O’HARE — A long-planned affordable housing development that would create nearly 300 apartments near the Cumberland Blue Line station received a property tax break last week, which will save the developers millions over the next three decades.
The seven-story, $91 million project by Glenstar Properties at 8503-8723 W. Higgins Road is set to create 297 apartments, with 59 being affordable, near O’Hare Airport.
The area near O’Hare was designated a low-affordability community area under an ordinance passed by City Council in April. This allowed the developer to receive property tax relief through a state law, through which the Cook County Assessor’s Office lowers assessment values for buildings that meet certain affordable housing requirements. Glenstar’s property qualified because the developers will set aside 20 percent of units as affordable for 30 years.
Glenstar representatives did not return calls seeking comment. Liz Butler, the project’s zoning attorney, said in a statement the company will save $23.5 million in taxes over the 30-year period, while the total cost of providing the on-site affordable units will be about $52 million.
“The tax savings help to partially offset the cost of the affordable component of the project, making it possible to provide these units, but by no means results in a financial windfall,” Butler said.
Mayor Lori Lightfoot introduced the ordinance, the first of its kind to give tax incentives to developers building multi-family apartments in areas lacking affordable rental units.
A “low-affordability community” is an area where 40 percent or less of the total housing units are affordable, according to the ordinance.
In the O’Hare area, only 20 percent of housing is affordable to households earning 60 percent of the area median income, according to 2019 citywide analysis from the city’s departments of planning and of housing.
Eugenia Orr, a spokesperson for the Department of Housing, said the ordinance represents Lightfoot’s commitment to increasing access to affordable housing citywide, but especially in areas with minimal affordable rental options.
“The low-affordability designation furthers the mayor’s equity agenda and commitment to accessible development, provides new housing options to low-income Chicagoans without any scarce city affordable housing funds, and is an important step toward addressing Chicago’s longstanding racial and economic segregation,” Orr said in a statement.
The designation paves the way for other affordable housing developers to benefit from these tax breaks if they build in communities that receive the low affordability selection.
The city is also strongly supportive of the other two tiers of incentives under the program, which are available in every community and provide a “comprehensive set of incentives for affordable new construction and rehab development,” Orr said.
The Glenstar development, first presented in 2016, received City Council approval last year despite fierce opposition from Ald. Anthony Napolitano (41st), who opposed changing the site’s zoning.
Napolitano has argued the area is overburdened with residential density and said he wanted a commercial development at the site instead. He has denied his opposition to the project is because it includes affordable units.
The project’s passing broke the long-standing tradition of deferring to the local alderperson’s opinion when it comes to developments in their ward.
Napolitano said at a committee meeting before the City Council vote that he understood some alderpeople supported the development because of the affordable housing component, but “your vote tells my residents and your residents tomorrow that, as an advocate of the ward, that our say … is no longer heard.”
But Lightfoot said “housing is at the heart” of the city’s segregation and the development was a necessary project that will help workers at O’Hare Airport.
“This is a time to not just think about your own interests; it’s time to think about the city’s interests,” Lightfoot said. “It’s critical for us to make a statement about affordability and where it can be located.”
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Standing 90 feet tall with 270 parking spaces, Glenstar’s project would cast a smaller shadow and create less car traffic than an office building that would be allowed under the site’s previous zoning, managing principal Michael Klein previously told The Daily Line. He said the project site is surrounded not by single-family homeowners, but by mid-rise office and hotel buildings, whose owners have cited concerns about a lack of nearby homes for their workers.
“[Napolitano said] the neighbors around really don’t want it, but the only neighbors around are commercial” property owners, Klein said. “We’ve talked to them all, and they’re the ones who are pushing for us to do this, and they support it.”
Far Northwest Side affordable housing advocates have applauded the project, saying more options like it are needed in the area that will help families and O’Hare workers live closer to work.
“Here’s an opportunity to get roughly another 60 affordable units in a part of the city that has been denied affordable housing historically,” Michael Rabbitt, Neighbors for Affordable Housing co-founder, previously said. “And we know from anecdotal evidence that’s this is a part of the 41st Ward that has a greater need for affordable housing than more affluent parts of the ward.”
Rabbitt’s group, formerly known as Neighbors for Affordable Housing in Jefferson Park, was founded in 2017 to support a controversial 75-unit mixed-income housing complex at 5150 N. Northwest Highway that opened to residents earlier this year. Rabbitt noted that more than 700 people applied to live in the Northwest Highway building despite fierce community debate. Proponents of Glenstar’s project say that could happen again when its apartments are ready.
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