An Ordinance Amending
" THE HIGHLAND PARK CODE OF 1968", as Amended,
to Establish an Affordable Housing Trust Fund
and Related Revenue Measures

WHEREAS, the City of Highland Park, in the exercise of its home rule powers under the Illinois Constitution of 1970, in order to promote and protect the health, safety, morals, and welfare of its residents and the general public, has the authority to provide for affordable housing within the City; and

WHEREAS, the City Council of the City of Highland Park has conferred upon the City of Highland Park Housing Commission, pursuant to Section 33.1101(A) of "The Highland Park Code of 1968", as amended (“Code”), all powers necessary or appropriate to allow the Housing Commission to encourage, promote, and engage in the development of low- and moderate-income housing projects within the City; and

WHEREAS, the City Council, in November 1998, adopted a resolution authorizing a work plan, jointly developed by the Housing Commission, Plan Commission, Human Relations Commission, and Historic Preservation Commission, to address the need for affordable housing in the City and to charge the Housing Commission with developing an affordable housing implementation plan for the City of Highland Park; and

WHEREAS, on January 22, 2001, based on the recommendation of the Housing Commission and Plan Commission, the City Council adopted the “Affordable Housing Needs and Implementation Plan” as an element of the City’s Master Plan (the “Affordable Housing Plan”); and

WHEREAS, to address the affordable housing needs of low- and moderate- income households comprised of individuals who live or work in the City, the Housing Commission has recommended that the City Council establish a Housing Trust Fund as set forth in the Affordable Housing Plan, to provide financial resources (a) to promote, preserve, and construct long-term affordable housing; (b) to provide housing-related services to low- and moderate-income households; and (c) to support not-for-profit organizations that are actively engaged in addressing the affordable housing needs of low- and moderate-income households in the City; and

WHEREAS, as set forth in the Affordable Housing Plan, the Housing Trust Fund is also intended to provide financial resources to address the affordable housing needs of low- and moderate-income households, including, without limitation, (a) persons employed in the City but financially unable to live in the City; (b) seniors on fixed incomes; (c) single-parent families; (d) young households; and (e) persons with disabilities who require affordable and accessible housing; and

WHEREAS, as part of the establishment of the Housing Trust Fund, the City Council, based on recommendations of the Housing Commission, will appoint an Advisory Committee to assist the Housing Commission in the management and operation of the Housing Trust Fund; and

WHEREAS, demolition of certain existing structures and developments has led to a reduction in the diversity of the City’s housing stock and affordable housing opportunities and subsequent redevelopment has in many cases contributed to property value increases that further the difficulty of providing affordable housing in the City; and

WHEREAS, to address these concerns and in conjunction with the establishment of the Housing Trust Fund, the City Council has found and determined that it is necessary and appropriate to increase the existing demolition permit fee provided in Section 170.003(C)(10)-12 of City Code to more accurately reflect the City's administrative expenses incurred in administering the application for and issuance of demolition permits; and

WHEREAS, the City Council has also found and determined that it is necessary and appropriate to impose a special affordable housing tax on certain demolition activities that result in the reduction of the affordable housing stock in the City or that otherwise adversely impact the availability of affordable housing in the City; and

WHEREAS, the City Council has further found and determined that it is necessary and appropriate for the City to dedicate the revenue received from the City's demolition permit fee and the new affordable housing demolition tax to the Housing Trust Fund for its use in the provision of affordable housing in the City; and

WHEREAS, in conjunction with the establishment of the Housing Trust Fund, the Housing Commission intends to provide initial resources for the Housing Trust Fund by causing a transfer of funds from the Frank B. Peers Housing Association, a not-for-profit subsidiary of the Housing Commission, to the Housing Trust Fund; and

WHEREAS, in accordance with the authority of Article XI of City Code, the Housing Trust Fund shall be administered by the Housing Commission with the assistance and recommendations of the Advisory Committee;

NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HIGHLAND PARK, LAKE COUNTY, ILLINOIS THAT:

SECTION ONE.
ESTABLISHMENT OF THE HOUSING TRUST FUND.

Title III, Chapter 33, Article XI, entitled Housing Commission, of "The Highland Park Code of 1968", as amended, shall be, and it is hereby, amended by adding a new Section 33.1133, entitled "Housing Trust Fund," which new Section 33.1133 shall hereafter be and read as follows:

"Section 33.1133. Housing Trust Fund

(A) Definitions
(B) Historical Background and Justification
(C) Housing Trust Fund Established
(D) Scope of Housing Trust Fund Operations
(E) Advisory Committee
(F) Eligibility Requirements
(G) Review and Approval of Applications
(H) Conditions
(I) Available Funds
(J) Staff

(A) Definitions.

