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St. Charles changes fee in lieu of affordable housing

Fee lowered for single-family construction, raised for multi-family

ST. CHARLES – Developers in St. Charles now face a different city fee for residential units that do not meet the city’s requirement for affordable housing.

Under St. Charles’ inclusionary housing ordinance, 10 percent of all new housing must be affordable in developments of more than 15 units or the developer must pay a fee in lieu per noncompliant unit.

The City Council on March 12 raised the per unit fee in lieu of affordable housing for multifamily developments and lowered it for single-family construction at the recommendation of the St. Charles Housing Commission. The fee is now uniform for both types of housing.

“A single fee is cleaner and easier, and I think the number is fair,” 1st Ward Alderman Dan Stellato said.

Aldermen established a uniform fee of $36,410 per noncompliant unit, regardless of what type of housing is built.

This amount is higher than the 2017 fee of $5,000 per noncompliant unit for multifamily developments and roughly half of the former $72,819 fee per noncompliant unit for single-family home construction.

“The former fee was not palatable or competitive in terms of attracting new developers,” said Liz Eakins, St. Charles Housing Commission chairman.

St. Charles officials annually re-evaluate the city’s fees in lieu of affordable housing.

Housing commission member John Glenn said the city’s former multifamily housing fee in lieu of $5,000, even if there are a lot of units, doesn’t bring in a lot of money.”

“With all the multifamily development going on right now, it would behoove us to raise it from $5,000,” St. Charles School District 303 housing commission liaison Carolyn Waibel said.

Most new construction in the city lately has been multifamily housing because of market demand. Among those developments are Prairie Centre at the old St. Charles mall site on Route 38 and Prairie Winds along the north side of Bricher Road between Randall and Peck roads, both starting construction this year on the city’s northwest side. In addition, a multifamily development proposal is under consideration for the Charlestowne Mall property on the city’s east side.

The city also had a uniform fee in lieu in 2017, but it was much higher – $72,819 per noncompliant unit for both multifamily and single-family housing.

The Illinois Housing Development Authority established that affordable currently equates to no more than $1,025 in monthly rent for a two-bedroom unit.

The city currently has $730,000 in funds collected from developers for fees in lieu, which it sets aside with the intent of spending the money on affordable housing initiatives.

Aldermen are considering contributing all or part of the money it collects in these fees to the Kane County Affordable Housing Fund.

The pooling of city and county resources could incentivize creation of affordable housing in St. Charles, city officials said.

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