2021 ARO
The following steps provide a general overview of the 2021 ARO process, but for a more comprehensive and detailed description, it is essential to review the 2021 affordable requirements ordinance and rulebook.
Stage 1
Prior to receiving approval or passage from a City of Chicago Commission/Committee or City Council, the Developer must submit an ARO Intake Application along with the necessary supporting documents:
- Applicant’s contact information.
- Residential development project information.
- Affordable Unit Details and Square Footage worksheet.
- Dimensioned Floor Plans with affordable units highlighted.
- Floor plans should include unit numbers, square footage, and Type A designation.
Note: Developer is responsible for submitting the ARO Intake Application and supporting documentation at least two (2) months prior to the publication date of the meeting agenda for the targeted Commission/Committee meeting.
If the development is located in the Fulton Market Innovation District (FMID) - north of Lake Street - the Developer must submit the following at least three (3) months prior to the publication date of the meeting agenda for the targeted Commission/Committee:
- 20% ARO Proforma (DOH template)
- 30% ARO Proforma (DOH template)
- Rental Comp Report/Market Analysis
- Financial Gap Analysis 20% ARO vs. 30% ARO
If the Developer is partnering with the Chicago Housing Authority (CHA) or an Authorized Agency, the following must be submitted:
- A signed acceptance letter from CHA or authorized agency
If the Developer is proposing off-site ARO units, the following must be submitted:
- Off-site unit application as detailed in Article 6.2.5 of the ARO Rules and Regulations
Note: Once all required documentation is received, DOH will review the ARO proposal and provide feedback to the Developer. The ARO Intake Application will be executed and become the Affordable Housing Profile (AHP) if approved.
The Developer is responsible for ensuring all DOH material is reviewed and approved before a development is presented to a City of Chicago Commission/Committee or City Council:
- Affordable Housing Profile (AHP)
- ARO Intake Application
- Unit Details Summary (ARO and Market Rate)
- Area Median Income (AMI) Breakdown for ARO Units
- Dimensioned Floor Plans
- Commission/Committee Presentation
- ARO Summary Slide(s)
- Planned Developments (PD)
- Applicable ARO PD Statement
Stage 2
The developer must record the Inclusionary Housing Agreement (IHA) prior to the issuance of any building permit. To start this process, the Developer is responsible for submitting all required due diligence documents:
- Recorded Deed
- Owner’s Title Policy
- Organizational Structure Documents (LLC, Corporation, Partnerships)
- Resolutions and Consent of Entity to Enter into the IHA
- Certified City Ordinance
- Executed Affordable Housing Profile (AHP)
- Affordable Unit Details and Square Footage worksheet
- House Number Certificate with any referenced surveys
Please review the ARO IHA/AHA due dilligence document for detailed instructions on preparing and recording the IHA.
Note: DOH will review all due diligence documents and work with the Department of Law (DOL) to draft the IHA after full submittal. Lastly, DOH provides a final draft of the IHA to the Developer for review.
The Developer is responsible for obtaining all required signatures from all parties involved to record the IHA. The Developer records the signed IHA and exhibits with the Cook County Recorder of Deeds. And if applicable, the Developer will pay any agreed-upon in-lieu fees at this time.
- After recording the IHA, the Developer must submit a copy of the recorded IHA to DOH.
- DOH will release the permit hold after receipt of recorded IHA and/or evidence that the payment-in-lieu has been made.
Note: Failure to record the IHA with the AHP attached as an exhibit, or any other exhibits required by DOH, or any errors found post recordation, will require the Developer to re-record the IHA.