The following words, terms, and phrases, when used in this Section, shall have the meanings ascribed to them in this Subsection, except where the context clearly indicates a different meaning:

ADVISORY COMMITTEE. The committee established pursuant to Subsection E of this Section to provide guidance to the Housing Commission on the activities of the Housing Trust Fund.

AFFORDABLE HOUSING. Decent, safe, sanitary, and appropriate housing that Low- and Moderate-Income Households can own or rent without having to devote more than approximately 30 percent of their gross income for monthly Housing Expenses.

AFFORDABLE HOUSING PLAN. The “Affordable Housing Needs and Implementation Plan”, adopted by the City Council on January 22, 2001, as part of the City of Highland Park Master Plan.

COMMUNITY LAND TRUST. The community land trust that may be established for the purposes set forth in the Organizational Framework Recommendations adopted by the Housing Commission on October 24, 2001.

ELIGIBLE ACTIVITIES. The housing activities set forth in Paragraph F(3) of this Section for which the Housing Trust Fund may provide financial support.

ELIGIBLE APPLICANTS. Applicants that satisfy eligibility requirements to receive Housing Trust Fund awards, as set forth in Paragraph F(2) of this Section.

HOUSING EXPENSES. The following types of housing expenses: (1) rent and utilities for rental housing; and (2) debt service (principal and interest), property taxes, and home insurance for home ownership.

HOUSING TRUST FUND. The housing trust fund established by this Section with the central purpose to provide financial resources to address the Affordable Housing needs of individuals and families of Low- and Moderate-Income Households who live or work in the City.

LOW-INCOME HOUSEHOLDS. Households that have incomes that do not exceed 80 percent of the median income for the Chicago area, as established and defined in the annual schedule published by the Secretary of Housing and Urban Development, and adjusted for household size.

MODERATE-INCOME HOUSEHOLDS. Households that have incomes that do not exceed 120 percent of the median income for the Chicago area, as established and defined in the annual schedule published by the Secretary of Housing and Urban Development, and adjusted for household size, or such higher income limit as may be established for a local, county, state, or federal housing program.

(B) Historical Background and Justification.

The housing goals of the City’s Master Plan emphasize the City’s commitment to cultural and economic diversity, diversity of housing stock and costs, and the availability of affordable housing in neighborhoods throughout the community. The diversity of the City’s housing stock has declined as a result of increasing property values and housing costs and a reduction in the availability of affordable housing. Demolition of certain existing structures and developments has also led to a reduction in the diversity of the City’s housing stock and affordable housing opportunities and subsequent redevelopment has in many cases contributed to property value increases that further the difficulty of providing affordable housing in the City.

Due to these factors, among others, the City of Highland Park has experienced an increase in housing values, but a decrease in the supply of Affordable Housing and income diversity. In response to these developments, on January 22, 2001, the City Council adopted the Affordable Housing Plan as an element of the City of Highland Park Master Plan. One of the primary recommendations of this Affordable Housing Plan is for the City to establish a Housing Trust Fund.

(C) Housing Trust Fund Established.

(1) Creation; Management and Administration. There is hereby established the Housing Trust Fund, to be held as a separate fund within the City, for the benefit of the Housing Commission. The City, by and through its Director of Fiscal and Administrative Services, shall be responsible for the day-to-day investment and fiscal maintenance and management of the Housing Trust Fund. The day-to-day fiscal maintenance and management shall be undertaken pursuant to the approved investment policies and practices used by the City for other similarly-held funds. Except for disbursements and other actions taken as part of the day-to-day fiscal maintenance and management of the Housing Trust Fund, no disbursements of the Housing Trust Fund shall be made except by the Director of Fiscal and Administrative Services, or his or her designee, upon the written direction of the Housing Commission, by resolution duly adopted. The Advisory Committee shall assist the Housing Commission with the organization, operation, and implementation of the Housing Trust Fund as set forth in Subsection (E) of this Section.

(2) Purpose. The purpose of the Housing Trust Fund is to provide financial resources to address the Affordable Housing needs of individuals and families of Low- and Moderate-Income Households who live or work in the City by promoting, preserving, and producing long-term Affordable Housing; providing housing-related services to Low- and Moderate-Income Households; and providing support for not-for-profit organizations that actively address the Affordable Housing needs of Low- and Moderate-Income Households. The Housing Trust Fund will provide financial support for a wide variety of Eligible Activities that serve Low- and Moderate-Income Households, including, without limitation, (a) persons employed in the City but financially unable to live in the City; (b) seniors on fixed incomes; (c) single-parent families; (d) young households; and (e) persons with disabilities who require accessible Affordable Housing.

