Tag: Chicago

New Chicago Affordable Housing Ordinance Means Greater Costs for Developers

chicago_skyline

The Chicago City Council recently passed an amendment to the existing Affordable Requirements Ordinance (the 2015 ARO), which will increase the cost to develop most affordable housing projects in Chicago.  With the passage of the 2015 ARO, developers must now provide on-site or off-site affordable housing in addition to the in lieu fees which makes it impossible for developers to circumvent the purpose of the affordable housing requirements mandated by the ordinance.  In addition, the 2015 ARO significantly increases the in lieu fees that developers must pay in order to satisfy the requirements of the ordinance.

The Affordable Requirements Ordinance was enacted in 2003 and revised in 2007 to expand access to housing for low-income and moderate-income households and to preserve the long-term affordability of such housing in the Chicago.  Housing is considered “affordable” if the sales price or rent for the housing unit does not total more than a certain percentage of a family’s household income.  To qualify for affordable housing, the household must make at or below a certain percentage of an area’s median income as established by the Department of Housing and Urban Development.

Before the 2015 ARO, developers could pay an “in lieu fee” in the amount of $100,000.00 for every affordable unit they elected not to include in their projects to completely satisfy the affordable housing requirements.

You can click here for a complete summary of the 2015 ARO.  It is a quick reference guide for anyone considering the development of residential projects in Chicago.

Application

The 2015 ARO applies to residential projects that contain ten (10) or more residential units and satisfy one of the following requirements:

  • The project receives a zoning change that permits a higher floor area ratio, changes the use from non-residential to residential or permits residential uses on ground floors where that use was not previously allowed;

  • The project includes land that was purchased from the City of Chicago;

  • The project received financial assistance from the City of Chicago; or

  • The project is part of a planned development in a downtown zoning district.

Minimum Percentages of Affordable Housing

While there are certain exemptions, the 2015 ARO creates minimum percentages for affordable units in projects as follows:

  • Rezoning – In the case of a rezoned property, the developer is required to designate 10% of the units in the project as affordable housing (or 20% if the developer receives financial assistance from the City of Chicago).  Financial assistance from the City of Chicago includes grants, direct or indirect loans or allocation of tax credits to the development.

  • City Land Sales – Where the City of Chicago sells property to a developer and such property is subsequently developed for residential purposes or is incorporated into a residential housing project site in order to satisfy City of Chicago Municipal Code requirements, the developer must designate no less than 10% of the units in the project as affordable housing (or 20% if the developer receives financial assistance from the City of Chicago).

  • Existing Buildings | Zoning Change – Where there is an existing building that contains housing units at the time of an approved zoning change or an existing building that contains a mixed-use occupancy with use being residential at the time of an approved zoning change, only the additional housing units permitted under the rezoning are subject to the affordable housing requirements of the ordinance.  However, in the event the developer has received financial assistance from the City of Chicago, then the entire building is subject to the affordable housing requirements of the ordinance.

Additional Considerations for Affordable Housing Units by Project Location

Compliance with the ordinance will depend on the area where the project is located:

1.  Low-Moderate Income Areas 

  • For low-moderate income areas (designated by the City of Chicago Department of Planning and Development), a developer must provide at least 25% of the required affordable units on-site.

  • For the remaining 75% of the required affordable housing units, the developer has the option of satisfying the requirements of the ordinance by (a) establishing additional on-site affordable housing units; (b) paying an in lieu fee in the amount of $50,000.00 per unit; or (c) any combination of (a) and (b).

2.  Higher Income Areas 

  • In higher income areas (those areas that are not designated as low-moderate income areas), the developer must provide at least 25% of the required affordable units on-site or off-site.

  • For the remaining 75% of the required affordable housing units, the developer has the option of satisfying the requirements of the ordinance by (a) establishing additional on-site or off-site affordable units; (b) paying an in lieu fee in the amount of $125,000.00 per unit; or (c) any combination of (a) and (b).

  • All off-site units must be located within a two (2) mile radius of the residential housing project at issue and in the same or a higher income area or in a district zoned “D” (downtown district) under the City of Chicago Zoning Ordinance.

3.  Rental Units in Downtown Districts

  • In downtown districts and planned developments in a downtown district (zoned “D”), a developer of rental units must provide at least 25% of the required affordable rental units on-site or off-site.

  • For the remaining 75% of the required affordable housing units, the developer has the option of satisfying the requirements of the ordinance by (a) establishing additional on-site or off-site affordable units; (b) paying an in lieu fee; or (c) any combination of (a) and (b).

