Title: Mayor's $1.25 Billion Affordable Housing Plan Faces Delays in City Council, Final Vote Expected Friday

In a City Council meeting on Wednesday, Mayor Brandon Johnson's $1.25 billion affordable housing and development proposal encountered a setback. The plan, which relies on borrowing $250 million annually in economic development bonds for the next five years, aims to stimulate affordable housing initiatives and other projects. However, concerns raised by some alderpeople regarding the high borrowing amount have caused the proposal to stall temporarily.

The cornerstone of Johnson's administration this spring, the plan involves repaying the debt using funds from expiring tax-increment financing (TIF) districts. Chicago currently has 121 designated TIF districts, with 45 of them set to expire by the end of 2027. According to the mayor's proposal, the money returned from these districts will not only cover the accrued debt entirely but also provide additional funds to invest in communities across the city.

The estimated cost to taxpayers for both principal and interest over 37 years is $2.4 billion, as stated by the Mayor's Office. Since its introduction in February, the proposed bond deal has generated both praise and pushback from City Council members.

Led by Ald. Bill Conway, more than a dozen alderpeople have advocated for significantly reducing the full bond amount. In a recent finance committee meeting, Conway proposed decreasing the borrowing program from $1.25 billion to $350 million. However, this proposition was blocked by Ald. Daniel La Spata, a close ally of the mayor. Finance committee chair Ald. Pat Dowell then held the ordinance before ultimately advancing it to the full City Council on Wednesday.

During Wednesday's meeting, Dowell decided to defer and publish the ordinance, further delaying the final decision. Consequently, a new meeting has been scheduled for Friday, when alderpeople are expected to hold a final vote on the measure.

The use of TIF districts in Chicago has long been a source of development funding. However, critics argue that the system is inequitable and favors wealthier areas where property values are rising. When a TIF district is established, the amount of property taxes collected within the district is frozen, and any additional tax dollars generated are pooled into a dedicated fund for infrastructure and economic development within that district's boundaries.

Ald. Conway proposed a "pilot program" version of the bond proposal in an attempt to mitigate the risk of burdening future taxpayers. Despite some opposition, the plan has garnered the support of the Civic Federation and Metropolitan Planning Council. Joe Ferguson, the city's former inspector general and current president of the Civic Federation, praised the proposal as a sensible means of redirecting revenue without increasing taxes.

If passed, the $1.25 billion in borrowed funds would be evenly split between the Department of Housing and the Department of Planning and Development. The housing department's allocation would be directed towards the construction and preservation of affordable rental homes, homeownership initiatives, and the preservation of single-room occupancy structures. The planning department would use its share to provide neighborhood development grants, support small businesses, and invest in jobs and workforce training opportunities.

Mayor Brandon Johnson has highlighted the bond deal as a key policy initiative, particularly following the defeat of the Bring Chicago Home referendum in the March primary. The failed referendum aimed to establish a dedicated funding stream to address homelessness in the city. Johnson sees the bond deal as the next step in fulfilling his promise to invest in people and fund affordable housing initiatives across Chicago.

As the final vote on the proposal approaches, the City Council faces the task of balancing concerns about the borrowing amount against the potential benefits of increased affordable housing and community development.