Mayor Brandon Johnson’s plan to spur affordable housing construction with a new loan fund finally passed in the City Council Wednesday after weeks of wrangling.
The passage of Johnson’s ambitious “Green Social Housing” plan marks one of the mayor’s first major legislative wins of the year, one he will certainly point out to his progressive base as evidence he is delivering on his agenda.
And the novel policy that will use a revolving pool of city cash to help finance housing construction could serve as an example for other locales seeking to build affordable homes amid waning federal support, even as some aldermen worried Wednesday that it doesn’t go nearly far enough.
“The people of Chicago have called for more affordable units, and that’s exactly what we’re doing,” Johnson said after the vote. “We are going to build the safest, most affordable big city in America.”
The measure had been hampered by a series of thorny questions, but sped through first a committee vote and a final vote Wednesday. Aldermen approved in a 30-to-18 vote the ordinance to create a nonprofit structure charged with loaning out the fund’s $135 million.
Only one alderman testified about the policy at the council meeting before the Wednesday afternoon vote, a sign of the exhaustive conversations that had already taken place.
On Wednesday morning, a council joint committee held its third meeting on the ordinance. Ald. Jessie Fuentes said then it’s “not a secret” that the city is struggling with housing supply.
“The way to resolve that is to get more units online,” Fuentes, 26th, said.
Johnson’s administration touted changes to the policy during the committee meeting that strengthened how ethics rules apply to the nonprofit, an effort to address concerns from aldermen that it would face little oversight.
The mayor’s policy chief, Jung Yoon, said the fund is especially needed as President Donald Trump cuts federal spending on affordable housing. Recent Trump moves jeopardize 2,500 Chicago affordable units already “in the pipeline,” but Johnson’s new effort will help continue such construction, “no matter what happens at the federal level,” Yoon said.
“The fact is, we are not getting support from the federal government,” Ald. Michael Rodriguez, 22nd, said. “The federal government is pulling back from our city, and that’s shameful. And we have to put ourselves in a better position.”
The fund, seeded with money from Johnson’s $1.25 billion borrowing plan passed last year, will offer developers low-cost loans during construction with cheaper interest rates to replace expensive equity investment. In exchange for getting the loans, developers will build more affordable units, making at least 30% of their development’s units affordable.
The loans will be repaid to the city in three to five years, allowing the money to be lent out again at low cost to spur more construction as the fund gradually earns interest to grow.
Despite the Johnson administration’s assurances that the program could work across the city, some aldermen — including Finance Committee chair Ald. Pat Dowell — have said they worry the policy will do little to help Black Chicagoans in less wealthy areas.
“Some of us want to see opportunities in our own communities that move at the same speed and the same energy as this ordinance is moving,” Dowell told aldermen before voting against the measure.
Johnson’s ordinance last month also faced pushback from the American Federation of State, County and Municipal Employees Council 31. The union feared the ordinance would privatize government jobs its workers already do.
Those qualms were resolved when the mayor’s administration reached a deal to guarantee the nonprofit operating the loan fund would use workers from the city’s Department of Housing if it created jobs similar to ones that already exist.
But that agreement was not enough to win aldermen over at the time. After the Johnson administration first introduced the ordinance in February, aldermen narrowly voted to table it in mid-April, even after several earlier meetings.
For Johnson, who will be marking the second anniversary of his inauguration next week, the ultimate passage of the plan comes just in time to flaunt the victory in the customary onslaught of interviews.
Yoon said she expects the program to initially lead to the construction of 400 units, around 120 affordable, per year. The $135 million is intended to be loaned out across five years, she added.
Ald. Nicole Lee had been unsure of how she would vote Wednesday morning, but knocked on wood as she told aldermen she planned to support the measure and hoped it would work.
“It’s small, though,” she added. “I know you talked about it as one additional tool. But it seems to me that we need to be doing a lot more than just this.”
Asked whether the ordinance would do enough to address Chicago’s affordable housing shortage, Johnson said it is not the city’s only way to do so. He pointed to other housing-oriented efforts, like the spending to spur downtown office-to-apartment conversions on LaSalle Street and the “Cut The Tape” initiative to clear development hurdles.
And no effective player should be left on the bench, he added.
“Look at it as John Paxson on the Bulls,” Johnson said.
