Sheldon Baskin knew what he wanted to build on the site of an old convent. The Chicago-area builder and developer planned to rehab the convent structure, converting it into a mix of affordable, market-rate, and elderly housing for buyers and renters. Approved by municipal planners, the diversified housing proposal "wasn't just fantasy," Baskin says.

But it might as well have been, thanks to local activism. "By the time we got done, we had $800,000 single-family homes and $400,000 condos," Baskin says. Adaptive reuse in the project vanished along with its affordability. "We had to tear the convent down."

Such exasperating situations have become all too familiar to Chicago-area builders, who have had increasingly difficult times getting affordable housing projects approved in the affluent--and often job-rich--suburbs of Chicago. "People have tended to equate affordable housing with ghettos," says Bill DeBruler, a Libertyville, Ill.-based builder who does affordable and market-rate homes. "It's the NIMBY syndrome."

Now Illinois builders who want to do affordable housing will get a second chance. Under a new state law signed by the governor in late 2003, builders can appeal the denial of affordable housing projects to a state board if that rejection comes from a locality where less than 10 percent of the housing stock qualifies as affordable, based on household income levels for its county.

While the implementation won't happen anytime close to soon--the board won't be formed until 2006 and won't hear its first appeal until 2009--builders and others hope the new law will give them some much-needed leverage.

Massachusetts model

The Illinois legislation, initially called the Builders' Appeal Act, is based on a decades-old Massachusetts law. Known as Massachusetts 40B, the regulation gives builders streamlined permitting for affordable projects and the right to appeal local denials. It has resulted in the construction of 30,000 homes for low- and moderate-income buyers, according to state documents.

Such results caught the attention of Business and Professional People for the Public Interest (BPI), a Chicago nonprofit that lobbies for affordable housing and other issues. After several years of affordable housing research, the Massachusetts law "seemed the most successful in terms of providing hard units," says Nick Brunick, director of the regional affordable housing initiative at BPI, which worked with other groups to pass the law this year.

The Massachusetts legislation (known informally as an "anti-snob zoning act") has also produced controversy over the years, as localities protest the loss of control. But builders like it. "Home builders and developers support the law because they view it as important not only for building affordable housing, but for building any housing in Massachusetts," says Benjamin Fierro, legislative counsel to the HBA of Massachusetts. "Traditional single-family builders who never got anywhere close to a government program have been faced with no choice but to use 40B as a tool."

Not far enough?

The Illinois law doesn't go as far as its Northeastern counterpart. While BPI had pushed for comprehensive permitting to streamline approvals, just as Massachusetts does, the Midwestern version only contains the appeals board. Supporters say it's a start. "My hope would be that the towns would not want to go through the [appeals] process, that this would provide them some political cover [to accept an affordable project], because they will know if they're passing a judgment that is too arbitrary, you have some recourse," Baskin says.

As valuable as that option may be, some builders aren't convinced it will solve the biggest obstacle to building affordable housing: people's attitudes. "Either you want your social servants to live in your town or you don't," says Buz Hoffman, president of Lakewood Homes, who believes affordable set-asides with median-income limitations in affluent areas are only bandages on a much bigger problem. "I still can't put a teacher or a fireman or a policeman in there. It doesn't address the social issue of affordable housing, and it's not really affordable housing."

Learn more about markets featured in this article: Chicago, IL.