OIG Releases Follow-Up on the Department of Planning and Development’s Administration of the Affordable Requirements Ordinance

The City of Chicago Office of Inspector General (OIG) has completed a follow-up to its March 2017 audit of the Department of Planning and Development’s (DPD) administration of the Affordable Requirements Ordinance (ARO). Based on the Department’s responses, OIG concludes that DPD has implemented some corrective actions, while others are partially implemented or not implemented at all.

The original audit assessed the geographic outcomes of ARO-created and -financed affordable units, the City’s historical use of ARO in-lieu fees, and the role of the Chicago Community Land Trust (CCLT) with respect to for-sale affordable units created by ARO. OIG found that the City neither appropriately accounted for all ARO and Density Bonus fees nor utilized best practices in the administration and investment of these fees. Additionally, OIG determined that CCLT has never received funding sufficient to achieve its mission of acquiring land for the creation of affordable housing units.

OIG previously recommended that that DPD develop specific goals relating to the geographic distribution of affordable housing, assess and formally define the City’s high opportunity areas for affordable housing development, incentivize affordable housing development in such areas, and monitor affordable housing outcomes on an ongoing basis. OIG also recommended that DPD ensure the restoration of $4.5 million in ARO and Density Bonus fees to the Affordable Housing Opportunity Fund, to be used for the creation of affordable housing. Finally, OIG recommended that DPD and CCLT work with the City Council and the Office of Budget and Management (OBM) to secure the resources necessary for CCLT to function as a community land trust, and to reintroduce 99-year deed restrictions rather than 30-year deed restrictions currently in place.

While DPD has defined and assessed housing zones and has worked with OBM to create a dedicated fund for ARO and Density Bonus money, the Department disagreed about the need to remedy past accounting confusion, choosing only to use the dedicated fund going forward. CCLT has hired an executive director, increased the number of units in its portfolio, and made efforts to fundraise externally. However, it has declined to undertake additional steps OIG recommended to better align its operations with its organizational name and mission, including the implementation of 99-year deed restrictions.

“The availability of affordable housing in every neighborhood continues to be a critical issue to Chicagoans,” said Inspector General Joe Ferguson. “We urge the Department of Planning and Development and the newly re-established Department of Housing to focus on creating and preserving long-term affordability and measuring its progress toward this goal.”

The full report can be found online at OIG’s website: bit.ly/DPDAROFollowUp

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The mission of the independent and non-partisan City of Chicago Office of Inspector General (OIG) is to promote economy, effectiveness, efficiency, and integrity by identifying corruption, waste, and mismanagement in City government. OIG is a watchdog for the taxpayers of the City and has jurisdiction to conduct investigations and audits into most aspects of City government. If you see corruption, fraud, or waste of any kind, we need to hear from you. For more information, visit our website at: www.igchicago.org.