Idea 2: Double the potential size of future buildings in downtown zoning districts instead of doubling the size of the zones themselves.

Mayor Rahm Emanuel and the City Council recently passed an ordinance that extends the boundaries of downtown zoning districts where tall and dense buildings can be constructed. The ordinance also modifies how developers and property owners receive density bonuses.

The logic is that developers would pay more to build bigger over a wider area in exchange for monetary contributions to the city to support affordable housing. This strategy has two fatal flaws: (1) It's an uphill battle to build where you're not wanted. Downtown zoning now encroaches into neighborhoods that are not dense and in which zoning decisions are largely relegated to local alderman. Counter-intuitively, this is especially true if those developments contain affordable housing. NIMBYism (Not In My Back Yard) simply dominates zoning decisions in much of Chicago, resulting in far less development than projected. (2) Developers won't opt in when market conditions slow. The new downtown zoning designation is elective, obligating any project that participates to either make 10% of the units "affordable" or pay an affordable housing contribution (of $175,000 for rentals / $225,000 for condos) for the same number of units (e.g., A 100-unit rental project can build 10 affordable units or pay $1,75 million). That's a heavy load in anything other than frothy times.

I firmly believe developers should pay their fair share, contribute to the city's affordable housing needs and work with local stakeholders. However, I challenge readers to consider whether developers are more likely to venture into areas subject to additional public scrutiny and affordable housing mandates or continue building up the rest of the city.

Alternatively, what I believe the city should have done is grant developers permission to build bigger, denser buildings in the existing urban core where residents are generally more supportive of taller neighbors. Doing so in the existing downtown district would double the potential tax base of its most valuable real estate.

Here is the controversial part: Do it without requiring a zoning change. Unlike the approved plan, which views zoning changes as an opportunity to extract payment, this plan would encourage development with no strings attached. It's the carrot without the stick.

Owners can currently increase their property's FAR (floor area ratio) through rezoning or planned development processes, but it's an arduous, time-consuming and often futile endeavor. One of the keys to a scalable and quick solution to the budget problem is more “as of right” development, which eliminates the need for rezoning and all the red tape associated with it.