  • The in lieu fee is $140,000.00 per unit through and including the first anniversary of the publication date of the ordinance in the Journal of the Proceedings of the City Council of the City of Chicago.  The in lieu fee is increased to $175,000.00 thereafter.

  • All off-site units must be located within a two (2) mile radius of the residential housing project at issue and in the same or a higher income area or in a district zoned “D” (downtown district) under the City of Chicago Zoning Ordinance.

4.  Owner-Occupied Units in Downtown Districts 

  • In downtown districts and planned developments in a downtown district (zoned “D”), a developer of owner-occupied units (i.e., condominiums) may establish affordable housing in the following ways: (a) establishing affordable owner-occupied units as part of the residential housing project; (b) establishing off-site affordable owner-occupied units; (c) paying an in lieu fee; or (d) any combination of (a), (b) and/or (c).

  • The in lieu fees are the same as rental units in downtown districts; however, in the event the developer elects not to provide a minimum of 25% of the required affordable owner-occupied units either on-site or off-site, the in lieu fee shall be increased to $160,000.00 per unit through and including the first anniversary of the publication date and $225,000.00 per unit thereafter.

  • Off-site affordable owner-occupied units may be located anywhere in the City of Chicago, subject to the Department of Planning and Development’s approval.

In summary, the 2015 ARO has significantly increased a developer’s cost to develop residential units in the City of Chicago.  It also mandates that affordable housing units be built even if it is off-site.  It remains to be seen if these new laws will in fact inhibit developers from constructing residential projects in the City of Chicago.  To learn more about 2015 ARO and its implications for your business, contact a member of the Much Shelist Real Estate practice group.

ARTICLE BY

Harold S. Dembo & Kristin A. Nordman of Much Shelist, P.C.
© 2015 Much Shelist, P.C.

More Tax Money for the City of Chicago in 2015: Broader Bases, Increased Rates and Lesser Credit

Mcdermott Will Emery Law Firm

The City of Chicago’s (City’s) 2015 budget includes a number of changes to taxing ordinances found in titles 3 and 4 of the Chicago Municipal Code.  The City of Chicago Department of Finance has notified taxpayers and tax collectors of the amendments, effective January 1, 2015, via a notice posted on its website.  The text of the amendments can be found on the Office of the City Clerk’s website.  The amendments, designed to bolster the City’s coffers, affect multiple City taxes by enlarging tax bases, increasing tax rates and tightening credit mechanisms.  The amendments include:

  • Hotel Accommodations Tax(Section 3-24-020(A))

    • The definition of “operator” (the tax collector) was amended to include: (1) any person that receives or collects consideration for the rental or lease of hotel accommodations; and (2) persons that facilitate the rental or lease of hotel accommodations for consideration, whether on-line, in person or otherwise.

    • A definition of “gross rental or leasing charge” (the tax base) was added that excludes “separately stated optional charges” unrelated to the use of hotel accommodations.

  • Use Tax for Non-titled Personal Property(Section 3-27-030(D))

    • A credit is available for sales and use “tax properly due” and “actually paid” to another municipality against the City’s 1 percent use tax imposed on the use in the City of non-titled tangible personal property that was purchased outside of the City.  The added definitions of “tax properly due” and “tax actually paid” exclude other municipal taxes that are rebated, refunded, or otherwise returned to the taxpayer or its affiliate.

  • Personal Property Lease Transaction Tax

    • The exemption from the tax for a “car sharing organization” (i.e., Zipcar) was eliminated.  (Sections 3-32-020(A) (definition) and 3-32-050(A)(13) (exemption))

    • The definition of “lease price” or “rental price” (the tax base) was amended to exclude nontaxable, separately-stated charges only if they are optional.  (Section 3-32-020(K))

    • The tax rate was increased from 8 percent to 9 percent.  (Section 3-32-030(B))

  • Amusement Tax

    • The amusement tax was amended to be imposed on the full charge paid for the privilege of using a “special seating area” such as a luxury suite or skybox (Section 4-156-020(F)).  Credit against this tax is available in the amount of any other taxes the City imposes on the same charges (for example, food and beverage charges) if the taxes are separately-stated and paid.  Previously, tax was imposed on 60 percent of the charge for a special seating area and did not include a credit mechanism.

