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Renters stressed

With more renters paying unaffordable rents and foreclosures and unemployment continuing, we could see “a surge of homelessness” that rivals the recession of the early 1980s — unless the federal government steps in with “a sustained intervention,” said Sheila Crowley of the National Low Income Housing Coalition.

Crowley spoke Tuesday at the release of a new study by the Metropolitan Tenants Association which found that half of Chicago’s renters are paying over a third of their income for rent, with nearly 30 percent paying over half their income.

The study is intended encourage Obama administration efforts to rebalance housing policy, which has long been criticized by advocates as favoring home ownership over rental and low-income housing.

Based on information from MTO’s tenant hotline confirmed by census data, the study found the proportion of rental households has decreased on the North and South Lakefront, where they previously predominated, while rising on the Northwest and Southwest Sides, traditionally characterized by home ownership.

Those areas often have fewer needed services, fewer shopping and transportation options, and community groups less geared toward tenant issues, said John Bartlett of MTO.

In addition, tenants are increasingly housed in smaller buildings, often owned by individuals rather than real estate partnerships. These landlords may be more likely to have financial problems and thus “more likely to have trouble getting repairs done or keeping utilities on” — and also more likely to face foreclosure, Bartlett said.

And after foreclosure, banks are more likely to vacate smaller properties than to continue renting them, he said. And often maintenance deteriorates or stops entirely.

There are some steps the city could take, Bartlett said. A “just-cause eviction ordinance” would give security to tenants who pay their rent and follow the rules, and would “recognize the importance of creating stable tenancies.” He called for 20 percent of TIF funds to be used for affordable housing, and for strategies to encourage landlords to maintain their properties.

But citing a shortage of 180,000 affordable rental units in Cook County, he said the problem requires a federal response.

National Housing Trust Fund

The report calls for fully funding the new National Housing Trust Fund, increasing the HUD budget with more funding for both project-based subsidized housing and vouchers, reenacting the requirement of one-for-one replacement of public housing, and increased use of nonprofit developers to build and manage affordable housing.

Crowley credited the Obama administration with reversing the decline in HUD funding relative to need and for proposing a $1 billion allocation for the trust fund in the 2010 HUD budget. The fund — the first new federal program in 35 years for building and preserving low-income housing — was created a year ago but its funding stream was diverted to mortgage refinancing efforts.

As a potential revenue source she pointed to the federal mortgage interest deduction. At $80 billion, it’s nearly twice the size of the entire HUD budget. It allows deductions up to a million dollars for two homes, is claimed by less than a quarter of homeowners, and three-fourths of the benefit goes to the top 50 percent of taxpayers, she said.

Reducing the cap on the deduction would save billions, and changing the benefit to a tax credit — as proposed by President Bush’s tax reform commission — would save billions more and extend it to all homeowners.

The benefit “doesn’t encourage home ownership; it encourages people to get bigger houses and bigger mortgages,” she said.

MTO’s hotline, funded by the city, has taken more than 150,000 calls since 1994, collecting information and tracking data while assisting tenants. The study found that 70 percent of callers were women, and most requested assistance improving physical conditions of their buildings, including security.

“Many of these calls were generated from neighborhoods on the South and West Sides where there had been growth in rental housing and/or stress from foreclosure,” according to the report. Those areas also generated high numbers of calls related to involuntary relocations.

The length of time volunteers spend with callers on hotline requests has gone up “as problems become more acute and complex,” said study co-author Ann Barnds, a former MTO organizer now at UIC. With 10,000 calls a year, “that’s a lot of listening,” she said.

At bottom what’s needed is a new way of thinking about housing, said Bartlett. “It seems like the current approach treats housing as a financial investment instead of an investment in families, in kids doing well in school, in people staying healthy, in commuities where people feel attached because they know they can continue to live there,” he said.

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Category: foreclosures, housing

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