When the construction of the ARO units are complete and upon receipt of a Certificate of Occupancy (COO) by the Department of Buildings (DOB), the Developer must reach out to ARO staff to schedule an ARO site visit:
On-site unit review process
- For ARO on-site units, submit the Certificate of Occupancy issued by the Department of Buildings (DOB) to ARO staff
- After receipt of the Certificate of Occupancy, ARO staff will schedule the ARO site visit for on-site units
- If standards for the construction of affordable units are met, DOH will approve and release a Certificate of Compliance for the ARO units
- If standards for the construction of affordable units are not met, DOH will issue a punch list. Upon completion of the DOH punch list items, the developer/GC shall submit adequate proof of completion including photos, written descriptions, etc.
- The project moves forward to the marketing and leasing process
Off-site units review process
For ARO off-site units, the Developer must submit the following:
- A letter on company letterhead stating the project is complete and requesting a final site visit
- A copy of the front and back of each building permit for each property with all DOB signoffs
- A copy of the certificate of occupancy for each property (as applicable)
- Final general contractors and owner’s sworn statements
- All final waivers of lien or a title report showing no liens for each property
- As-built survey (new construction)
- Final Issued for Construction Permitted Construction Drawings
- List of any buyer changes (if applicable, for-sale units only)
- A copy of the recorded IHA
After receipt of the required documentation, DOH staff will schedule the ARO site visit for off-site units.
- Upon completion of the site walkthrough, DOH CAC will issue a punch list document with required items to address (if applicable)
- Upon completion of the DOH CAC punch list items, the developer/GC shall submit adequate proof of completion including photos, written descriptions, etc. (if applicable)
- DOH CAC will issue an executed punch list completion document to be signed by the owner and contractor (if applicable)
- This document should be sent to ARO staff for record-keeping as a prerequisite for a final memorandum of compliance
- If standards for the construction of affordable units are met, DOH will approve and release a Certificate of Compliance for the ARO unit
- The project moves forward to the marketing and leasing process
Developers must complete this form if their development(s) is subject to Chapter 2-44-085 of the Municipal Code of the City of Chicago (the “2021 ARO”). Before starting the submission process, please gather and complete all the necessary documentation outlined in Article 5.1.2 of the ARO Rules.
Developers must complete this spreadsheet with specific unit details (market rate and affordable units), including features and amenities. This spreadsheet and floor plans will be attached to the ARO Intake Application.
The applicable ARO PD Statement must be submitted to DOH for review and approval. Following DOH approval, the developer will insert the ARO PD Statement into the compiled PD application.
The ARO includes a requirement that the in-lieu fee be adjusted annually, beginning on January 1, based on the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (CPI) for all Urban Consumers for the Chicago metropolitan area.
2021 ARO In-Lieu Fees Table - effective January 1, 2025
Federal, state, and local laws place restrictions on the income of households assisted through various Department of Housing (DOH) programs. The maximum income level for DOH programs varies, according to the policies and regulations that guide each program. The income limits refer to total household income, which includes the income of all adults in the household. Income limits are for the Chicago-Naperville-Joliet, IL HUD Metro FMR Area.
Section 2-44-085 (the ARO) of the Municipal Code of Chicago (MCC) sets out Applicability standards in Sections (C) and (D). The ARO Rules provide clarification, where needed.
The required documents needed to begin drafting the Inclusionary Housing Agreement (IHA) are outlined in this document. The Agreement can take up to 45 business days to prepare once all required documents are received, developers are encouraged to submit all required due diligence documents as soon as possible.
The Architectural/Technical Standards (ATS) manual is a support for developers, architects, and general contractors for the design and construction of quality housing.
In May 2021, the Illinois General Assembly passed HB2621, which included a number of provisions on affordable housing. Among other provisions, this bill creates three tiers of property tax incentives for new construction and rehabbed residential buildings with seven or more units that set aside between 15% and 35% of their units as affordable.
In February 2021, the Chicago Plan Commission updated the FMID Plan to allow residential uses north of Lake Street in the FMID and established a 30 percent affordability goal for new residential projects in that area.
Under the Affordable Requirements Ordinance (ARO), affordable homes/units created that are ‘for sale’ or designated for homeownership are administered by the Chicago Housing Trust.