Affordable housing in St. Charles? Apartment developer cites ‘revenue gap’ if units set aside

A 29-acre site in St. Charles — one of the last remaining open properties in town for residential development — is becoming a flashpoint for housing affordability in the city.

With a new proposal on the table, some city officials are requesting affordable units while the project’s developers argue it would hurt their private equity-backed bottom line.

Two developments are proposed to divide up the site on the south side of Route 38, west of the Meijer grocery store.

“Springs at 38 West” would have 306 rental apartments in 12 two-story buildings and a pair of three-story buildings, as well as a clubhouse. The complex would occupy 22.2 acres.

The “Traditions of St. Charles” development would occupy the remaining 7.3 acres and consist of a three-story, 167-unit senior living facility with independent living, assisted living and memory care.

City officials previously told the developers that they prefer the site include a mix of residential options for all ages, complementing the surrounding areas. They said a priority was ensuring that teachers, city employees, health workers, first responders and working-class families can afford to live in town.

The developer of Springs at 38 West — Continental Properties, and Austin Dempsey, CEO of BEI Properties — pushed back on that notion at a recent committee of the whole meeting.

The developer of Traditions of St. Charles — the Leo Brown Group — also did not accommodate any substantial affordable units in their concept plans.

St. Charles has an inclusionary housing ordinance that requires 10% of units to be affordable to households earning 60% of the area median income, according to city documents.

While hinting that inclusionary housing could become a sticking point between developers and the city, Dempsey said any new housing should help the market.

“There’s an unmet demand in housing in our community already,” Dempsey said during the March 16 meeting. “Adding any units of any kind will help to balance and create more affordability.”

According to Continental Properties, of the 306 rental apartments at Springs, 9% are studios that will go for $1,636 per month, 40% are one-bedroom for $1,905 per month, 40% are two-bedroom for rent of $2,333 and 11% are three-bedroom units for $2,671.

The developers said they are trying to support retail along the Randall Road corridor by “attracting residents with disposable income.” City officials responded by saying there are people who work for the city who can’t afford to live there.

During the March 16 meeting, the developers said offering affordable units, such as a $1,070-per-month studio, would “provide a revenue gap.”

Alderperson Ronald Silkaitis told the developers that, while he approves of the site plan, he wants affordable housing prioritized.

“We don’t want cash donations,” Silkaitis said. “We want on-site affordable housing because there is an issue in Illinois in general for affordable housing.”

Other alderpersons echoed his concern, saying on-site affordable housing is needed because it’s one of the last sites to be developed in the entire city.

Leo Brown Group requested an exemption from providing affordable housing units. Representatives said services and amenities are built into the rental rate.

Still, alderpersons have asked how the housing could be made more affordable for seniors.

Developers indicate the total investment for both projects is around $150 million — $100 million for Springs and $50 million for Traditions.

For full approval, the site needs to be rezoned to residential, and a planned-unit development requires the city council’s blessing. The current land use is agriculture.

A new access roadway is proposed on Route 38, with secondary access via the cross-access drive south of Metro Self Storage. The St. Charles Park District is requesting the donation of a two-acre public park site on the property.