Naperville council prefers voluntary affordable housing policy

In its consideration of an affordable housing policy for new residential development, the Naperville City Council is leaning toward incentives and voluntary parameters over mandates and penalties.

An "inclusionary zoning ordinance" is one of several action items proposed to address the city's long-standing goal of increasing its affordable housing stock. Such a policy would set guidelines for incorporating an affordable component into future housing projects, which proponents say would provide developers with direction and a clarity of vision that has been lacking in the city's existing code.

But during a workshop this week, Mayor Steve Chirico and several council members expressed concerns about the potential unintended consequences of affordable housing requirements and the uncertainty of their success.

"This type of a policy can kill a development altogether," Chirico said. "We have to be careful about that. ... These types of decisions have a long-term economic impact on our community in terms of the businesses and organizations that are potentially going to invest in Naperville."

Councilman Ian Holzhauer suggested taking a voluntary approach that would incentivize affordable development rather than require it. That could include offering leeway on a project's density or streamlining the approval process for builders who incorporate affordable units into their plans.

"I do think our community has raised this issue enough that they'd like to see some action by the council," Holzhauer said. "My hope is this is a compromise proposal (that shows) we're listening to what they have to say and trying to do something that moves the ball forward."

A work plan adopted by the council earlier this year directed staff members to begin exploring an inclusionary zoning ordinance. Other action items included preserving naturally occurring affordable housing and establishing a rehabilitation loan for low-income seniors.

The city hired consultant SB Friedman to assist with the process, the first steps of which included seeking feedback from developers and analyzing ordinances adopted by comparable communities nationwide. Policies vary in terms of the affordable unit count or percentage requirements, compliance, applicability, and mechanisms to offset the impact on developers, said Fran Lefor Rood, the firm's senior vice president.

Councilwoman Patty Gustin said she believes adopting such a measure is unnecessary. City officials have found success working directly with developers to incorporate more affordable options into their proposals, she said, pointing to a $200 million mixed-use campus near Route 59 and I-88 in which developers added 82 micro-units before final approval.

"To be quite honest, it's a solution looking for a problem, and we don't have a problem," she said.

An inclusionary zoning ordinance - even a voluntary one - would set a framework for the city's affordable housing goals and give staff members the flexibility to work with developers from the start, Councilman Patrick Kelly said. Though he would prefer creating more strict requirements with a "fee in lieu" option for developments that don't include affordable units, he said, "I think it's important that we have some movement here as opposed to nothing."

Getting a policy on the books would allow the city to set its housing goals and define affordability in its own terms, versus following state and federal formulas, Naperville staff members said.

But first, Councilman Benny White said the council needs to answer two key questions: "What are we trying to accomplish? How are we defining success?"

Staff members plan to work with SB Friedman to explore voluntary policies and incentive programs before bringing the concept back to the council.