Why Is It So Expensive To Build Affordable Housing In Chicago?

City officials recently opened the Encuentro Square affordable housing complex, featuring 89 units for families earning below the area median income in Logan Square and Hermosa. The project, costing $67. 5 million, equates to over $750,000 per apartment, raising alarms about the sustainability of affordable housing development in the city. Experts highlight that construction costs have surged from approximately $400,000 per unit in 2019 to nearly $750,000 in 2024, driven by high inflation and a lengthy approval process. Richard Day noted that these increases surpass even luxury market-rate construction costs.

Developers face rigorous application processes for low-income housing tax credits, further complicating development. High legal and design standards, along with environmental costs, contribute to the overall expenses. Mayor Brandon Johnson's administration aims to streamline approvals and enhance funding for affordable housing, but experts stress that more comprehensive measures are necessary to combat the city's housing crisis. Without addressing these challenges, the goal of creating affordable living options for families may remain elusive.