Saint Charles staff: affordability falls below 10%; housing trust fund used for loans, projects

City staff told the Planning and Development Committee that Saint Charles' affordable housing stock fell to 8.3% in calendar year 2024, driven by rising home values and the addition of market-rate rental units. The report, prepared annually to inform local housing policy and track compliance with the state's affordable housing planning and appeals act, showed owner-occupied affordable units declined to 6.6% (defined in the report as homes valued under $249,000) and rental affordability was 11.6% in 2024.

Staff said the owner-occupied decline followed a 12% increase in home values while incomes rose only about 1.5%. On the rental side, staff said the small decrease in rental affordability was the result of adding new market-rate units to the housing stock rather than an across-the-board rent increase. Staff noted Saint Charles remains exempt under the state act until the state's next report (state reported Saint Charles at 17.2% in 2023), so the city's exempt status continues until the state updates its figures, anticipated in 2028.

Committee members discussed policy direction. The committee reiterated a prior preference for requiring developers to provide affordable units on-site under the Inclusionary Housing Ordinance rather than accepting fee-in-lieu payments; staff confirmed they have communicated that preference to developers. Staff said some developers have indicated that incorporating affordable units at the required price point can make projects difficult to finance, but staff and committee members said the city will continue to hold the stated position and work with developers.

The committee also received an update on the housing trust fund. Staff reported a current balance of about $2,300,000, with $1,700,000 remaining after commitments to pending projects. The committee was given a breakdown of recent trust fund use: about $215,000 has been spent on six home-rehab loans, two purchase-rehab projects, and construction of a single new home; $1,700,000 was approved for proposed projects in recent years, including $1,100,000 previously allocated to the Anthony Place 2 senior apartments project (which did not move forward). Two projects totaling $660,000 in approved trust-fund awards are moving forward: a Habitat for Humanity house on a city-donated lot on Dean Street and renovations to Carroll Tower apartments.

The Housing Commission is examining possible new uses of the trust fund, including a grant-based home-rehab program targeted to lower-income homeowners and urgent repairs, and exploring temporary rental assistance. Staff said the commission is convening partners (including Lazarus House) to gather information and expects to present recommendations to the committee in the coming months. Committee members requested regular updates on the Housing Commission's work and asked staff to return to a future committee meeting with additional information.

During the public comment period, a resident urged the city to consider aging-in-community policies when designing housing initiatives and suggested coordinating property-maintenance inspections and county resources to identify homeowners who need repairs.

Ending: Staff will continue to engage the Housing Commission, refine proposals for new trust-fund uses, and report back to the Planning and Development Committee; City Council policy direction on requiring on-site affordable units remains in effect.