To the Editor:
The construction of the Obama President Center in Hyde Park has prompted concerns over the potential gentrification of the neighborhood. That’s why last month, Chicago aldermen introduced an affordable housing proposal to address the issue. This is the culmination of a three-year effort by the Obama Community Benefits Agreement Coalition, which claims 4,500 households in Hyde Park are at risk of displacement from rising property values. Unfortunately, their proposed solutions evoke the same sort of economically unsound policies that helped ruin the San Francisco housing market.
San Francisco is the most expensive American city to rent an apartment in, with the median price of a one-bedroom reaching $3,720. For this, its residents can thank city policies restricting the development of new housing.
What you encounter there is a pretty simple issue of supply and demand. In San Francisco, people who aren’t exactly poor are in desperate need of housing and can’t get it, because new developments are so limited in how much housing they can offer. Whenever developers build housing with 25 or more units, they must have designated at least 18% of the units as “affordable” — meaning a below-market value rate that’s fixed to a proportion of the renter’s income. Small projects of 10-24 units must set aside 12-15%. In lieu of this requirement, developers can either pay a fee or build even more affordable housing at another location.
These requirements decrease the capacity and incentive for developers to build new units, severely restricting the supply of housing, which, of course, drives up the price of rent. In order to meet their expenses, landlords are also forced to recoup their lost revenue by raising the rent of non-affordable housing units even further, driving away everyone except the fabulously wealthy. So not only has this resulted in higher rent, but it has also caused the displacement it tried to end while contributing to San Francisco’s relentless homeless crisis.
But San Francisco’s affordable housing policies are small potatoes compared to the Community Benefits Agreement proposal, which would be one of the most radical affordable housing policies in the country.
If the CBA housing proposal is passed, new developments in Hyde Park with three or more units must have at least 30% affordable housing, with no in-lieu fee option — the only exception being owner-occupied buildings of six units or less. The scale of this proposal is shocking — it far exceeds the policies that have contributed to the San Francisco housing crisis, and would undoubtedly cause many of the same problems.
This housing proposal is merely one element of the Obama Community Benefits Agreement. The coalition also intends to introduce plans regarding employment, economic development, education, transportation, and sustainability. They have lofty intentions, but little in the way of concern over the negative consequences of their proposals. Indeed, their radical ideas are generally focused on centralized control and skepticism of markets, making their partnership with the Democratic Socialists of America unsurprising.
Policymakers who care about their constituents should welcome the new jobs and higher quality of life that will follow the economic boon of the Obama Center. A rising tide does, in fact, lift all boats, and we shouldn’t model our response to this opportunity on the failures of San Francisco or the dreams of the DSA. Rather, as the 44th president himself often urged, “hope and change” should be our goal. For the sake of everyone in Hyde Park, when it comes voting time on this proposal, the housing committee should give a resounding and unanimous “no.”