As Johnson administration touts ‘Cut the Tape,' affordable housing developers want faster progress

Yahoo

13-05-2025

Veronica Gonzalez aims to build 50 units of affordable housing and a food hall in East Garfield Park. She is a long way from getting there, though.
Her nonprofit affordable housing development firm's deal was financed by the state's federally funded tax credit program for low-income housing — an essential piece of capital to move affordable housing projects forward — in April 2024 after applying about nine months prior.
The project then went through multiple city design reviews starting in early August, which were not completed until early January 2025. She submitted her plan to the City Council in March and various departments are reviewing the proposal before it will go through about four more multipronged steps for evaluation before shovels can be in the ground.
Gonzalez expects work to begin in the second quarter of 2026 — about three years after she applied for tax credits to fund the project — and construction to be completed about 18 months later, which is standard for building apartments.
'(Developers) are all frustrated (when it comes to the process) to deliver affordable housing,' Gonzalez said, who is the Midwest director of development for the NHP Foundation. 'A lot of the costs are embedded in the cost of doing business with the city.'
Mayor Brandon Johnson signed an executive order in December 2023 to launch one of his signature agenda items, 'Cut the Tape.' The initiative seeks to reduce the bureaucratic red tape to speed up housing development and, in turn, reduce costs. Johnson convened a task force of local real estate professionals and city leaders roughly a year ago to help propel the initiative. Affordable housing professionals like Gonzalez, who is on the initiative's two-year task force, say they are happy these conversations are happening but are still waiting to see if the Johnson administration follows through on its promises.
Some are frustrated with the lack of progress a year later.
While she understands that shifting organizational culture takes time and appreciates the Johnson administration's focus on this issue, Gonzalez said developers like her signed up for an 'Army haircut' when it comes to changes in the building process, not a light trim.
As Cut the Tape efforts take shape, another Johnson housing initiative aimed at spurring affordable development was passed by the City Council Wednesday after weeks of debate. These endeavors come as Chicago, like other cities across the country, faces serious housing shortages, especially for affordable units.
Cut the Tape is a collaborative effort across various city bodies, including the Department of Housing, Department of Planning and Development and City Council.
The changes that have happened fastest were done administratively by department commissioners and did not have to be approved by the City Council, said Abby Sullivan, the mayor's office point person for departments involved in Cut the Tape. Sullivan said many changes for the affordable housing development space haven't come to fruition yet.
'Everyone that's involved in this would really like the process to be going faster,' Sullivan said. 'It would be wonderful if we could get some of these ordinances to pass quickly, but that's just not the nature of the process.'
Chicago Department of Planning and Development Commissioner Ciere Boatright pushed back on the idea that no progress has been made on the initiative in an interview with the Tribune.
The Chicago Plan Commission, in charge of evaluating development proposals, has reduced its review timeline from 135 days to 79 days, Boatright said, in a year when 37 projects worth $11 billion dollars were approved in 2024. The commission did this by reducing the number of design reviews from three to one and improving collaboration across departments.
The department is also proactively seeking zoning changes for corridors instead of waiting for large projects to be proposed for the areas. More than 1,000 properties have been or are in the process of being rezoned in the last 12 months, Boatright said.
While these rezoning efforts are happening, the planning department has speeded up its disposition of the 10,000 city-owned lots for residential and commercial development. The timeline of parcel valuations has been cut from six months to one month, Boatright said, and the previously monthslong process for a prospective buyer to survey the property by going on site now takes days. Titles to the land are being sought when a parcel is listed for sale as opposed to a few days before the close of a deal as well.
'Time kills deals,' Boatright said. 'At DPD, we are bullish on both mitigating risk and also working really collaboratively with our developers and other departments to advance these projects at a much faster, more aggressive timeline.'
The zoning change approval process has also been amended for some projects, Sullivan said, to cut out the zoning board of appeals. Over 100 projects have benefitted from that change, she said. Additionally, Sullivan said wait times for developers to get in front of the Zoning Board of Appeals have shortened, as well as the lengths of the meetings themselves, helping to reduce developers' zoning attorney fees.
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Meanwhile, Johnson has talked about the need for affordable housing several times recently. On Wednesday, the mayor offered a solution to high rents in a WGN-TV town hall appearance: 'Build more units.'
'Because the demand is so strong with limited supply, landlords and other developers are able to grow those prices,' he said.
