Thursday, December 11, 2008
News / Clout City When $55 million isn't enough
Posted by Mick Dumke on 12.11.08 at 08:09 PM
Every three months city officials present a report to aldermen detailing their efforts to build and preserve housing for low- and moderate-income families. During the last few years they’ve been the bearers of pretty good news—through taxes and other programs, the citywide development boom yielded millions of dollars for “affordable” housing—and the council hearings were dominated by debates over who was doing a greater job of making it happen.
Needless to say, times have changed.
At the housing committee meeting Thursday aldermen still had plenty of praise for housing commissioner Ellen Sahli and her department, and committee chairman Ray Suarez still defended the Daley administration’s record even when it wasn’t being attacked. “Chicago has probably, in my opinion, the best housing plan of any city,” he said.
But the economy and housing crisis are obviously having an impact. Since the beginning of the year, Sahli said, the city has earmarked about $129 million to build affordable rental housing, $124 million for single-family homes, and another $14 million for preserving existing housing; the city anticipates that it will have set aside a total of $378 million before the end of 2008. But that would be down significantly from last year’s total of about $661 million, according to an analysis by the nonprofit Chicago Rehab Network.
The need, of course, has gone in the other direction. Chicago had a shortage of rental housing even before people started losing their homes in staggering numbers--10,268 foreclosure filings [PDF] in 2006, 13,872 in 2007, and 13,799 this year just through just the end of October [PDF].
While some of the properties may have been resold and reoccupied by now, thousands are vacant and boarded up. Over the last several months aldermen, police, and other community leaders have been worrying aloud that the empty buildings are already pulling down neighborhood property values and contributing to crime, especially in parts of the south and west sides where the foreclosures are clustered.
Sahli told aldermen that some help is on the way from the feds: $55 million expected to arrive early in 2009 as a result of the Neighborhood Stabilization Program passed by Congress last summer. The money will go to buying and rehabbing foreclosed properties and putting them back on the market for low-income families. City officials say they'll focus on 25 neighborhoods with the highest foreclosure and subprime mortgage numbers.
But Sahli warned that the money won’t go as far as it might sound—the value of the property foreclosed in Chicago in 2007 alone was $1.2 billion; the entire stabilization program has just $4 billion to allocate nationwide. “We have to be strategic about how we use our resources," she said, "and magically turn $55 million into a whole lot more.”
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The City of Chicago will receive an allocation of $55,238,017 for the HUD Neighborhood Stabilization Program (NSP). The City expects to leverage NSP funding with an additional $58 million in private financing. Program activities include acquisition of abandoned foreclosed properties to be rehabbed for rental and for sale housing, demolition of dilapidated properties, land banking, new construction, homebuyer financing and administration. The City will provide NSP funding to acquire 425 properties to be rehabbed. Of this amount, 150 will be rehabbed for rental units, and 275 will be rehabbed for homeownership. An additional 100 properties will be acquired for demolition. These properties will be land banked and the resulting vacant lots will be sold to developers and nonprofit agencies, who will construct new homes. The City anticipates that 60 of the 100 properties acquired for demolition will be eventually developed for new homes within the plan period. The City is in discussions with Mercy Housing, Inc. about the potential for Mercy to sponsor the creation of a new organization to administer the program. Mercy Housing, Inc. is headquartered in Minnesota, and operates programs in Chicago. The new organization will subcontract to pre-qualified developers and nonprofit organizations to implement the program. I have read the plan, and make the following recommendations. 1. Keep the administration of the program in-house. Coordinate the services of the Department of Housing, Department of Planning and Development, Mayor’s Office of Workforce Development, Mayor’s Office for People with Disabilities, the Department on Aging, Police Department, and the Department of Human Services to address the issue of foreclosures holistically. 2. Encourage a broad base of churches, local community based organizations and entrepreneurs to participate in the NSP program. 3. Leverage NSP funds with programs such as HOME, and others, to build the capacity of churches and other community based entrepreneurs and nonprofits to take advantage of the program. 4. Provide counseling for new home buyers, and work with homeowners who are in danger of losing their homes. 5. Reduce displacement of current residents by creating a fund to purchase homes from persons who are in danger of foreclosure, and allowing them to rent them, with an option to repurchase the homes at a later date. (I got this suggestion from my Dad, Mr. Theodis Leonard). 6. Use some of the NSP funds to create employment and job training opportunities for local residents. A good model is the Cook County NSP, in which they will use $1million to start 5 new businesses to work with contractors to include green technology in newly rehabbed units. 7. Include a description as to what the private financing mechanisms will be, and who will be providing the financing. 8. It is very likely that NSP funds will be allocated in areas that are also TIF districts. Where applicable, a local TIF oversight panel should provide advice into the use of the NSP funds. If no such body exists in the NSP target area, then the community development advisory committee that provides advice into the use of the City’s CDBG funds should perform this function. 9. At a very minimum the City should host public meetings periodically informing the public of the program, its goals and objectives, and progress towards those goals. These meetings should be recorded digitally, and made available on CAN TV and the City’s website. 10. Develop housing that is affordable to North Lawndale residents. As of 2000, the median household income in North Lawndale was $18,000. 11. Allow units that cannot be sold in a timely fashion to be rented. North Lawndale already has its share of new homes that have been boarded up. 12. Address issues such as safety and affordability for senior citizens and the disabled. If your organization or development company is considering applying for these funds, please contact Ms. Katie Ludwig at 312-742-0552 or Katie.ludwig@cityofchicago.org. The funding guidelines and applications are expected to be released very soon, and there will be a very short window to respond. It is recommended that interested organizations start planning now.
http://cbs2chicago.com/local/Jackson.Congressman.Blagojevich.2.885386.html Congressman jackson is in trouble!
Earth to city council: Chicago's Residential Landlord Tenant Ordinance is the cause of the disappearance of affordable rental housing. It's better for property owners to board up or tear down.
Your next City Worker Patrick McDonough. The jig is up! You and your wife should move back to Chicago from Des Plaines..
Patrick McDonough vs City of Chicago, et al. Case No. 6:07-cv-02732 Subpoena for deposition scheduled for December --, 2008 for Frank Coconate. Happy Holidays DesPlaines Resident Patrick McDonough!
Hi, I'm Valerie Jarrett. Some of you may remember me as the mastermind leading the CTA board from 1995-2005. Others may remember me from Habitat, leading undesirables out of Chicago. Either way I will be doing well and I'm thrilled to be an agent of change.
Mayor Daley do the right thing for the citizens of Chicago and resign immediately.
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