Libertyville considering affordable housing requirement; ‘People were very concerned ... their grandkids would never be able to afford to live here’

Future housing developments in Libertyville could be required to market at least 15% of their units at affordable prices, if an attainable housing ordinance is approved by the Village Board.

Under the ordinance, all new residential developments that contain 10 or more units will need to have at least 15% of the total number of units at affordable rates. The Village Board would be required to approve a developer’s attainable housing plan.

The board will also need to decide which version of the ordinance to approve: the original text drafted and approved by the Human Relations Committee (HRC) in 2021, or a modified version that offers developers several alternatives for compliance and states the conversion of rental property to condominiums is no longer required to comply with the ordinance.

At least a dozen residents and several members from the HRC voiced opposition to the changes and requested the ordinance be returned to the original language at a Plan Commission meeting in September, and again at the Oct. 23 meeting.

Recently, the Plan Commission recommended the ordinance to the Village Board in a 5-1 vote, and suggested the board restore the two key provisions from the original draft.

“I think (the Plan Commission) recognizes the fact that those two provisions that we had put in originally were the right call,” said Jennifer Rich, who helped draft the ordinance on the Human Relations Committee. “They were what we needed to be able to actually have the best chance of getting the units that the people of Libertyville say they want.”

As of 2022, affordable rent for Chicago metro area households making 60% of the area median income — about $58,000, according to the Chicago Metropolitan Agency for Planning — is $1,173 for a 1-bedroom unit, according to data from the Illinois Housing Development Agency (IHDA).

An affordable purchase price for an owner-occupied home would be about $162,000, according to the IHDA.

In the revised version of the ordinance, developers are offered alternatives to complying with the ordinance, including paying a fee, building off-site units or donating land.

The original draft required the applicants to build on-site units, or request an alternative from the Village Board.

Rich was not in favor of codifying the alternatives, because it leaves the decision up to the developer, rather than the Village Board.

“It takes away the power from us as residents in the village to actually get the thing that we wanted, which was the physical units,” she said.

Libertyville’s Director of Community Development John Spoden said funds collected in lieu of setting aside a percentage of units would likely be used to partner with Community Partners for Affordable Housing (CPAH) to build affordable units scattered throughout the community. No formal contract with CPAH is in place at this time.

A memo from the Libertyville community development department to the Plan Commission stated that having multiple compliance options is “typical and desirable” from research and other community experience.

In Highland Park, an affordable housing ordinance mandates 20% of all developments of five or more units to be affordable. Cash payment in lieu of the requirement is permitted for some of the units if the development is a single-family, detached development that has no more than 19 units, or if the City Council approves a payment. In 2023, the in-lieu-of rate was $185,400 per unit in Highland Park.

An additional change to the original Libertyville ordinance was to remove the clause that required any apartment-building conversions to condominium units to comply with leaving 15% at attainable rates.

The change was recommended because conversions from apartments to condos do not happen often, Spoden said.

The thought behind requiring condominium conversions to comply with attainable housing was to protect residents of the apartment units who wouldn’t be able to afford the condos, Rich said.

“On the HRC we were thinking, how do we at least try to build in some protection for affordability for those units, knowing that those folks are really integral to our community,” she said.

There were some changes to the ordinance the Plan Commission did agree with, including increasing the number of units which triggers the ordinance from five to 10, and the addition of a density bonus which would allow developers to build one additional market-rate unit for each attainable housing unit on site.

“We’re just pleased to be at this point, that we have a positive recommendation from the planning commission and we’re anxious to get it up to the Village Board,” Spoden said. “We’ve been discussing this for years.”

A final decision from the Village Board on the ordinance is not yet scheduled, Spoden said, but will be on the agenda after the minutes from the Plan Commission are approved, likely before the new year.

In 2019, the Libertyville Human Relations Committee was instructed to develop an attainable housing ordinance after the village’s comprehensive plan found that there was a need for diverse housing stock.

Based on data from the Illinois Housing Development Authority, housing units that are owned in Libertyville were generally considered affordable.

However, 22% of owner-occupied units and 40% of rental units were unaffordable for residents, meaning people were spending more than 30% of their income on housing costs.

At least 17% of Libertyville renters were severely cost-burdened by their housing costs, spending more than 50% of their income on living expenses, the data from IHDA showed.

Given the lack of variety in the housing stock, the plan noted people outside of the upper income levels may struggle to find appropriate housing that is not a financial burden.

The Human Relations Committee drafted the ordinance informed by survey results from residents, conversations with developers and other stakeholders, and information from the village’s comprehensive plan which called for more diverse housing stock for the changing population.

“Far and away the most important concern of residents of the community was affordable housing,” Rich said. “People were very concerned that their grandkids would never be able to afford to live here, that we’re losing employees — all of these concerns that people couldn’t downsize when they are retiring.”

While drafting the ordinance, Rich said the Human Relations Committee was mindful to balance the needs of the residents and developers. She thought the final draft by HRC was a good balance of those two things.

“We wanted to achieve what residents wanted, which was affordable housing, while also not scaring away developers,” she said. “We need our developer partners to be at the table with us to get this stuff done.”

Incentives for building affordable units were part of that balance, such as waivers for application fees, building permit fees, demolition permit fees, impact fees and other development fees for the specific attainable housing units.