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Monday, June 21, 2021

Bill Would Amend Affordable Housing Laws

Since the Affordable Housing Planning and Appeal Act (Act) became effective in January 2004, housing affordability has inspired much debate in Illinois. 

The Act requires all non-exempt municipalities (those with less than 10% affordable housing units in their communities) to adopt an affordable housing plan that includes, at a minimum, (1) a report indicating how many affordable units would need to be constructed to make a local government exempt from the reporting requirements (i.e., how many units would be needed to make 10% of all year-round housing within the locality affordable); (2) information on plots of land and existing structures which are best suited for affordable housing development; (3) potential incentives that may be used to attract affordable housing development to a locality; and (4) the identification of a goal for increasing affordable housing according to the Act’s specified benchmarks. 

HB 2621 (which passed both houses and is now before the Governor) proposes various significant amendments to the Act, the Illinois Housing Development Act, and the Illinois Income Tax Act, as well as enacting the COVID-19 Affordable Housing Grant Program Act. The changes of most interest to municipalities are discussed below.

The amendments to the Act, if passed, would require non-exempt municipalities to provide notice and hold a public hearing on any new affordable housing plan or amendment to an existing plan.

The amendments also provide for remedies for non-compliance with the Act’s reporting requirements. The Attorney General is now authorized to enjoin noncompliance, mandate compliance, or enforce the Act “by means of other appropriate relief.”

The proposed legislation would also amend the Act to preempt home rule authority, providing that home-rule units of local government may not take action to regulate affordable housing development in a more restrictive manner than the state has under the Act. 

The COVID-19 Affordable Housing Grant Program Act, if signed into law by Governor Pritzker, would create a scheme by which the Illinois Housing Development Authority is required to administer special grant funding to sponsors of qualified affordable housing projects. This proposed legislation identifies several considerations which will be used to prioritize funding allocation, including whether an area has been disproportionately affected by the pandemic; whether local organized labor will be used in the development process; and whether the developments involve contracting with disadvantaged businesses or businesses that are owned by minority groups. With the availability of this new grant funding as a supplement to the Federal Low-Income Housing Tax Credit, towns can expect renewed interest in developing affordable housing, placing even greater emphasis on having a plan in place.

Post authored by Adam Simon and Erin Monforti


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