State OKs Naperville’s plan to create more affordable housing but approval could be short-lived
Five years after flagging Naperville for failing to have enough affordable housing, the state has officially recognized the city is chipping away at the problem — or at least it’s trying to.
Earlier this year, the city submitted an affordable housing plan to the Illinois Housing Development Authority outlining how the city’s long standing dearth of low-cost units will be addressed. The agency asked Naperville to submit the plan in 2018 when it was cited for falling short of state affordability standards.
Last month, the state notified Naperville it had accepted the city’s plan. However, next month the agency is to release an updated look at which Illinois towns fail to meet its standards and the city could find itself flagged again.
If that happens, the city would need to amend its recently-approved plan or submit a new one that demonstrates a continued commitment to balancing its housing stock.
City officials say Naperville has been, and will continue, working towards that goal on its own.
“(Our plan) is reflective of items that the city has already been working on,” said Allison Laff, deputy director of the city’s Transportation, Engineering and Development, adding “that’s why I think (the most recent plan) was so easily prepared and accepted” by the state.
Two decades ago, the state passed the Affordable Housing Planning and Appeal Act of 2003 to address the lack of moderately-priced housing in many Illinois communities. It established a process for identifying the municipalities across the state with the most acute shortage of affordable housing stock and designating them as “non-exempt local governments.”
To be considered non-exempt, municipalities must have a population of at least 1,000 and an affordable housing stock that accounts for less than 10% of their total year-round residential real estate.
The state released its list of non-exempt local governments in 2004, 2013 and 2018. Naperville was been cited in all three reports.
When a municipality finds itself on the housing authority’s non-exempt list, it is required by to acknowledge state concerns and respond with an affordable housing plan laying out how it will add the low-cost units it needs to add to reach 10% affordability.
In 2018, the state found only 3,778 of Naperville’s 50,410 housing units — 7.5% — fell into the category of “affordable.” State law defines affordable as units that are within the means of homebuyers at 80%, or renters at 60%, of the regional median household income.
Once municipalities are notified of their non-exempt status, they have 18 months to submit an affordable housing plan to the state.
The Naperville City Council didn’t approve its plan until March, nearly three years after the 18-month mark passed.
Laff said the pandemic played a role in the delay but also acknowledged staff put the state plan on the back burner while they focused on the affordable housing initiatives instigated by the city itself.
In 2019, the city hired consultant SB Friedman to conduct a Housing Needs Assessment to analyze Naperville’s existing housing stock. They found what the city had to offer wasn’t meeting a segment of the populations’ needs due to a lack of lower-cost options.
Friedman advised that if the city continues to grow, it would need to add between 11,700 and 13,000 new housing units by 2040, including affordable and market rate options, to achieve a balanced housing mix.
That equates to more than 500 new units per year.
Between 2020 and the end of October this year, the city has issued 718 permits for single-family homes, 31 for condos/apartments and 232 for townhomes, according to Laff. Condo/apartment and townhome permit data reflect permits issued for overall buildings and do not indicate the total number of units located within those buildings, Laff noted.
Later in fall 2020, Friedman returned to the city with a menu of policy options to tackle Naperville’s housing problems. In response, elected officials adopted a multiyear work program prioritizing the consultant’s recommendations.
Laff said the city has been, incrementally, working through the recommendations since. Headway so far is charted in Naperville’s state-obligated housing plan.
To date, progress is as follows, according to information communicated to the state, previous reporting by the Sun and conversations with city staff:
The city’s housing work program recommends Naperville “develop a strategy to leverage publicly-owned land to address housing challenges.” In 2021, the council declared 6.1 acres of city-owned land near Route 59 and 103rd Street as surplus to be sold for an affordable housing complex for seniors and adults with intellectual and developmental disabilities.
Laff said the developer, chosen in September 2022, is now working to secure funding. The project also plays into a separate work program item, “establish additional resources to assist populations with special housing needs,” she said.
A second item advises, “develop a specific plan to preserve Naturally Occurring Affordable Housing.” The city is currently undertaking this project in conjunction with the Chicago Metropolitan Agency for Planning, per plans passed on to the state.
A third item proposes a “Revolving Rehabilitation Loan Fund specifically targeted to low-income seniors who currently own in Naperville” so they can maintain their homes and age in place.
Rather than a loan program, however, city staff established a Single-Family Home Repair Program geared towards low- and moderate-income residents, according Miranda Barfuss with the city’s Community Services Department. While facing delays through the pandemic, the program is active and currently assisting three households, Barfuss said.
A fourth item suggests establishing a Housing Trust Fund specifically for veterans, seniors, populations with special housing needs and first responders. Laff said, “That is something to look into in the future” but that it “wasn’t a priority review at this point given what we are already working on.”
Finally, the work program suggests creating an “Inclusionary Housing Ordinance.” Instead of the ordinance, which would have required a developer to include affordable options in new housing developments, the council in 2021 preferre a rewards-based approach.
To that end, council members in January unanimously agreed to establish an incentive program that would guarantee breaks on fees and city requirements if a developer agrees to build rental or for-sale housing that is classified as affordable. City staff are actively preparing an ordinance to finalize the program, which should be ready for council review in the next three months, Laff said.
The last item on the list is to establish “a working relationship with affordable housing developers,” but Laff and Barfuss could not immediately identify any progress beyond relationships formed through the city’s ongoing Route 59/103rd Street affordable housing project.
Overall, an additional 1,263 affordable units are needed in Naperville to meet the AHPAA’s 10% affordable housing stock minimum, the city’s housing plan says.
“I think we know that the number is difficult to achieve because it’s a lot of units and we don’t have a lot of developable property to work with anymore,” Laff said. “We have our work program, and we’re definitely moving forward with that.”
