Introduction to Affordable Housing Crisis
Taxing property owners whose rentals sit empty for most of the year and using the money to build housing on vacant land could be part of the solution to Chicago’s affordable housing crisis. That’s what three University of Chicago undergraduate students argued, during the inaugural Kreisman Initiative Housing Challenge Symposium. The team was chosen as the first-ever winners of the symposium, which the university plans to continue as a thought-exercise for housing-related issues.
The Proposal
While their proposal would only make a small dent in addressing the city’s affordable rental crisis, it’d be a welcome change from the city’s “status quo” that’s preventing more housing from being built, the students said. And the team — who won the challenge last month — found other cities have implemented similar vacancy taxes. The University of Chicago’s Mansueto Institute for Urban Innovation launched the Kreisman Initiative Housing Challenge Symposium this year to spur undergraduate and graduate students to come up with solutions that will help address the city’s housing issues.
The Challenge
Emily Talen, professor in the division of the social sciences and director of the Urbanism Lab at the University of Chicago, said a new challenge will be presented each year. This year’s topic was affordable rental housing — looking at how and where Chicago could create 126,125 affordable rental homes over the next five years. The figure is based on a 2024 report from Housing Action Illinois and the National Low Income Housing Coalition. The report said Chicago has a shortage of 126,125 affordable homes for those with the lowest incomes and 32 affordable rental homes for every 100 extremely low-income renter household.
The Winning Team
Students Adam Jensen, Kelli Lynch and Elayna Whiteman brought home the challenge’s $5,000 prize for their proposal, titled “Reclaiming Space: Using Public Land and Vacancy Taxes to Build and Revitalize Chicago’s Neighborhoods.”
The Proposal Details
The team proposed a vacancy tax that would be implemented through the city’s Department of Planning and Development. The tax revenue would be used to create infill housing. The idea stemmed from each students’ experience seeing vacant buildings in Chicago. Whiteman lives near the former John Fiske Elementary School, one of 50 schools that shuttered in 2013 by then-Mayor Rahm Emanuel. She said seeing vacant buildings like John Fiske made the team realize the potential such buildings have. Much of the housing crisis is because of a lack of supply, they said, and the vacant buildings could be re-imagined into homes.
How the Vacancy Tax Would Work
The trio presented several ways in which a vacancy tax could work in Chicago. One would be charging owners who left an available housing unit vacant for about 180 days a flat fee of $500. The team’s research indicated the flat fee system could raise $30 million annually to support infill housing, Whiteman said. But a model the team believes will better address the city’s needs is taxing owners the equivalent of one month’s rent for their vacant units, or between $2,000 and $3,000 per unit, Whiteman said.
Creating Anchor Zones
Money raised through the vacancy tax would then be used to develop “anchor zones,” according to the team. The anchor zones are currently vacant buildings that the team identified as sites ripe for small, mixed-use redevelopment, like Chicago’s vacant schools. The anchor zones would also be near transit to allow for more community-driven engagement, Jensen said. “These would be mixed-used buildings where you could have commerce, you could have access to residencies — a lot of different things,” Lynch said. “Ultimately, the community would be able to decide where their priorities were.”
Potential Impact
Depending on how funding is doled out, the team projects the vacancy tax could create between 2,000 and 7,000 new units of affordable housing a year, Whiteman said. The tax could also help bring some housing costs down because owners will be incentivized to fill their units. The team said its solution would need to work in concert with other city programs and incentives, and may take more than the five-year time frame the housing challenge proposed.
Conclusion
The proposal by the University of Chicago students offers a potential solution to the affordable housing crisis in Chicago. By taxing vacant properties and using the revenue to build infill housing, the city can increase the supply of affordable housing and reduce the number of vacant buildings. The team’s proposal is a step in the right direction, and it is hoped that it will be considered by city officials as a potential solution to the housing crisis.
FAQs
Q: What is the main proposal of the University of Chicago students?
A: The students propose a vacancy tax on property owners whose rentals sit empty for most of the year, with the revenue used to build infill housing.
Q: How much could the vacancy tax raise annually?
A: The team’s research indicates that the flat fee system could raise $30 million annually to support infill housing.
Q: How would the vacancy tax work?
A: The tax would be implemented through the city’s Department of Planning and Development, and would charge owners who left an available housing unit vacant for about 180 days a flat fee of $500, or the equivalent of one month’s rent for their vacant units.
Q: What is the potential impact of the vacancy tax?
A: The team projects that the vacancy tax could create between 2,000 and 7,000 new units of affordable housing a year, and could also help bring some housing costs down.
Q: How would the revenue from the vacancy tax be used?
A: The revenue would be used to develop “anchor zones,” which are currently vacant buildings that would be redeveloped into mixed-use buildings with commerce, residences, and other community-driven engagement opportunities.
