Affordable housing development in Batavia gets first green light from city: ‘I think this is something that we need'

Chicago Tribune

3 hours ago

A proposed subsidized multi-family housing project in Batavia recently received the first green light from members of the City Council, many of whom are touting the project as filling a gap in affordable housing in the city.
On May 19, the Batavia City Council OK'd a request from the project's developer — Fox River Affordable Housing, a nonprofit arm of the Housing Authority of Elgin — to fund $1.2 million in land acquisition and engineering costs using the city's TIF, or tax increment financing, reserves, per a memo from the city's Community and Economic Development Director Scott Buening included in the meeting agenda.
The total cost of the project is expected to be just over $24 million.
Called The Residence at River Point, the proposed project is set to be built on the 400 block of South River Street, which officials say is a former limestone quarry site.
The proposed development would include 72 units, according to a proposal included in the City Council's meeting agenda. Of those, 18 would be set aside for households earning at or below 30% of the area median income, or AMI. In addition, 38 units would be set aside for households earning at or below 60% of the area median income, and 16 for those earning at or below 80%.
The area median income is a regional calculation and accounts for the Chicago metropolitan area, according to the Housing Authority of Elgin's Executive Director and Chief Executive Officer Martell Armstrong.
According to Chicago's Department of Housing, the median family income for the Chicago-Joliet-Naperville metropolitan area was $119,900 for a family of four in 2025. Income limits related to the AMI are adjusted for family size, however. For example, a single individual could qualify under the 80% limit if they made $67,100 or less, and under the 30% limit if they made $25,200 or less, whereas a family of four would qualify under the 80% limit if they made $95,900 or less, or $35,970 for the 30% limit.
The project was generally well received by City Council members, who at recent meetings cited a need for more housing of this variety in the area.
'When I got my first apartment, it looked an awful lot like this,' City Council member Dustin Pieper said at a Committee of the Whole meeting in May. 'There's definitely a need for that. Especially in our community, there's a lot of younger folks who want to be working here, want to be living here. This would be great for that, I think.'
City Council member Alan Wolff said not enough of this sort of housing is being built in the area, and that restrictions on constructing multi-unit buildings may be partially to blame.
'I think this is something that we need,' he said.
According to a 2023 statewide report from the Illinois Housing Development Authority on the Affordable Housing Planning and Appeal Act, Batavia's share of affordable housing — defined as being within the means of homebuyers making 80% of the regional median household income or renters making 60% of the regional median household income, per the authority — was at 23.5%. That's well above the 10% threshold that requires communities with low levels of affordable housing to submit a plan to the state as to how they'll build out a diverse housing supply. In Kane County, for example, Campton Hills, Lily Lake and Geneva all fell below 10%, according to the report.
However, the percentage of affordable housing stock in Batavia is still significantly lower than some of its surrounding cities, like Aurora and Elgin, whose affordable housing stock is each over 50%, according to the 2023 report.
A shortage of multi-family housing is not unique to Batavia, said Thomas Skuzinski, an associate professor at Northern Illinois University's Department of Public Administration, whose work focuses on local government management and who has previously done research on affordable housing.
'There's not as much multi-family (housing) as there could be,' Skuzinski said. 'There is just overall an imbalance that strongly favors single-family, detached homes. And that's pretty consistent across the U.S.'
And an uptick in young adults who deferred moving out of their family homes during the COVID-19 pandemic and a growing population of seniors on fixed incomes has only intensified the demand in the past few years, he said.
Local officials' concerns
While there was generally support from the city about the project, council members at the recent Committee of the Whole meeting also outlined some of their stipulations related to the project in Batavia.
City Council members Kevin Malone and Abby Beck, for example, said they wanted to ensure the final product prioritized biking and pedestrian safety and accessibility. Jim Fahrenbach said he would support the project if it went through, but he thought too few of the units were allocated for those earning 80% of the average median income and noted that none of the proposed units were market-rate.
'We have lost a pipeline, and the question is, 'How do we replace that?'' Fahrenbach said. 'A lot of this neglect of having these apartment complexes for folks to come in in their 20s and enjoy the community and grow into the community and then save for a home, is gone. So we need to replace it.'
Fahrenbach told The Beacon-News it's well-known that Batavia needs more affordable housing, and said that this project, while it doesn't provide market-rate units, could increase development activity in the area and spur on market-rate projects.
All of the units in the proposed project would have income-related stipulations, though the rent price tenants pay would be determined individually by the tenants' income and number of people in the household, Armstrong told The Beacon-News. The actual costs of the units are based on the size and number of bedrooms — about $315,000 per unit is what they're expecting.
In terms of the project's classification, Armstrong also noted that 'affordable housing' is more of an umbrella term, and referred to the project as having an 'income mixing range' of 30% to 80% of the AMI. 'Workforce housing,' he explained, tends to refer to housing for households making 60% to 80% of the AMI.
Batavia Mayor Jeffery Schielke noted that the limestone in the area might make the site challenging to build on and add possible unaccounted-for costs. But there have not been many affordable housing projects in Batavia in recent years, he told The Beacon-News, and he believes the demand is there for this sort of project.
