A new report by the Sweet Home Chicago Coalition examines the role that TIF dollars could play in alleviating the effects of foreclosure in Chicago neighborhoods. The report, entitled “A Drop in the Bucket” was released earlier this month and explores how uncommitted tax increment generated in Chicago’s 159 TIF Districts could be used to complement the Neighborhood Stabilization Program (NSP), Chicago’s primary source of funds available for neighborhood redevelopment in the wake of residential foreclosures.
According to the report, City TIF Districts which contain at least 50 residential foreclosures have uncommitted TIF funds in amounts estimated to be between $19 million and $761 million available over the remaining life of those districts. The report found that using TIF funds to construct and rehabilitate affordable housing in addition to or in place of NSP funds would be advantageous because TIF funds allow for increased flexibility as compared to NSP funds. NSP funds are governed by federal requirements that limit the use of the NSP funds and the period such funds are available.
The Sweet Home Chicago Coalition report is part of an on-going effort to urge the Chicago City Council to adopt an Ordinance that would require the City to provide an amount equal to at least 20 percent of the aggregate tax increment collected through the TIF Districts in the City during a fiscal year for the development and preservation of affordable housing in the next fiscal year. If approved, the Ordinance would require the City of Chicago Department of Community Development to inform residential developers of the availability of TIF funds and for developers to submit proposals to construct or preserve affordable housing. The Ordinance would require that the affordable housing rental units remain affordable in perpetuity. The Chicago Community Land Trust would control the owner-occupied affordable housing units.
The Ordinance was introduced in March and referred to the City Council Joint Committee on Finance and Housing, where it was debated during a July meeting. There has been no further City Council action on the Ordinance.