(3) Distribution and Use of Housing Trust Fund. The Housing Commission shall be solely responsible for the distribution of the Housing Trust Fund resources and funds in accordance with the requirements of this Section. Distribution of funds from the Housing Trust Fund shall be in the form of grants or loans or such other funding mechanisms that support the purposes of the Housing Trust Fund. Any Housing Trust Fund money unused at the end of any year shall remain in the Housing Trust Fund for future Eligible Activities, pursuant to the requirements of this Section.

(D) Housing Trust Fund Operations.

The Housing Commission shall be solely responsible for the operation of the Housing Trust Fund, including, without limitation, the following:

1. establishing annually Housing Trust Fund goals, and reporting and presenting those goals to the City Council;
2. establishing policies, funding priorities, Housing Trust Fund program requirements, procedures for disbursing Housing Trust Fund awards, and an annual budget to be reported to the City Council prior to the beginning of each fiscal year of the Housing Trust Fund;
3. approving Housing Trust Fund awards for Eligible Activities;
4. monitoring Eligible Activities funded by the Housing Trust Fund;
5. evaluating Housing Trust Fund activities; and
6. reporting no less than annually to the City Council on the expenditures, accomplishments, and activities of the Housing Trust Fund.

(E) Advisory Committee.

(1) Creation. There is hereby created a Housing Trust Fund Advisory Committee. The Committee shall assist the Housing Commission in the management and administration of the Housing Trust Fund. The Committee shall be subject to the provisions of the Illinois Open Meetings Act.

(2) Purpose. The Advisory Committee shall make recommendations to the Housing Commission regarding its program and operations, including, without limitation: (a) the goals for the Housing Trust Fund; (b) the Housing Trust Fund’s operating budget and projected expenditures and revenue; (c) the Housing Trust Fund’s funding and award policies and priorities; (d) the Housing Trust Fund’s program requirements; (e) the Housing Trust Fund’s procedures for disbursing Fund resources; (f) the review of applications for Housing Trust Fund awards; (g) the granting of awards; (h) the monitoring of Eligible Activities funded by the Housing Trust Fund; and (i) the evaluation of Housing Trust Fund activities.

(3) Members. The Advisory Committee shall consist of seven members -- two standing Committee members as identified in Subparagraph (a) below (“Standing Committee Members”), and five at-large Committee members as identified in Subparagraph (b) below (“At-Large Committee Members”).

(a) Standing Committee Members. The following members shall be Standing Committee Members of the Advisory Committee.

(i) One member of the Housing Commission, as selected by the Chairman, with the advice and consent of the Commission, shall be a member of the Advisory Committee and shall serve as its chairperson.

(ii) The City Council Liaison to the Housing Commission shall be a member of the Advisory Committee.

(b) At-Large Committee Members. In consultation with the Housing Commission, the remaining five At-Large Committee Members shall be appointed by the Mayor, with the advice and consent of the City Council. The At-Large Committee Members shall reside in or represent institutions, organizations, or businesses that serve the City. The At-Large Committee Members shall represent diverse constituencies, such as lenders, housing professionals, attorneys, employers, and members of Low- and Moderate-Income Households.

(4) Term.

(a) Standing Committee Members. The initial and subsequent terms of the Standing Committee Members shall be three years.

(b) At-Large Committee Members. The initial term of three of the At-Large Committee Members shall be two years, and the initial term of the remaining two At-Large Committee Members shall be three years. All subsequent terms of the At-Large Committee Members shall be three years. No At-Large Committee Member shall serve more than two consecutive terms.

(5) Replacement.

(a) Standing Committee Members. If a Standing Committee Member (i) shall be removed or resign, (ii) shall no longer hold their respective position on the Housing Commission or the City Council, as the case may be, or (iii) for any other reason shall not be able to carry out the duties of a Committee member, then a substitute member shall be appointed in the same manner as the original appointment. The substitute member shall serve on the Advisory Committee for the remainder of the term being filled.

(b) At-Large Committee Members. If an At-Large Committee Member (i) shall be removed or resign, (ii) shall no longer satisfy the eligibility criteria set forth in Subparagraph (E)(3)(b) of this Subsection, or (iii) for any other reason shall not be able to carry out the duties of a Committee member, then a substitute member shall be appointed in the same manner as the original appointment. The substitute member shall serve on the Advisory Committee for the remainder of the term being filled.

