"Affordable" for Whom??? Yet another TIF Abuse

The Chicago Sun-Times has a story about yet another example of how Chicago abuses Tax Increment Financing as a slush fund for Mayoral and Aldermanic friends and donors. This time it's about so-called "affordable" housing around the Maxwell street destruction ... er ... UIC redevelopment.

Another recent TIF atrocity was handing money to the "blighted" building formerly known as Sears Tower. For a sampling of past TIF abuse, see the Reader's TIF archive.

Beyond the now-familiar process of using public power and resources (TIF, zoning changes, etc.) to make powerful friends rich, the Suntimes finally uses some ink on the question NA4J folks have been asking for over a decade:

"Affordable" for whom????

The key basic questions on all public policy proposals should be:
* who benefits?
* who pays?
* are there other ways to achieve stated goals?

In the case of TIFs and redevelopment, the system is rigged to favor insiders, liek the people that buy "affordable" housing as an investment and them flip them for easy, politically-generated profit. Like the woman that made $29,000 without even moving into a subsidized townhome (she already owned two). The flippers made an average profit of $63,000.

Beyond the question of the politically connected gaming the system is the broader policy question of "affordable to whom"? Many gentrifying development deals include some kind of "affordable" component to alleviate community opposition. these so-called 'affordble' units are key aspects of why the deals are supposedly in the public interest.

But housing advocates have been arguing for decades that the city uses "affordability definitions that defy any logic.

For example, to qualify for 'affordable' units at University Village, a 4-person family's income must be below $75,000 per year -- which is considered 'low income' if one uses the metro region figures. Costs -- rent or purchase prices -- are not based on one's income, but on a formula based on the median income -- of the metro region.

The median household income (regardless of household size) in the city of Chicago was about $45,000 in 2007.

Using the formula based on the metro region means that many so-called 'affordable' units are priced for residents with the highest 15-20% of incomes.

The TIF reform referenda that passed overwhelmingly in sample precincts emphasize that housing produced should be affordable to households below that community's median income.