others added that communities can also reduce or waive building fees and streamline the zoning or approval process to help keep development costs down. Some communities, including St. Charles, have adopted programs that require developers pay a fee if they do not meet affordability set-asides in proposed projects.

The fees are held in the city’s housing trust fund, which provides financial assistance to nonprofits that help address housing affordability, preserve affordable housing and offer financial assistance to eligible residents.