Politics
River North Council Approves Inclusionary Zoning Ordinance, Aligning Requirements With Comparable Cities
The measure sets a 20 percent affordable unit requirement for new developments of 10 or more units, applying to projects in the riverfront and downtown districts.
How we reported this
The River North City Council voted 7-2 on July 8 to enact the Inclusionary Zoning Ordinance, which requires developers to set aside 20 percent of units as affordable in projects of 10 or more dwellings.
The vote follows the release of the city's 2025 Housing Needs Assessment, which documented a shortfall of 12,000 units priced below market rates for households earning under 60 percent of area median income. Council members referenced rising construction permit applications along the riverfront corridor as the immediate trigger for updating local rules that had remained unchanged since 2018.
Effects on River North Households
Residents in the downtown corridor and near the 400 block of River Drive stand to see new rental options priced at levels tied to local income data, with the ordinance directing that at least half of the affordable units target households earning 50 percent or less of median income. Property managers in existing buildings will not face retroactive changes, but new construction slated for 2027 will incorporate the set-aside units before certificates of occupancy are issued.
The legislation states that developers may satisfy the requirement through on-site construction, off-site units within two miles, or payment into a city housing trust fund at a rate of $150,000 per required unit. Local advocates note that similar payment options exist in peer municipalities of 150,000 to 250,000 residents, though River North's distance limit for off-site units is shorter than the five-mile radius used in several neighboring jurisdictions.
City budget documents for fiscal year 2026 allocate $2.5 million to the housing department for monitoring compliance and maintaining the trust fund, drawn from general revenue rather than new taxes. The ordinance applies only to projects receiving no other city subsidies, distinguishing it from rules in some peer cities that layer inclusionary requirements on top of tax-increment financing approvals.
Staff will begin accepting compliance plans on August 1, with the first quarterly report on unit production due to the council in January 2027. The government projects the ordinance will generate 120 affordable units in its first full year of operation based on current permit volumes.