In 2023, a property tax incentive that reflects Chicago’s mandate of creating and preserving affordable housing within its urban core came into effect. The aim is to encourage development that enables families of modest means to remain in new and existing downtown towers and West and South side neighborhoods.
Signed into law in 2021 by Governor J.B. Pritzker, the Affordable Illinois incentive package stipulates that participating developers in Fulton Market and other high-income downtown neighborhoods retain 20 percent of units within the affordable price range.
This represents a seismic shift from past policy. While Chicago has long required creating a certain amount of affordable housing when developers secure changes to zoning (and other benefits), there has never been an on-site requirement. Developers would generally fulfill their affordable housing obligations by paying fees to the city or constructing such housing in less expensive neighborhoods.
In mid-2023, the first project under the Affordable Illinois law came to fruition, with the 300-unit rental tower The Row Fulton Market completed. Located in Chicago’s most dynamic market, the building features 60 affordable units and promises to be the first of many to use the tax incentive.
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