Can 'Live Near Work' work better? - Metropolitan Planning Council

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Can 'Live Near Work' work better?

With an eye toward the growing jobs-housing mismatch, the Metropolitan Planning Council and Illinois Housing Council recommend a more objective scoring system for awarding Low Income Housing Tax Credits so that more housing affordable to the local workforce is built near job centers.

A handful of recent reports on housing and transportation cost trends in the Chicago region serve to reinforce a point already too well-known for many people: it’s getting really hard to live near work.

Some people choose to live far from where they work, but many, many more simply have no other choice.  Horrendous commutes are the result of many things – a lack of mass transit options that effectively move people from work to home and back, fuel and toll prices that do not accurately reflect true costs, a cultural romance with the automobile, personal preference – but above all else, the rise of the “extreme commuter” can be attributed to the jobs-housing mismatch.  The fact of the matter is that many people either cannot afford or cannot find a home close to their places of employment.  The two-fold dilemma behind the jobs-housing mismatch is that affordable homes are not built close to job centers, and new jobs are not created in areas with ample supplies of affordable homes.  Affordability is one side of the equation, availability the other.

In the Chicago region, the Metropolitan Planning Council (MPC) and Illinois Housing Council (IHC) are working with the Illinois Housing Development Authority (IHDA) – the state’s housing finance agency - to change this. For years, IHDA has offered an array of programming and funding mechanisms to increase the supply of housing for a variety of populations in need of affordable and supportive housing.  As in most states, the federal Low Income Housing Tax Credit is the main funding source for affordable housing development. The allocation of tax credits is determined by the Qualified Allocation Plan (QAP), a ranking system designed to evaluate development proposals based on state housing goals outlined in the Illinois Comprehensive Plan; developers earn points for meeting specific goals, and those points, once tallied, determine whether or not the development receives tax credits, as well as the number and impact of those credits.

The QAP is periodically revised so that it remains a timely and efficient system of producing more homes for more families.  With another round of revisions looming in the near future, MPC and IHC are proposing ways to help IHDA revise the QAP and allocation guidelines for Live Near Work points

These tax credits, while a positive step in the right direction, have not been as effective as they could be in enabling working families to live in job-rich areas.  An MPC and IHC analysis of 2005 and 2006 Live Near Work allocations shows they are not producing affordable homes in the six-county Chicago area in either job-rich areas or in communities currently lacking affordable options.  MPC and IHC believe this system can work better, and recommend IHDA uses a more objective scoring system for encouraging housing affordable to the local workforce near job centers.

While the current system creates some hurdles for the development community, the proposed scoring system relies on data that is updated annually, and in some cases quarterly, and could easily be turned into an interactive Web tool, which would allow would-be housing developers to score their ideas based on location.  Such ease and predictability are keys to success.

Ultimately, the goal of Live Near Work is more homes where needed most – close to existing jobs and in communities where workforce housing options are scant.  By revising the Live Near Work criteria during the upcoming update of its QAP, IHDA can base future investments on objective criteria that identify areas with demand for and short supply of homes for working families.

There is no silver bullet for easing, let alone erasing, the jobs-housing mismatch.  An array of strategies will be needed if we are to overcome this dilemma.  The governor’s commitment to housing, as demonstrated by the state’s annual Comprehensive Housing Plan, has helped.  IHDA’s crucial involvement in the Regional Housing Initiative has also helped.  Local zoning ordinances that enable mixed-use and mixed-income housing in proximity to transit would help.  Employer-assisted housing has proved to be an effective strategy.  Inter-jurisdictional housing trust funds that more efficiently produce homes for working families by sharing resources between neighboring municipalities are being discussed throughout the Chicago region. 

Likewise, a state funding system that allocates scarce resources to quality affordable housing developments in job-rich areas would help, but it is not enough.  IHDA is not to blame for the region’s shortage of quality homes near quality jobs, but MPC and IHC hope that by working together to revise the current Live Near Work points system in the QAP, it can be major part of easing that shortage.

For more information on MPC’s efforts to ease the jobs-housing mismatch, on Live Near Work, or on its work to revise IHDA’s QAP, please contact Robin Snyderman, MPC housing director, at (312) 863-6007 or rsnyderman@metroplanning.org, or Josh Ellis, MPC community development associate at (312) 863-6045 or at jellis@metroplanning.org.

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