    • Credit against the amusement tax was eliminated for franchise fees paid to the City for the right to use the public way or to do business in the City.  (Section 4-156-020(J))

    • The amendments eliminated the additional tax imposed on ticket sellers (Section 4-156-033).  The tax was imposed on sellers selling tickets from a location other than where the taxable amusement occurs on the amount of the service fee (as distinguished from the taxable admission charge).  Now, all ticket sellers must collect amusement tax from the buyer on the full amount of charges paid to view the amusement.  (Section 4-156-020(F))

  • Parking Lot and Garage Operations Tax

    • The tax rate was increased by 2 percent for daily, weekly and monthly parking for “the use and privilege of parking a motor vehicle in or upon any parking lot or garage in the City of Chicago [“Parking Tax”].”  (Section 4-236-020(a), (d))

    • The definition of “charge or fee paid for parking” (the tax base) was amended to exclude nontaxable, separately-stated charges only if they are optional.  (Section 4-236-010)

    • An additional tax was added and is imposed on a person engaged in a valet parking business in the City.  Section 4-236-025 imposes tax on the full amount charged by the valet parking business at a rate of 20 percent.  A credit against the additional tax is available in the amount of Parking Tax paid.  These rules replace the former rule for valet parking operators providing that they were to collect Parking Tax only if the operators of the parking lot or garage did not collect the tax.

ARTICLE BY

Jane Wells May
Lauren A. Ferrante
OF
McDermott Will & Emery

Four States and Two Major Cities Approve Minimum Wage Increases

Michael Best Logo

Voters in the states of Alaska, Arkansas, Nebraska, and South Dakota voted in favor of ballot initiatives that will increase the state minimum wage. Alaska’s minimum wage will increase from $7.75 to $9.75 an hour by 2016, Arkansas’s from $6.25 to $8.50 by 2017, Nebraska’s from $7.25 to $9.00 by 2016, and South Dakota’s from $7.25 to $8.50 next year.

Those four states join 12 others and Washington, D.C., all of which have increased their minimum wage in the past two years. For example, New Jersey’s 2013 ballot initiative to raise the state minimum to $8.25 passed by more than 60 %, and in 2006, state initiatives to raise the minimum wage passed by large majorities in Arizona (65.6%), Missouri (75.6 %), Montana (74.2 %), Nevada (68.4 %), and Ohio (56.5 %).

Voters in San Francisco overwhelmingly approved a ballot initiative to raise the city’s minimum wage to $15 an hour, the highest level in the nation, on the heels of Seattle’s June decision to raise its minimum wage to $15. As with Seattle’s minimum wage, San Francisco’s will be phased in gradually, from its current rate of $10.74 an hour to $11.05 on January1 and $12.25 in May before increasing every year until reaching $15 in 2018.

On December 2, 2014, the Chicago City Council overwhelmingly approved raising the City’s minimum wage from the current state-wide rate of $8.25 an hour to $13 by mid-2019. Chicago workers will see their first increase next July, when the minimum wage will increase to $10, then increase by 50 cents each of the two years after that, and $1 the next two years.

This minimum wage initiative has also received some pushback. For example, Hotel industry groups on December 16 sued the city of Los Angeles in federal court over the city’s enactment of a minimum wage ordinance requiring large non-union hotels to pay their workers $15.37 an hour. In their lawsuit, the American Hotel & Lodging Association and the Asian-American Hotel Owners Association allege the city ordinance violates federal labor, contract and equal protection laws.

The hotel minimum wage ordinance, which passed the City Council in October on an 11-2 vote, is estimated to cover about 80 large hotels in the city. Starting in July, hotels with more than 300 rooms must pay workers the higher minimum wage; in July 2016 the measure kicks in for hotels with as few as 125 rooms. Hotel Industry groups contend that by allowing exemptions for hotels with union collective bargaining agreements, the ordinance creates an economic disadvantage for non-union hotels, thus forcing their hand to permit union organizing.

These minimum wage increases are not expected to make it more likely that Congress will pass President Obama’s proposed federal minimum wage increase to $10.10, particularly given the results of this past November’s mid-term elections. However, the minimum wage will certainly remain a hot-button issue for the next two years, and a campaign issue during the 2016 Presidential campaign.

ARTICLE BY

Robert W. Mulcahy
Carlos R. Pastrana-Torres
OF
Michael Best & Friedrich LLP

Walking the Line: Tort Immunity and Pedestrians Outside the Crosswalk in the City of Chicago

Heyl Royster Law firm

Recently, the First District Appellate Court determined that a pedestrian who “walked the line” and was injured while partially inside and partially outside of a crosswalk was barred from recovering for those injuries from the City of Chicago. In Swain v. City of Chicago, the plaintiff was walking through an intersection and broke his foot while stepping in a pothole just a few inches outside of the marked crosswalk. Swain v. City of Chicago, 2014 IL App (1st) 122769 at ¶ 3.

