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Consultant Says Need For Affordable Housing In Naperville ‘is Just Going To Get Worse’

Naperville’s need for affordable housing will only grow if the city doesn’t take steps to address the problem, a consultant hired by city officials said.

In a report recently presented to the city’s Housing Advisory Commission, the consultants found residents in more than one quarter of Naperville households are paying higher housing costs than the federal government considers affordable. The issue is trending worse in the northern part of the city, according to the report

Naperville has taken initial steps toward addressing its lack of affordable housing, such as recommending that a portion of a possible development on city-owned land include affordable housing options, and conducting studies and training, but city leaders have not implemented sweeping change. Now, as Naperville continues to grow and open space to build new housing becomes scarce, advocates are urging action by city leaders.

“The problem’s just going to get worse,” Fran Lefor Rood, senior vice present of SB Friedman, told the housing advisory commission. “It’s not going to resolve. We’re not seeing a downward shift in incomes or a leveling off of housing values or something that would indicate that five years out, everything’s going to match evenly and we won’t have an affordability problem.”

Affordable housing advocates in May participated in a panel on affordable housing in Naperville. While Naperville has been cited multiple for not having enough affordable units, the issue is beginning to take the forefront as city council members make decisions on large residential development projects. (Erin Hegarty / Naperville Sun / Chicago Tribune)

The Naperville Housing Advisory commission recently heard results of a Housing Needs Assessment from SB Friedman and reviewed a separate housing action plan, listing some potential strategies, created with the help of several municipal organizations out of months of meetings with various groups. SB Friedman is set to return to the commission with its own list of possible strategies in the coming months.

In the Housing Needs Assessment, SB Friedman was charged with determining whether Naperville’s existing housing stock meets current and projected needs and identifying housing-related issues and unmet needs.

Both reports found there are fewer options for young families to buy starter homes in Naperville as developers tear down smaller homes to build larger luxury houses. Home prices are rising, and tear down activity helps perpetuate that trend.

The Friedman analysis shows that according to Census data, 27% of all households in Naperville are burdened by housing cost, meaning residents pay more than 30% of their income toward rent or a mortgage, utilities and other expenses.

“These households are considered cost-burdened and many are low-income,” the Friedman analysis says. “Therefore, there appears to be a considerable need for both owner-and renter-occupied affordable and income-restricted housing throughout the city to meet current residents’ needs.”

Naperville would have to add more than 3,000 lower-cost homes for buyers with incomes below $50,000, and more than 2,200 lower-cost units for renters with incomes below $35,000, in order to reach the recommended mix of affordable housing, the Friedman report shows. Housing imbalances at other income levels also remain.

As Naperville continues to grow, the city will 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, the report found. That amounts to more than 500 new units each year.

Councilman Patrick Kelly, the city council representative to the housing advisory commission, said the number was shocking.

“It was like, holy cow!” he said. “That’s a lot of units. Where would we even put them? Forget the price point, where are those going to go?”

The number of new units needed each year is significantly higher than the city’s average of 280 new construction permits per year since 2013. Household income needed to comfortably afford one of the new units built in that time — assuming 30% of income is spent on housing costs — has been around $170,000.

“Without production of new units, other strategies will be needed to mitigate existing housing burdens,” the report found.

James Bernicky, chairman of the Housing Advisory Commission that received the report, called for quick action toward addressing the city’s projected affordable housing shortage. He called the number of new units the city would need “extraordinary.”

“We need to start this year,” he said. “Because we’ve had needs assessments and it feels like this has been kind of something that everyone wants to do, but we need to really start making it a priority to take steps forward on this.”

One of the most surprising figures he saw in the report was that just 15% of people who work in Naperville live here. Growing that number can help create more of a sense of community, as workers also stay in town to go to the city’s restaurants and stores, he said.

Kelly said he wanted more answers on some of the figures in the report, but assuming the report is accurate and the council wants to address the figures in the report, dense, multifamily development looks necessary.

“There’s no other way to do it,” he said.

That task is bound to be a challenge for Naperville. An ongoing update to the city’s master plan will likely address housing, but a recent draft drew fire from residents who complained about changes that include the possibility of multifamily units in certain areas, he said.

Rather than seeking to mandate replacing dozens of houses with buildings comprising hundreds of units, city officials proposed allowing attached townhomes or duplexes to be built when one or two homes come down next to each other, Kelly said. But even that concept is not popular.

“So, if you can’t even do that, yeah, it becomes really difficult,” he said.

Mary Beth Nagai, with the DuPage Housing Alliance, said the city will need to get creative in addressing the housing need with limited land. Her organization has advocated for an ordinance that requires a certain percentage of units in new developments to be built at affordable rates, known as an inclusionary zoning ordinance. The city could also allow accessory units, like basement apartments or in-law suites, and restrict tear downs, she said.

Enforcing a tax on developers that don’t want to include affordable housing in new projects is something the city can do now, Nagai said. “And we have to maintain the affordable housing we have,” she said.

Bernicky and Kelly also said the city should look at an inclusionary zoning ordinance. Kelly acknowledged it could be difficult to get such an ordinance passed, and said he heard from other municipalities that, in order to be successful, Naperville must find a sweet spot, where developers still want to come to Naperville, but also include affordable units in their projects.

“If you’re not going to get any market-rate units, you’re not going to get any affordable units either,” he said.

Still, Kelly said, there is more to the debate. Even if the city encourages affordable housing, in some cases income is also a problem, he said.

“Land and construction costs are going to continue to rise,” he said. “There’s only so much you can do to restrict the price, and people aren’t making enough in wages.”

The Friedman report and addressed a variety of other housing issues, including challenges for seniors who want to downsize but can’t find options. They remain in place meaning the next buyer can’t move into their home.

The number of older homes being torn down is also contributing to affordability challenges

When the commission reviewed the plan, they also heard of several possible solutions presented by a separate group of agencies. Those included ideas such as creating an affordable housing trust fund and focusing on housing for seniors. However, they did not take action, and housing commission members are awaiting additional proposed solutions from SB Friedman.

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