Riverwoods advances first reading of affordable housing ordinance; trustees debate fee-in-lieu and land-dedication options

The Riverwoods Board of Trustees moved forward on a first reading of an ordinance to add affordable-housing requirements to Title 13 of the Riverwoods code, a draft the village attorney described as based on models used by nearby villages.

Under the draft, for-sale developments would face a 10% affordable-unit requirement (or a cash fee in lieu set by the village's annual fee schedule); multifamily rental developments would be required to provide 7.5% of units as affordable, with a minimum of 5% provided on-site and up to 2.5% satisfied by fee in lieu. The attorney said these proportions mirror approaches used in villages such as Arlington Heights and Skokie and are designed to differentiate rental and for-sale products.

The ordinance defines income bands for affordability: low-income households would be those at or below 60% of area median income; the draft proposed moderate-income levels at 80% (and for owner-occupied units suggested a range up to 120% of area median to encourage on-site affordable for-sale units). The ordinance would require covenants that "run with the property" for 30 years when units are provided on-site for sale.

Trustees raised multiple concerns and alternatives. Trustee Clayton opposed any fee-in-lieu option, calling it "selling our principles" and arguing the village should insist on onsite affordable units and pursue grant partnerships and external affordable-housing developers instead. Trustee Jamerson and others said fee-in-lieu could be useful if the village used the funds or land dedications to create concentrated affordable developments (for example, accepting a land dedication on a larger tract and using developer funds to build all-affordable housing there).

Trustee Smith asked for clarification on tenure and covenants; the attorney explained that for-sale units accepted as satisfying the requirement would be covered by 30-year restrictive covenants that limit resale price and require income verification for subsequent buyers. "The price at which it can be resold always is constrained by what is then affordable to someone meeting these income thresholds," the attorney said.

Trustees debated the practical effect of fees in lieu: some argued fees might never produce enough revenue to produce a standalone affordable project in Riverwoods, while others said fees could be used to acquire a site or to subsidize development through partnerships. Trustee Clayton said he could not support an ordinance that included fee-in-lieu. The motion for first reading carried; trustees directed staff to continue study and to provide examples and data from comparator communities.

What happens next: This is a first reading; trustees requested additional analysis, examples from Arlington Heights and Skokie, and clarification of how in-lieu funds would be held and spent before final action.