The Illinois Supreme Court has recognized the well settled rule regarding the duty of a municipality to maintain its street in a reasonably safe condition “is that, since pedestrians are not intended users of streets, a municipality does not owe a duty of reasonable care to pedestrians who attempt to cross a street outside the crosswalks.” Vaughn v. City of West Frankfort, 166 Ill. 2d 155, 158 (1995). The court explained:

“[T]he question of whether a municipality owes a duty does not depend on whether the plaintiff-pedestrian was struck by a moving vehicle or tripped over a pothole, but rather depends on whether the municipality intended that the plaintiff-pedestrian walk in that part of the street where the injury occurred and permitted the plaintiff-pedestrian to do so. We note that, except for those cases in which street defects were in the area immediately around a parked vehicle, Illinois courts have refused to impose a duty on municipalities for injuries to pedestrians which were caused by those defects.” Vaughn, 166 Ill. 2d at 163. [emphasis added]

Vaughn further held that “local municipalities owe no duty to maintain streets and roadways in a reasonably safe condition for pedestrians who choose to cross the street outside the protection of the crosswalks.” Id. at 164.

This case serves as a reminder that public bodies benefit by having well maintained intersections and crosswalks that are clearly marked. When injuries allegedly occur within those intersections or crosswalks, the public body should take immediate action to (1) obtain an exact description of where the “injury” occurred and (2) examine and document the intersection and area immediately surrounding.

ARTICLE BY

Chrissie Peterson
OF
Heyl, Royster, Voelker & Allen, P.C.

One week until the LMA P3 Conference, June 12-13 in Chicago

The National Law Review is pleased to bring you information about the LMA P3 Conference to be held in Chicago June 12-13, 2014.

LMA_P3_WB250x250_Frame2

 

When

Thursday – Friday, June 12-13, 2014

Where

Hyatt Chicago Magnificent Mile
633 N. Saint Clair St.
Chicago, IL 60611

Dig deeper into project management, pricing and process improvement.

The 2013 LMA P3 Conference set the bar high with fantastic breakout sessions, partner presentations and networking opportunities, but this year’s conference looks even more promising.

Join us for P3 – The Practice Innovation Conference, where pricing, project management, and practice innovation experts will discuss the use of various tactics to explore solutions to real issues face by law firms today.

This execution-focused conference will have attendees roll up their sleeves and collectively work out solutions. Click here to view the full conference schedule.

There is still time to register! Register now!

2 more weeks until LMA P3 – Practice Innovation Conference, June 12-13, Chicago, IL

The National Law Review is pleased to bring you information about the LMA P3 Conference to be held in Chicago June 12-13, 2014.

LMA_P3_WB250x250_Frame2

 

When

Thursday – Friday, June 12-13, 2014

Where

Hyatt Chicago Magnificent Mile
633 N. Saint Clair St.
Chicago, IL 60611

Dig deeper into project management, pricing and process improvement.

The 2013 LMA P3 Conference set the bar high with fantastic breakout sessions, partner presentations and networking opportunities, but this year’s conference looks even more promising.

Join us for P3 – The Practice Innovation Conference, where pricing, project management, and practice innovation experts will discuss the use of various tactics to explore solutions to real issues face by law firms today.

This execution-focused conference will have attendees roll up their sleeves and collectively work out solutions. Click here to view the full conference schedule.

There is still time to register! Register now!

2nd Conflict Minerals Reporting and Supply Chain Transparency Conference- June 23-25, Chicago, IL

The National Law Review is pleased to bring you information about the 2nd Conflict Minerals Reporting and Supply Chain Transparency Conference, June 24-25, 2014, presented by Marcus Evans.Conflict-Minerals-250-x-250

Click here to register.

Where

Chicago, IL

When

June 24-25, 2014

What

The 2nd Sustaining Conflict Minerals Compliance Conference will break down each SEC filing requirement as well as examine direct filing examples from specific companies. Discussions will tackle key issues including refining conflict minerals teams to create a more successful conflict minerals management program, managing and developing consistent communication within the supply chain, and building an IT program that will continue to secure data from the various levels of the supply chain.

This conference will allow organizations to benchmark their conflict minerals management program against their peers to more efficiently meet SEC expectations and amend their program for future filings. Seating is limited to maintain and intimate educational environment that will cultivate the knowledge and experience of all participants.

