Adding Tax Abatements on Top of Broadway’s Upzoning is Fiscally Irresponsible | Chicago Tribune Op Ed

By Jack Markowski | Jan 26, 2026, 5:00am CST
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As we’ve seen in the recent budget battles, Chicago is facing profound fiscal challenges. At such a moment, city policy should be guided by a simple principle: Public resources should be used only where they are demonstrably necessary and where they deliver clear public benefit.

Unfortunately, recent City Council actions affecting the 48th Ward — particularly the designation of the entire 48th Ward as a low affordability community (LAC) layered on top of the recent upzoning of Broadway — violate that principle.

The LAC designation unlocks substantial property tax abatements, lasting up to 30 years, for residential developers. These incentives are courtesy of the Affordable Housing Special Assessment Program, which the Illinois General Assembly created in 2021 for a specific purpose: to encourage construction of affordable housing in areas where it would not otherwise be built, most notably downtown Chicago. They are not intended to be a wasteful subsidy for development that is already financially feasible or already required to include affordable units.

Yet that is precisely what has been done in the 48th Ward.

Take the development at 4920 N. Sheridan Road. In October 2024, the City Council passed an ordinance sponsored by Ald. Leni Manaa-Hoppenworth, 48th, to increase the zoning in order to build 31 units of housing on this vacant lot in Uptown. In return, under Chicago’s Affordable Requirements Ordinance (ARO), the developer was required to provide 20% affordable units. By itself, this is good public policy: a valid quid pro quo between the city and a private developer. The city allows more density, and the developer provides new affordable housing that otherwise would not be built, at no direct cost to taxpayers.

Nothing in the City Council approval process for the upzoning of 4920 N. Sheridan suggested that the project was financially infeasible under these terms.

But in April, the City Council passed another ordinance sponsored by Manaa-Hoppenworth designating 4920 N. Sheridan as an LAC, thereby giving the same developer 30-year tax abatements for providing 20% affordable units — the same affordable units that were already required under the previously approved zoning change.

So what changed? Why was this major tax abatement necessary when 20% affordable housing was already required as part of the zoning change?

Providing tax relief where it is not needed is not an incentive; it is a giveaway. It means the city is forgoing badly needed revenue without receiving any additional public benefit in return. Gratuitously providing unnecessary public subsidies to private development violates a basic principle of public finance — that public resources should only be used to the extent necessary to ensure that a desired project gets built. Yet no such analysis apparently was applied to 4920 N. Sheridan.

It turns out that 4920 N. Sheridan is not alone. As of November, the city has used the LAC designation for 18 sites outside of downtown. Was any city financial review performed to support these 30-year tax abatements? The costs to the public are real and long-lasting.

But that’s not the end of the bad news for Chicago taxpayers. In June, the City Council passed legislation again sponsored by Manaa-Hoppenworth, designating the entire 48th Ward as an LAC, the first such designation of a whole ward in Chicago.

Then, this past October, the City Council passed a massive upzoning that increased the density of 2 miles of Broadway in the 48th Ward. Because of this upzoning, every future residential development on Broadway will be required to include 20% affordable units under the ARO. But because of the simultaneous LAC designation, each development will also receive a 30-year property tax abatement for providing the affordable housing that will already be required under the ARO.

Why should developers along this 2-mile stretch of Broadway receive sweeping property tax abatements for doing exactly what the law already requires?

And if Edgewater and Uptown developers in the 48th Ward receive major tax breaks for doing what they are already legally required to do, why stop there? Why not extend the tax breaks to Lakeview, Lincoln Park, Lincoln Square, Bronzeville or any other neighborhood? This certainly undermines the premise that new development provides badly needed tax revenue for the city.

At a time when Chicago struggles to fund basic services, shifting the tax burden away from new development does not make it disappear. It simply transfers that burden onto other taxpayers, including longtime residents and small businesses that are already struggling to pay rising property tax bills. Being an advocate for neighborhood investment and affordable housing should not mean needlessly waiving city revenue with no analysis of need and no measurable public gain.

Chicago can and should pursue affordable housing development throughout the city. But Chicago’s limited resources require discipline, evidence and honesty about tradeoffs. Incentives should be targeted, justified and tied to clear public benefit — not layered on top of existing requirements simply because they are available.

When incentives are granted without necessity, they stop being tools for public good and become costly mistakes. Squandering public dollars is a mistake Chicago cannot afford.

Jack Markowski is former commissioner of the Chicago Department of Housing and former president and CEO of Community Investment Corp. In 2007, he authored Chicago’s original Affordable Requirements Ordinance.