(6) Compensation. All members of the Advisory Committee shall serve without compensation; provided that authorized expenses may be reimbursed in accordance with applicable City regulations.

(7) Removal. Advisory Committee members may be removed in the manner provided in Section 33.001(E) of this Code.

(F) Eligibility Requirements.

(1) Purpose of Eligible Activity. Each Eligible Applicant shall be required to demonstrate that the requested Eligible Activity will advance and support the purpose of the Housing Trust Fund, as set forth in this Section.

(2) Eligible Applicants. Developers, not-for-profit organizations, housing owners/operators, and units of government shall be Eligible Applicants for Housing Trust Fund resources. The Housing Trust Fund shall seek proposals from Eligible Applicants and make awards for Eligible Activities based on the priorities set forth in Subsection (F)(4) and on the eligibility guidelines, program requirements, and process established and maintained by the Housing Commission. The Housing Commission, upon the advice and recommendation of the Advisory Committee, shall develop and issue eligibility guidelines, program requirements, and application forms for Housing Trust Fund grants and loans. Eligible Applicants may apply to the Housing Commission for Housing Trust Fund awards for Eligible Activities.

(3) Types of Eligible Activities. The following housing-related activities are the types of activities that may receive Housing Trust Fund resources:

(a) Housing production, including, without limitation, new construction, rehabilitation, and adaptive re-use.
(b) Acquisition, including, without limitation, vacant land, single-family homes, multi-unit buildings, and other existing structures that may be used in whole or part for residential use.
(c) Rental assistance.
(d) Home ownership assistance.
(e) Preservation of existing housing.
(f) Weatherization.
(g) Emergency repairs.
(h) Housing-related support services, including home ownership education and financial counseling.
(i) Capacity grants for not-for-profit organizations that are actively engaged in addressing the Affordable Housing needs of Low and Moderate-Income Households.
(j) Any other activity that the Housing Commission determines would address the City's Affordable Housing needs.

(4) Priorities For Trust Fund Awards.
Among proposals for Eligible Activities that otherwise meet established program requirements and eligibility criteria, priority shall be given (a) to applications submitted by the Community Land Trust, (b) to applications that provide the longest term of affordability of Affordable Housing, and (c) to applications that provide housing to serve the needs of households with the lowest household incomes.

(G) Review and Approval of Applications.

All complete applications for Housing Trust Fund awards shall be submitted to the Housing Commission and reviewed by the Advisory Committee. The Advisory Committee shall make recommendations to the Housing Commission to approve or deny an application. The Housing Commission shall make the final decision to approve or deny all applications for funding by the Housing Trust Fund.

(H) Conditions.
As a condition to any Housing Trust Fund award for any Eligible Activity, the Eligible Applicant shall first, among other applicable requirements as established from time-to-time by the Housing Commission, execute and record such agreements, conditions, and restrictive covenants, or other similar instruments, as shall be required by the Housing Commission (“Conditions”). Among other requirements, the Conditions may bind the Eligible Applicant and the property, if applicable, to the requirements of this Section and provide that all awards shall be used in strict compliance with the requirements of the Housing Commission and the Conditions. The Conditions may also include a requirement that if the property or development is no longer being used for Affordable Housing pursuant to the requirements of the specific award, the Eligible Applicant or successor owner of the property or development may be required to reimburse the Housing Trust Fund for up to 100 percent of the award, plus applicable interest.

(I) Available Funds.
The Housing Trust Fund is authorized to accept and utilize funds, property, and other resources from all proper and lawful public and private sources, including, without limitation, the funds dedicated to the Housing Trust Fund from the imposition of the demolition permit fee pursuant to Section 170.003(C)(10) – 12 of the City Code, and from the affordable housing demolition tax pursuant to Subsection 170.040(G) of the City Code. The City Council may make additional funds available, as it deems necessary and appropriate. The Housing Commission may provide additional financial resources to the Housing Trust Fund from any available, proper and lawful Housing Commission fund or source including, without limitation, transfers from the Frank B. Peers Housing Association, a not-for-profit subsidiary of the Housing Commission, to the Housing Trust Fund.

(J) Staff.
The City, on behalf of, and in consultation with, the Housing Commission, and pursuant to the City’s standard employment policies, may employ such personnel as are approved by the Housing Commission and as are necessary to assist the Housing Commission in the administration of the Housing Trust Fund, including, without limitation, the following: (1) to staff the Advisory Committee; (2) to administer the application and award process; (3) to identify opportunities for providing Affordable Housing; (4) to identify funding sources and possible partners for providing Affordable Housing; and (5) to educate the community, including City residents and employers, about the City’s Affordable Housing initiatives.”

