Department of Planning and Development Affordable Requirements Ordinance Administration Audit

Executive Summary

The ARO requires certain private market residential developers to designate a percentage of units on site as affordable and/or pay an in-lieu fee to the City. The Ordinance requires the City, in turn, to use these fees to advance affordable housing development in Chicago. The three objectives of the audit were to determine the geographic outcomes of ARO-created and -financed affordable units, to assess the City’s historical use of ARO in-lieu fees, and to evaluate the role of the Chicago Community Land Trust (CCLT) with respect to ARO-created, for-sale affordable units.

Based on the audit findings, OIG concluded that, historically, the City neither appropriately accounted for all ARO and Density Bonus fees nor utilized best practices in the administration and investment of these fees. This negatively impacted both the quantity and quality of ARO program outcomes and, ultimately, the options available to prospective tenants and homebuyers seeking affordable housing in Chicago. Additionally, OIG determined that CCLT has never been sufficiently funded to achieve its mission of acquiring land for the creation of affordable housing units.