Skewing, Kurtosis and Low-Income Housing Tax Credit (LIHTC) Subsidies Threaten Current Geneva Lower-Income Households

Skewing measures the symmetry of a data distribution, while kurtosis is a measure of the heaviness of the distribution’s tails. The distribution of the total cost of domiciling by household in Geneva is approximated in figure 16 directly below. This distribution, when compared with Batavia’s figure 16, shows that Geneva is skewed to the right towards a higher cost of living, and the distribution “curve” is kurtotic, i.e., the tails are heavier. Batavia’s cost distribution looks more “normal” (i.e., Gaussian/binomial) as it is more symmetric, more peaked in the middle, and has lighter tails.

Geneva Illinois Housing market data real estate research (

Batavia Illinois Housing market data real estate research (

The data for these above graphs are from the 2020 American Community Survey of the US Census. The 2016 version of this survey provided the data that resulted in Geneva’s landing on the relatively short list of Illinois communities deemed “deficient” in affordable housing. Geneva barely missed a passing grade. Batavia passed.

Geneva’s 7.7% affordability was the sixth-highest of the forty-six state-wide <10% “flunkers,” and Geneva was highest in Kane County among the five Kane “flunkers.” Campton Hills (twenty square miles to Geneva’s ten and with half Geneva’s population) leads the State in unaffordability at 0.8%. A thinking person’s approach to Geneva’s “affordability crisis” might have been to demand a recount, as the “count” was made by an algorithm, not an actual count.

The fatal flaw in these pseudoscientific affordability conclusions is that the denominators were determined by arbitrary and capricious community boundaries set mostly long ago but still evolving (such as Campton Hills, incorporated in 2007), and not on a rational sampling method. Plus, the smaller the denominator, the higher the random variance/sampling error.

As examples, most of the “failing” communities, like Naperville, Lake Forest, and Lake Bluff, simply ignored the toothless, feel-good Illinois law passed twenty years ago that required them to create a remedial plan. Geneva did create a plan. For some reason known only to an inner circle, Geneva hit on the Federal Low-Income Housing Tax Credit (“LIHTC”) program as the solution to its cherry-picked phantom “problem.”

Then, during a raging lethal pandemic that led to the emergency suspension of many laws and rules, the Geneva City Council solicited the single-employee Burton Foundation to solve its supposed affordable housing crisis. Despite the Governor’s Emergency Executive Orders that sought to “…encourage public bodies to postpone consideration of public business when possible,” the Geneva City Council found postponement impossible for its pet LIHTC project. In fact, Geneva accelerated, to the point of an ambush, the LIHTC process under the cover of the pandemic.

The graph above shows that Geneva’s “problem” with affordable housing is not a shortage of 45-unit LIHTC projects. Rather, the “problem” is a shortage of about 200-250 rental apartments.

The reasons for the housing difference between the two adjacent half-townships of Geneva and Batavia have many possible historical origins. Geneva’s SE quadrant is largely occupied by the legacies of the Kane County Poor Farm: the landfill, the ballpark, the sheriff’s office, and former jail sites, plus a forest preserve, courtesy of Col. Fabyan. Elsewhere, tax-exempt County Government buildings occupy considerable real estate as does the not-for-profit tax-exempt cash-cow hospital.

The monthly owner-cost graphs above that compare Geneva with Batavia reveal the biggest difference is that the “left tail” of the Geneva graph is “missing.” This left tail is where the “missing” Geneva apartments would have been concentrated. Batavia’s ratio of rented to owner-occupied households is roughly twice that of Geneva’s ratio.

Ironically, Geneva has just received a proposal for a 250-unit “attainable rent” development at Kirk and Route 38. See:

If built, this development would have “solved” Geneva’s affordability “problem.” However, while Geneva focused on a small scale, staggeringly expensive, and local property tax-subsidized LIHTC project, other nearby communities were and are building apartments in exceptionally large numbers. Mill Creek has apartment complexes. The former Charlestown Mall site is a formidable potential competitor. The apartment complex (Prairie Centre) at the former St. Charles Mall on Route 38 just west of Geneva is already built, etc. Look north to Pingree Grove and south to Route 59 at the toll road. No regional shortage of apartments is apparent.

