2017 BUDGET

Creating New Resources to Invest in Chicagos Neighborhoods

The Neighborhood Opportunity Fund and the Affordable Housing Opportunity Fund
Introduced by Mayor Emanuel and approved by the City Council in May 2016, the new
Neighborhood Opportunity Fund (NOF) will spur commercial development in
neighborhoods lacking private investment. By reforming the Citys zoning system to allow
larger buildings to be built downtown, the NOF will generate resources to catalyze
economic activity in our neighborhoods most in need. The NOF expands on Mayor
Emanuels recent reform of the Affordable Requirements Ordinance (originally passed in
2007), which leverages market-driven housing development to create resources for
affordable housing throughout the city.
Neighborhood Opportunity Fund
The Department of Planning and Development (DPD) expects that downtown
developments which take advantage of the new zoning reforms will generate
approximately $9.7 million in funding in 2017, from seven projects pending approval in
2016.
Eighty percent of the revenue is dedicated towards the NOF to fund commercial
development and job-creation in neighborhoods in need; 10 percent towards improving
and maintaining landmarks throughout the city; and 10 percent toward local
infrastructure improvements within one mile of the contributing development.
For the seven projects expected to be approved in 2016, and generate revenue in 2017,
over $7.4 million will be available for the NOF.
Funding is paid when projects pull permits for construction. A development at 9 W
Walton is using the new zoning reforms to add additional floors to a project already
under construction, and may contribute $800,000 in funding in 2016. The remaining six
projects will apply for permits in early 2017.
Of the seven initial projects, three have already been heard by the Chicago Plan
Commission. Those developments are projected to yield a total of 1.5M square feet of
development, create approximately 1,400 jobs (construction and permanent
combined), and contribute a total of nearly $6 million towards the NOF, landmark, and
local improvement funds. The remaining four project approvals expected this year
should generate an additional over $3 million
Looking into 2017, DPD is aware of eight other downtown projects in the early stages of
development that might utilize the new zoning reforms. Though these projects may
change significantly prior to approval, a rough estimate is that four of those projects
could generate approximately $13.4 million in funds, resulting in $10.7M (80%) for the
NOF.

Affordable Housing Opportunity Fund

The Affordable Requirements Ordinance (ARO) requires residential developments that
are downtown Planned Developments or that receive increased density to provide a
percentage of units at affordable prices or to contribute to affordable housing
elsewhere. The ARO also applies if the project receives City financial assistance, or Cityowned land.
Since 2011, the ARO has generated $58.95 million in fees for the Affordable Housing
Opportunity Fund and has created over 600 long-term affordable units.
Mayor Emanuels 2015 reforms to the ARO are designed to create more resources for
affordable housing, as well as increased affordable housing built on-site as part of
market-rate developments.
The new ARO went into effect for projects submitted after October 13, 2015, which are
just beginning to make their way into the construction phase.
In the short time that it has been fully in effect, the Mayors reform has generated
$150K in new fees.
Over the next five years, DPD estimates that construction, at its current pace, would
generate 1,490 affordable units, with at least 370 units on-site or nearby the primary
development and up to $145M in fees for the AHOF, as well as $12M in taxes and
revenue for local governments and over 1,800 local jobs.