Yesterday, the Chicago City Council approved an Ordinance amending the Vacant Building TIF Purchase and Rehabilitation Program. Not only does the program include provisions to assist first-time homebuyers who wish to purchase and rehabilitate homes in TIF areas but it now also allows developers to receive TIF funds to purchase and rehabilitate multi-family residential properties to be used for affordable rental housing.
The original Vacant Building TIF Purchase and Rehabilitation Program was designed to provide TIF funds to first-time homebuyers with household incomes of no more than 100% of the Primary Metropolitan Statistical Area median income (approximately $75,000 for a household of 4) to purchase and substantially rehabilitate eligible residential properties located in TIF districts. Under the program, eligible homebuyers could receive TIF funds in amounts up to 25% of the total cost to purchase and substantially rehabilitate the residence. A homebuyer receiving assistance would be required to use the home as a primary residence for a period of time determined by the amount of assistance received.
Yesterday’s Ordinance also allows developers to receive TIF funds to purchase and substantially rehabilitate eligible multi-family residential buildings. In order for a multi-family residential building to be eligible, the building must include six or more residential units and must be vacant, in need of substantial rehabilitation and be located in one of the City’s approximately 150 TIF Districts. Eligible projects could receive up to 50% of the total cost to purchase and substantially rehabilitate the residential building. The amount of assistance would be based on the percentage of rental units affordable to households earning no more than 50% of the Primary Metropolitan Statistical Area median income (approximately $37,500 for a household of 4). A regulatory agreement would be recorded against the property to ensure that those units would remain affordable for a minimum of 15 years.
The amended Vacant Building TIF Purchase and Rehabilitation Program may be a nod to proponents of the failed Sweet Home Chicago Ordinance, which would have required a 20% set-aside of all TIF funds generated in the City to be used for affordable housing projects. Illinois TIF law does already include a provision that permits TIF funds to be used to pay for up to 50% of the costs of constructing or rehabilitating affordable housing units, but this amended City Ordinance may provide a broader policy framework to help such rehabilitation.