Key Topics
  • Scrutinize the Securities and Exchange Commission (SEC) requirements and evaluate external resources for a more efficient conflict minerals rule with Newport News Shipbuilding, Huntington Ingalls Industries
  • Engineer a sustainable conflict minerals program for future filings with Alcatel-Lucent
  • Integrate filings and best practices from the first year of reporting with BlackBerry
  • Maintain a strong rapport with all tiers of your supply chain to increase transparency with KEMET
  • Obtain complete responses moving throughout the supply chain with Global Advanced Metals

Register today!

LMA P3 Conference – The Practice Innovation Conference, June 12-13, Chicago, IL

The National Law Review is pleased to bring you information about the LMA P3 Conference to be held in Chicago June 12-13, 2014.

LMA_P3_WB250x250_Frame2

 

When

Thursday – Friday, June 12-13, 2014

Where

Hyatt Chicago Magnificent Mile
633 N. Saint Clair St.
Chicago, IL 60611

Dig deeper into project management, pricing and process improvement.

The 2013 LMA P3 Conference set the bar high with fantastic breakout sessions, partner presentations and networking opportunities, but this year’s conference looks even more promising.

Join us for P3 – The Practice Innovation Conference, where pricing, project management, and practice innovation experts will discuss the use of various tactics to explore solutions to real issues face by law firms today.

This execution-focused conference will have attendees roll up their sleeves and collectively work out solutions. Click here to view the full conference schedule.

There is still time to register! Register now!

2nd Conflict Minerals Reporting and Supply Chain Transparency – June 23-25, Chicago, IL

The National Law Review is pleased to bring you information about the 2nd Conflict Minerals Reporting and Supply Chain Transparency Conference, June 24-25, 2014, presented by Marcus Evans.Conflict-Minerals-250-x-250

Click here to register.

Where

Chicago, IL

When

June 24-25, 2014

What

The 2nd Sustaining Conflict Minerals Compliance Conference will break down each SEC filing requirement as well as examine direct filing examples from specific companies. Discussions will tackle key issues including refining conflict minerals teams to create a more successful conflict minerals management program, managing and developing consistent communication within the supply chain, and building an IT program that will continue to secure data from the various levels of the supply chain.

This conference will allow organizations to benchmark their conflict minerals management program against their peers to more efficiently meet SEC expectations and amend their program for future filings. Seating is limited to maintain and intimate educational environment that will cultivate the knowledge and experience of all participants.

Key Topics
  • Scrutinize the Securities and Exchange Commission (SEC) requirements and evaluate external resources for a more efficient conflict minerals rule with Newport News Shipbuilding, Huntington Ingalls Industries
  • Engineer a sustainable conflict minerals program for future filings with Alcatel-Lucent
  • Integrate filings and best practices from the first year of reporting with BlackBerry
  • Maintain a strong rapport with all tiers of your supply chain to increase transparency with KEMET
  • Obtain complete responses moving throughout the supply chain with Global Advanced Metals

Register today!

2nd Conflict Minerals Reporting and Supply Chain Transparency – June 23-25, Chicago, IL

The National Law Review is pleased to bring you information about the 2nd Conflict Minerals Reporting and Supply Chain Transparency Conference, June 24-25, 2014, presented by Marcus Evans.Conflict-Minerals-250-x-250

Click here to register.

Where

Chicago, IL

When

June 24-25, 2014

What

The 2nd Sustaining Conflict Minerals Compliance Conference will break down each SEC filing requirement as well as examine direct filing examples from specific companies. Discussions will tackle key issues including refining conflict minerals teams to create a more successful conflict minerals management program, managing and developing consistent communication within the supply chain, and building an IT program that will continue to secure data from the various levels of the supply chain.

This conference will allow organizations to benchmark their conflict minerals management program against their peers to more efficiently meet SEC expectations and amend their program for future filings. Seating is limited to maintain and intimate educational environment that will cultivate the knowledge and experience of all participants.

Key Topics
  • Scrutinize the Securities and Exchange Commission (SEC) requirements and evaluate external resources for a more efficient conflict minerals rule with Newport News Shipbuilding, Huntington Ingalls Industries
  • Engineer a sustainable conflict minerals program for future filings with Alcatel-Lucent
  • Integrate filings and best practices from the first year of reporting with BlackBerry
  • Maintain a strong rapport with all tiers of your supply chain to increase transparency with KEMET
  • Obtain complete responses moving throughout the supply chain with Global Advanced Metals

Register today!