In April, rents in Chicago increased 2.1% compared to .5% nationally, which was the fastest month-over-month rent growth of the nation's largest 100 cities, according to Apartment List. And while rents are increasing, Apartment List data shows Chicago's apartment vacancy rate of 4.9% slipped 0.7 percentage points compared to this time last year.
Affordable housing developers and their advocates who spoke with the Tribune said they face more hurdles in comparison to market rate developers when it comes to building housing. They want to be treated the same, which would reduce costs, they say.
Market rate developers get to build to city code, while affordable housing developers have to build to city code and extra standards laid out in the city's Architectural Technical Standards manual.
'It makes us feel like the same level of trust is not given to the affordable housing developers that is given to the market rate developers,' Gonzalez said.
In response to a question about why affordable housing developers have to build to extra standards, the Chicago Department of Housing said in a written response that lower income residents don't have as much power to choose where they live or to move if the 'quality of their home degrades for reasons outside of their control' as market rate tenants do.
'Every Chicagoan regardless of their income deserves a respectable home, which to me absolutely includes sufficient countertop and storage space for the size of their family,' said Chicago Department of Housing Commissioner Lissette Castañeda. 'So, we believe it is imperative to establish and enforce these standards. … We are actively working to better simplify, clarify, and effectively communicate these policies to all stakeholders.'
Real estate professionals said they are eager to see changes to the city's architecture standards manual. The housing department is in the process of 'overhauling' this manual, according to an April memo sent by Castañeda to the Chicago affordable housing development community. The department's staff received feedback on the manual through a yearlong steering committee that broke off from the Cut the Tape task force, as well as from other city and state housing bodies.
A draft of the new standards are expected in June, the memo said, with a final manual coming this fall. The memo said some changes could be to the general contractor bidding process and the removal of the required third-party construction cost estimate.
Members of the Chicago real estate community said they were happy to see the city release this update, but the memo is not tangible policy changes.
'A year is a long time to be talking about an issue while hundreds of thousands of Chicagoans struggle to pay rent,' said Cat Vielma, a member of the mayor's task force and director of acquisitions for Red Stone Equity Partners, a firm that brokers public and private partnerships for developers who receive Low Income Housing Tax Credits, like Gonzalez.
Castañeda said that due to the manual's importance, the department is focused on 'making sure we get it right … and doing that work to get it right takes time.'
In her role, Vielma helps developers sell their tax credits to banking institutions so the firms can more rapidly secure the financing they need to build. She said she is unable to tap into a certain type of financing for Chicago developers because of a lengthy, and, in turn, costly, part of the city's requirements for developers' economic disclosure statements, causing developers to not have access to billions of dollars in capital annually.
The main issue with the statement, Vielma said, is the section that asks developers (and any city contractors) and their funders if they have records indicating if they have ever invested in or profited from slavery.
'That response takes hundreds of hours of diligence and costs and is a question that no other city or state requires,' Vielma said. 'This is a great example of what a city can do that adds costs and stifles private capital from working here.'
A mayoral spokesperson said in a statement that as far as the mayor's office knows, no group has been denied city funding as a result of reporting this information. Per the section's guidelines, the purpose of question is 'to promote full and accurate disclosure to the public about any slavery policies sold by any companies, or profits from slavery by other industries (or their predecessors) who are doing business with the city.'
The statement did not address the Tribune's question about the future of this requirement.
Sullivan from the mayor's office said the timeline for receiving tax credits should be reduced in the next round because the preliminary project assessment application has been shortened. The burden on developers for the application process, she said, should also be diminished. The housing department said it does not expect the timeline to shift much, but it does expect the application process change to 'reduce work for developers.'
Allison Clements, a member of the task force and executive director of the Illinois Housing Council, a membership association that represents organizations involved in affordable housing development, said there have 'definitely been some wins' for developers through the mayoral initiative.
'I think the fact that the city is paying attention to this entire effort is really, really important and a long time coming,' Clements said, especially given the increasingly challenging construction climate because of President Donald Trump's trade wars and higher interest rates.
But, she said, there is 'still work to do.'
Chicago Tribune's Jake Sheridan contributed.
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