City Council approves Mayor Johnson’s “green social housing” plan to boost affordable housing

Mayor Brandon Johnson’s plan to create a city-owned nonprofit developer to help confront Chicago’s affordable housing crisis was approved by the City Council on Wednesday.

The council voted 30-18 to approve the mayor’s so-called “green social housing plan,” which would establish a nonprofit real estate development corporation under the Chicago Department of Housing.

That nonprofit, known as the Residential Investment Corp., would control a $135 million fund that would be used to provide low-cost loans to developers to build environmentally friendly buildings. Projects seeking $5 million or more in loans would require approval from the City Council.

Loan payments from developers would go back into the fund to finance future projects.

At least 30 percent of the units built in such projects would be set aside as affordable housing, while the city would maintain majority ownership stakes in the buildings. Officials said the goal of the program is to create 400 affordable units per year.

Buildings financed through the program would have to meet Green Building Standards aimed at decreasing carbon emissions, reducing utility bills, and improving indoor air quality.

The nonprofit would be overseen by a board of 15 directors, mostly appointed by the mayor, including seven experts in housing and real estate development; as well as the city’s Housing Commissioner, Chief Financial Officer, and Planning and Development Commissioner. Their meetings would have to be open to the public, and their records would be subject to the Freedom of Information Act.

“I’m confident that Green Social Housing in Chicago will become a model for the nation,” Johnson said in a statement after the ordinance was approved.

The proposal faced weeks of debate in committee before the vote, and underwent at least two revisions to satisfy concerns from labor unions who feared it could privatize existing city jobs.

The ordinance includes guarantees that the loan fund will use Department of Housing workers for any services similar to existing jobs within the department.

Several aldermen also had raised concerns about ethics oversight of the nonprofit, but the version of the ordinance approved on Wednesday guarantees the city’s Inspector General and Board of Ethics have investigative jurisdiction over the new nonprofit.

Ald. Leni Manaa-Hoppenworth (48th), who sponsored the ordinance with the mayor, said it was important to pass the ordinance at a time when the Trump administration’s budget proposals threaten funding for 2,500 units of affordable housing currently in the pipeline in Chicago.

“This will be another tool in our toolbox to help spur development in tough financial environments across the city, and not just for affluent communities, but this tool can help invest in neighborhoods where investors have been unwilling to,” she said. “We know city government cannot do this alone, we know the private sector cannot do this alone, and we urgently need new solutions to fill the gaps in both the public and private sector.”

The $135 million fund will be financed from a $1.25 billion borrowing plan approved by the City Council last year.