Constitutional Challenge to Chicago's Affordable Housing Requirements Ordinance

On September 30, 2016, District Court Judge Pallmeyer struck down a constitutional challenge to Chicago’s affordable housing program.  Plaintiff Hoyne Development is a real estate developer in Chicago.  He purchased a commercial property in Chicago’s 47th ward and successfully rezoned it.  However, Plaintiff, who does not agree with the Affordable Requirement Ordinance, chose to pay a $200,000 fee, rather than dedicate ten percent of the new units as affordable housing for rent or sale for thirty years.  Plaintiff, therefore, challenged this housing program arguing that “the government may not require a person to give up a constitutional right . . . in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property.”  Judge Pallmeyer rejected Plaintiff’s contention holding that the Affordable Requirements Ordinance is a permissible use restriction that does not violate the Constitution.[1] 

The Affordable Requirements Ordinance was established in 2003 and expanded in 2007.  The program applies to new or rehabilitated housing developments and was meant to ensure that affordable housing continues to be available in the City of Chicago.  This Ordinance requires developers provide ten percent of their units to individuals earning less than Chicago’s median income, “which is $72,400 for a family of four.”[2] 

This decision is a very important one for the City of Chicago whose rent prices over the last two to three years continue to rise.[3]  According to the Chicago Tribune, this is likely a result of the decline in demand for homeownership and has triggered an increased demand for rental housing, to the point that the supply cannot keep up.[4]  The demand for rental housing has attracted commercial developers like Plaintiff to invest in Chicago housing.

This means that in addition to the low-income families getting pushed out of the City, most middle class workers and students will too.  Chicago is home to a plethora of schools and small businesses, which means that developers will greatly affect the demographics of those who can live in Chicago. This in turn will also result in more residents having to travel longer distances.  Furthermore, the demographics of this City are at stake.  As of right now, Chicago continues to be a very diverse place to live.  However, this will easily change, especially if the City allows developers to opt-out by paying a measly fee.  A $200,000 fee to a commercial developer is nothing compared to profit that they can expect from high-priced rent.  The City should, instead, require that these developers pay a proportional fee for every year they choose not to comply.  This would make it so that they pay a price that is proportional to their decision not to invest in those who are already here. For now, Judge Pallmeyer’s decision will protect Chicago from turning its back on low-income families who would be pushed out of their homes. 

[1] The court relied on a Supreme Court case that held that a regulation is a permissible use restriction when it is “not a dedication of property to the government akin to physical occupation of the land.”  Home Builders Ass'n of Greater Chi. v. Chicago, No. 15 C 8268, 2016 U.S. Dist. LEXIS 135084, *10 (N.D. Ill. Sep. 30, 2016).


[2] Judge Nixes Challenge To Chicago’s Affordable Housing Reg, LAW360.COM, (last visited October 5, 2016). 


[3] “Chicago’s median rent for a two-bedroom apartment in April was $1,940, a 1.8 percent hike over the same month the same month the previous year, according to the Apartment List, an apartment rental marketplace.  The median price for a two-bedroom apartment in Indiana listed at $800.00 by Apartment List.”  Apartment Rental Costs Continue to Rise, CHICAGOTRIBUNE.COM,


[4] Id.