SECTION TWO.
DEMOLITION PERMIT FEE.

Section 170.003(C)(10)-12 of “The Highland Park Code of 1968", as amended, shall be, and it is hereby, amended in its entirety so that said Section shall hereafter be and read as follows:

"12. Fee for demolition or removal permit. The fee for a permit to demolish or remove a structure shall be five hundred dollars ($500). The funds received by the City for the fee imposed pursuant to this Section shall be dedicated and transferred to the “Housing Trust Fund” established and operating pursuant to Section 33.1133 of the City Code."

SECTION THREE.
DEFINITION OF DEMOLITION.

Subsection (E) of Section 170.040 of “The Highland Park Code of 1968”, as amended, shall be, and it is hereby, deleted in its entirety and replaced by the following:

“(E) Definitions. For purposes of this Section 170.040, the meanings of words and phrases used in this Section 170.040 shall have those attributed to them in Section 24.005 of the Code; except that “demolition" shall mean any act or process within the control of the owner of any building or structure that results in the removal or destruction of the structure or building in whole or in part to the extent of 50 percent or more of the structure or building as existed prior to the commencement of such act or process.”

SECTION FOUR.
AFFORDABLE HOUSING DEMOLITION TAX.

Section 170.040 of "The Highland Park Code of 1968", as amended, shall be, and it is hereby, amended by the addition of a new Subsection G, entitled "Affordable Housing Demolition Tax", which new Subsection G shall hereafter be and read as follows:

"(G) Affordable Housing Demolition Tax.

(1) Tax Imposed and Dedicated. Any person granted a demolition permit under this Section shall pay an affordable housing demolition tax of $10,000 in addition to the demolition permit fee set forth in Section 170.003(C)(10)-12 of this Code and all other applicable fees and charges. Payment of the affordable housing demolition tax shall be due upon issuance of a demolition permit by the Department. The funds received by the City for the fee imposed pursuant to this Subsection shall be dedicated and transferred to the “Housing Trust Fund” established and operating pursuant to Section 33.1133 of the City Code.

(2) Exceptions. Notwithstanding the general requirement set forth in Paragraph (1) of this Subsection, the affordable housing demolition tax shall not apply under the following circumstances upon filing of an application for a waiver, or for a rebate of a previously paid tax, as the case may be, on a form provided and prepared by the City:

(a) If the applicant and the Housing Commission enter into an agreement for the provision of “Affordable Housing” (as defined in Section 33.1133 of this Code), by the applicant in conjunction with the demolition that would otherwise be the subject of the affordable housing demolition tax. Any such agreement shall specifically provide for the waiver or rebate of the affordable housing demolition tax under this Subsection.

(b) If the applicant establishes, through a professionally prepared appraisal or other reliable evidence, to the satisfaction of the Director of the Department of Community Development, that the building or structure replacing the building or structure that is the subject of the demolition permit constitutes Affordable Housing under Section 33.1133 of this Code.

(3) Applicability. Imposition of the tax imposed pursuant to this Subsection shall not apply to any demolition for which a complete and proper application for the demolition permit was on file with the City on or before May 29, 2002, being the effective date of this Subsection."

SECTION FIVE.
CONFORMING DEMOLITION DEFINITION.

Section 24.005 of "The Highland Park Code of 1968", as amended, shall be, and it is hereby, amended by replacing the current definition of "Demolition" with the following new definition:

"Demolition: Any act or process within the control of the owner of any Landmark or regulated structure within a Historic District that results in the removal or destruction of the Landmark or regulated structure in whole or in part to the extent of 50 percent or more of the structure or building as existed prior to the commencement of such act or process.”

SECTION SIX.
SEVERABILITY.

It is the expressed intent of the City Council that should any provision or portion of the amendments set forth in this Ordinance, or their application to any person, entity, or property, be held invalid by a court of competent jurisdiction, the remaining provisions of the amendments set forth in this Ordinance, and their validity, enforceability, and application to any person, entity, or property, shall not be impaired by any such holding. The remaining provisions shall be interpreted, applied, and enforced to achieve, as near as may be, the purpose and intent of the amendments set forth in the Ordinance to the greatest extent permitted under applicable law.

SECTION SEVEN.
EFFECTIVE DATE.

This Ordinance shall be in full force and effect after its passage, approval, and publication in the manner provided by law.

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