A new city program approved Wednesday by the Chicago City Council will offer vacant lots to affordable housing developers for $1 each.
Developers can purchase eight to 20 city-owned lots, each with a maximum appraised value of $125,000, to build single-family and two-flat homes in neighborhoods primarily on the South and West sides, according to a news release from Mayor Rahm Emanuel's office.
Roughly 5,000 of the city's vacant lots will be available through the program, called City Lots for Working Families. All lots in the program must have residential zoning.
The program is aimed at reducing blight and promoting homeownership, according to the release.
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The total number of homes that will be built will depend on market demand, according to city officials. The profit margins for developers will depend on a number of factors, including design costs, contracting costs and other variables.
Once the homes are built, they will be sold to qualified buyers with incomes up to 140 percent of area median income, or $110,600 for a family of four. The homes will be priced at approximately $150,000 to $300,000. Buyers will be required to use the home as their primary residence for at least five years. Homebuyers will be subject to an approval process conducted by the city to ensure they are within household income limits and that no more than 30 percent of their income will be allocated toward their mortgage, city officials said.
The city also plans to streamline the acquisition process and reduce permit fees to make sales to developers much easier and encourage greater participation among small and minority developers.
"Land acquisition costs are some of the biggest barriers to development of new homes," said Mayor Rahm Emanuel in a statement. Eliminating such costs, he said, would boost construction and support "more jobs and more economic development in our neighborhoods."