WARNING: Cornerstone Housing Group of Nebraska has done LIHTC projects. If this project is simply a 5x Emma’s Landing it could create a 5x squeeze on existing Geneva lower-income households by multiplying the impact times five of the special deeply discounted property tax treatment of LIHTC projects. Searches of the 18-page preliminary narrative document for “low income” and “LIHTC” return zero hits. In many other respects, the narrative describes a LIHTC financed project. If this turns out to be the case without mentioning it in the narrative, transparency remains absent without leave in Geneva.

Geneva has approved the 45-unit Emma’s Landing LIHTC housing project at an average construction cost of over $450,000 per unit. Geneva used a low-ball, “Made As Instructed” appraisal to sell the Emma parcel for at least $400,000 less than its value – a gift to the Burton Foundation. Geneva spent $300,000 on a “Charrette” that resulted in a failed Mill Race Inn 130-unit apartment proposal, a double-cross of the developer, and hard feelings all around. Geneva is giving away sales tax money and grants to a failed Dunkin project whose owner has not paid the property taxes. Geneva subsidized a meat market to the tune of 36% of the total startup costs or about $700,000. This project abuts Harrison Street Elementary School, which has the lowest ratio of playground area per pupil in the district, and Geneva gave away that adjacent property just as 250 units of housing are looming nearby. Geneva gave away $400,000 to a burger/sushi restaurant in an architectural box, causing the re-developer of the historic Little Owl/Wrate Building directly across the street to abandon and board up its far more important project.

The neighborhoods in Geneva comprised of homes valued in the $200,000-$300,000 are where residents of more modest means generally live. These Geneva households with less discretionary income are most vulnerable to upward pressure on the highly regressive property tax. Geneva is also locked into an expensive long-term electricity contract with Prairie State Power, the largest carbon polluter in Illinois:

Batavia, which has a smaller piece of Prairie State Power than Geneva, has already diverted funds from other sources (sales tax) to subsidize electricity to soften the blow on households. Geneva gives its sales tax revenue to developers who will play football against existing Geneva businesses on a tilted pitch.

According to the various inconsistent and politically slanted “fact sheets” promulgated by the Geneva City Council, Emma’s Landing will produce somewhere between ten and one hundred new school children. The fiscal impact risk on school costs from Emma’s Landing is confounded by the “law of small numbers” (Poisson distribution). About 12% of District #304 total students have Individualized Educational Plans (IEPs). Understandably, the expense of these students can be double the average or more. Of course, no member of the City Council probed this issue, and the School Board never weighed in. If twenty school children reside at Emma’s Landing require IEPs, the added expense for School District 304 could be $1mil/yr.

Geneva desperately needs new leadership. The City Council has not had a spirited public debate on any topic since the “chicken coops in the backyard” kerfuffle. Nearly every important issue is secretly decided before the public even knows about it. The City Council has no control over its own agenda nor seems interested in seizing control. No one in the city organization understands the plain language of the Geneva Municipal Code. Robert’s Rules are merely suggestions. And what about the sweetheart Emma’s Landing LIHTC deal with the Fellhauer couple/Burton Foundation and all the failed expensive give-away projects? Today’s Geneva is more akin to Madiganistan than the town I knew in the 1950s.

Next to be addressed in this series will be the harmful effects of Tax Increment Financing (TIF) districts on low-income Geneva households and on property taxes of all households in School District 304, including those outside the City of Geneva. Where was the School Board of District 304 when the City Council stole the kid’s assets and raised their parents’ liabilities? Could it be the School Board was properly focusing on the pandemic crisis at hand and overlooked the City of Geneva using the pandemic’s fog-of-war to pick the kids’ pockets?

2 thoughts on “Skewing, Kurtosis and Low-Income Housing Tax Credit (LIHTC) Subsidies Threaten Current Geneva Lower-Income Households

  1. Hi Tom,
    As usual, you raise a crucial issue. Affordable housing is not astrophysics, it is much more complicated than that. Home prices in Geneva are rising quickly, and mortgage rates are up. Possibly the latest generation is less enamored with homeownership. This might be, in part, because many of their parents who bought homes before ~2008 are just now getting their heads back above water. Adam Smith’s “invisible hand” may be coming into view through the rent window.
    Best, Rod


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