And the project could put that land to good use, Malone said at the May 19 City Council meeting and 'turn a literal rock field into someplace people can live.'
Funding the project
But, despite securing an early stage of city approval, the money isn't to be spent yet on the project, City Council members clarified before approving the request for the TIF funding. It's merely a promise of funding down the line, once the project is determined to be feasible. Armstrong said at a meeting with the City Council that Fox River Affordable Housing needed this promise from the city in order to submit its application for the Illinois Housing Development Authority's Low Income Housing Tax Credit, which he said would provide the project with a considerable portion of its total funding.
The TIF money that the developers plan to use is also to be paid back to the city, in a way. Assuming the project continues, the city would allocate the $1.2 million, which would go toward the purchase of the land set at about $1 million along with soft costs like engineering and architectural plans, according to Buening. The city's approval is conditional on the proposal being taxable, Buening said, and its proposed location is within the city's TIF District 3, meaning it would generate TIF funding.
Essentially, a TIF district freezes the amount of property tax revenue each taxing body receives from an area at the point at which the TIF is instituted. The extra or 'increment' taxes created by the development of the property go into a special fund used to pay for costs related to improving the area.
The goal is to secure the land by the end of this year and begin construction immediately after, Armstrong said. But whether the project moves forward at all, he said, is contingent on the project being awarded the Low Income Housing Tax Credit developers are applying for.
The Low Income Housing Tax Credit is a dollar-for-dollar federal tax credit, according to IHDA's website, that helps move affordable housing projects forward. The maximum rent that can be charged on a property that receives this tax credit is 80% of the AMI — which is why there are no market-rate units in the proposed development. Rents are typically capped for a 30-year period in Illinois.
What's next?
Armstrong said that Fox River Affordable Housing and Housing Authority of Elgin expect to hear back about whether they've been awarded the tax credit later in June. He said the project would likely not be able to move forward without that funding source.
The developers also have to enter into a redevelopment agreement with the city, Buening noted, and go through the zoning process.
Should all go as planned, Armstrong said, the project's aim is to close on a deal for the land by the end of the year and immediately begin construction, as long as there are no major obstacles that push back their timeline.
There are several factors that can slow down affordable housing projects, Skuzinski noted.
In general, gaining public and city support for projects can require overcoming negative perceptions of affordable housing developments.
'There's a perception that property values go down whenever an affordable housing project or even a mixed-income project … go in, and that's just not true,' Skuzinski said. 'It has more to do with the design of the building, sort of what it looks like, how well it's managed.'
Additionally, because affordable housing developments tend to have slimmer profit margins and less options for obtaining loans, Skuzinski noted, the loss of one source of funding can slow down or jeopardize the project.
Amid discussion of the project at a meeting in May, Malone inquired about the availability of federal funding with regards to the project.
Low Income Housing Tax Credit is a federal funding source that's allocated by state agencies, in this case the Illinois Housing Development Authority. But, while President Donald Trump's administration has slashed the budgets of a number of government programs, the housing tax credit appears to be safe for now. It could potentially even see an influx of cash if the Senate leaves that part of the recently passed House of Representatives' budget bill as is.
Federal funding aside, Armstrong said the costs of materials and labor and interest rates have all driven up the price of construction since the pandemic, and they've made the Housing Authority of Elgin move more slowly and be more selective with what projects it takes on. And the added uncertainty of possible tariffs could also change their plans or slow progress.
And, for the housing authority, unlike developers intending to sell their developments, there's also the added component of managing the property.
'We are generally in it for the … lifespan in the building,' Armstrong said.
That's something the Housing Authority of Elgin wants to do more of, he said. It currently manages 164 units of Low Income Housing Tax Credit properties, he noted, but have a third-party entity that manages some of its other properties. They've also co-developed some projects, but intend to be the sole developer on the Batavia units.
Armstrong said the authority worked with the city of Batavia to identify this potential project and the proposed location.
'I'm not in the business of going somewhere and telling them what's good for them,' Armstrong said.
But the housing authority is willing to work with cities which identify a need for affordable housing, he said.
And, with projects like these, he said one of its goals is helping individuals of different income levels live in the same community.
'We're trying to deconcentrate poverty and do this in areas of opportunity,' Armstrong said, 'where people can have pride and lives in areas that provide jobs and education and so on.'
These kinds of projects are one way of supporting social mobility for both low-income and working class individuals and families, Skuzinski noted.
'There can be a benefit to allowing for social networking and ties across income classifications,' Skuzinski said. 'One of the best ways to do that is either through affordable housing projects that are in higher-income neighborhoods, or through projects that are themselves mixed-income. And it seems like the one in Batavia's trying to kind of do both.'
And, despite the challenges affordable housing projects bring, he said he thinks this project is well-positioned to move forward.
'When you have professionalized local governments working with a developer that's well-known, that's when these can be a recipe for success,' Skuzinski said. 'Why wouldn't you want to go ahead with something like this?'