Inspector hits Rahm on affordable housing fees
Mayor Rahm Emanuel’s administration “did not appropriately account” for more than $ 4.5 million in fees collected from developers to build affordable housing but is refusing to replenish the fund, the city’s inspector general concluded Tuesday.
Inspector General Joe Ferguson audited $ 89.9 million in fees collected from developers from 2013 to 2015 in exchange for either building bigger projects or to avoid building affordable housing units on site.
He found that the city “did not appropriately budget” more than $ 4 million of that money and “did not appropriately account” for $541,252 in“appropriationauthorized, but unused” fees.
“This negatively impacted both the quantity and quality of [ Affordable Requirements Ordinance] program outcomes and, ultimately, the options available to prospective tenants and homebuyers seeking affordable housing in Chicago,” Ferguson wrote in his cover letter to the City Council.
“Additionally, the Chicago Community Land Trust has never been sufficiently funded to achieve its mission of acquiring land for the creation of affordable housing units.”
Since the city “could not produce records” to prove the money was “indeed used for affordable housing,” Ferguson recommended that the Department of Planning and Development restore all $ 4.5 million to the fund.
The Emanuel administration refused because the Office of Budget and Management questioned the accounting records maintained by the Department of Planning and Development. That’s proof that even the city “recognized that its past accounting practices made tracking affordable housing monies challenging,” the inspector general wrote.
In 2015, the Affordable Housing Fundwas segregated from the corporate fund that serves as the city’s checkbook for day- to- day expenses.
That should “mitigate the risks” going forward, the audit states.
“A lack of strategy and undelivered resources has negatively impacted the options available to those in need,” Ferguson wrote.
The inspector general noted that the two programs that distributed developer fees “lacked an evidencebased strategy to define high and low- opportunity areas for affordable housing development and incentivize such development accordingly.”
“While the Department has committed to engaging in a more strategic and evidence- based approach in determining the location of affordable housing investments, the city’s response to remaining findings is concerning, including its decision to abandon the mission of Chicago’s only affordable housing land trust.”
Planning and Development CommissionerDavid Reifman took issue with the audit.
“We don’t agree that the city shorted the local housing trust fund in 2008. But, we do agree that the tracking of expenditures was not as clear as it should have been, and we’ve enhanced transparency. We report quarterly to the City Council,” Reifman told the Chicago Sun- Times.
“From 2003 to 2015, the trust fund received over $ 75 million of other city funding in addition to $ 20 million in Affordable Requirement Ordinance fees and density bonus revenue. So, in sum, any losses were on paper only.”
Emanuel said he hasn’t read the audit. But he noted that his administration is “at the halfway mark” of its fiveyear plan to create 41,000 units of affordable housing.
“North of 20,000 we’ve already funded,” the mayor said.
The mayor advised reporters to look at the “Neighborhood Opportunity Fund” he created to rebuild neighborhood commercial corridors with contributions from developers allowed to build bigger and taller downtown projects.
The fund is in line for a $ 15.6 million windfall, thanks to a record contribution from developers of a 51- story riverfront office tower at 110 N. Wacker with 1.35 million square feet of space.
“As development happens downtown, we’re making sure we have additional resources for our neighborhoods, small businesses and residents that didn’t have it before,” the mayor said.