This issue brief provided through Community Media Workshop's Community News Project.
Affordable Housing: New Strategies for a Growing CrisisMay 2004
Decades of declining federal housing support, along with rising land and construction costs, have created a growing national affordable housing shortage, as skyrocketing housing prices have shot beyond stagnating wages for working families.
In Chicago it's worse. In the 1990s, new immigrants reversed decades of population loss, but housing production didn't keep up: 100,000 new residents were added but only 20,000 new housing units. Meanwhile a real estate boom fueled condo conversions that contributed to a net loss of rental units.
The Chicago Rehab Network estimates there's a shortage of 49,000 affordable rental units in Chicago. Almost 200,000 Chicago households are "rent burdened," paying over 35 percent of their income for housing, with 116,000 paying over 50 percent and often forgoing other necessities.
The National Low Income Housing Coalition estimates the "housing wage" in Chicago in 2003 was $18.29 -- that's how much a full-time worker has to earn hourly to afford a typical two-bedroom apartment. A family head earning minimum wage would have to work 139 hours a week -- three-and-a-half jobs -- to afford fair market rent.
In communities around the city, long-time residents are being pushed out and priced out, and the social fabric that made Chicago a city of neighborhoods is being torn apart. Research shows that effects of displacement range from higher crime rates to lower test scores at schools with high mobility rates.
For families with the lowest incomes, the crunch is hardest. There are now almost 56,000 families on the CHA's waiting list and over 23,000 Chicagoans on the housing choice voucher waiting list (with diminishing prospects for placement on either list) according to a 2003 study by the Heartland Alliance, "Not Even a Place in Line."
And it could get even worse, as the CHA's transformation reduces the public housing stock by one third (13,000 family units), and as some 18,000 project-based subsidized units expire in the next five years, along with thousands of tax credit-financed units. If the Bush administration succeeds in rewriting regulations to limit funding for housing vouchers -- or block-granting the program -- that will reduce federal support further.
CITY'S HOUSING PLAN
As the feds have backed off, Mayor Daley has stepped up. Under two five-year affordable housing plans, the city has marshalled some $2 billion in federal, state, city, and private funds, and a third plan for 2004-2008 projects increased spending.
The city's plans have brought the issue attention and focus, and they've won praise for openness in planning and review. But little of the money -- only about $15 million a year -- has come from the city, according to the Chicago Rehab Network, a coalition of the city's nonprofit housing developers (Kevin Jackson is executive director, 312-663-3936) which monitors the plan. CRN has called on Daley to commit at least 2 percent of its corporate budget, or $95 million, to affordable housing initiatives.
CRN has also called on the city to prioritize rental development and assistance over support for homeownership; to rely more on nonprofit developers, who are committed to long-term affordability; and to direct resources to lower income levels.
Because the city sets affordability goals using the Area Median Income, which includes earning levels from wealthy collar counties, the lion's share of homeownership assistance has gone to families with incomes above the city average, and far above averages in poorer neighborhoods. One CRN study found that housing built in low-income neighborhoods with Low Income Housing Tax Credits (the largest federal housing production program) was unaffordable to two-thirds of local residents. In West Town, Bickerdike Redevelopment Corporation has insisted on using neighborhood income levels to determine affordability levels.
In a market economy, the market might be expected to provide housing for middle-income families. But in Chicago (as elsewhere), "market-rate" housing is affordable only to the wealthy. Pat Wright at UIC's Voorhees Neighborhood Center (312-996-5952), a premier housing research center, refers to "market-rate" and "affordable" housing as "luxury" and "middle-class" housing, respectively. (Vorhees works with the Statewide Housing Action Coalition and Latinos United to run the Illinois Assisted Housing Research and Action Project (IHARP), a comprehensive data base of assisted and public housing, including housing owned and managed by private and nonprofit developers. Another data resource is the new edition of CRN's "Affordable Housing Fact Book," giving detailed information on housing trends around the state.)
CRN and many others are pushing the Mayor to support a set-aside ordinance introduced in 2002 by Ald. Toni Preckwinkle (4th Ward) and revised in 2004 to require that 15 percent of all market housing developments be affordable (with zoning bonuses offered in return). That would harness the energy of a booming real estate market to meet middle-class housing needs -- and allow the city to target its resources to the neediest. (Along with CRN, the Balanced Development Coalition has rallied community organizations behind the set-aside ordinance; Sarah Jane Knoy of Organization of the North East, 773-769-3232, chairs the coalition.)
Mayor Daley has steadfastly opposed the idea, fearing it will discourage development, but it has worked in other cities (including Highland Park), and a growing number of aldermen have signed on, reflecting the growing housing crisis in the neighborhoods. Business and Professional People in the Public Interest has studied setasides in other cities (contact Nick Brunick, 312-641-5570). A new state law requires annual affordable housing plans from many suburbs, and a group called Evanston's Affordable Housing Future is building support for an inclusionary housing policy there (contact Gail Schechter, 847-501-5760).
STATE HOUSING TASK FORCE
In Springfield, meanwhile, Governor Blagojevich created a new state interagency task force on housing in September 2003. Chaired by Kelly King Dibble, executive director of the Illinois Housing Development Authority (312-836-5361), the task force is charged with developing an annual state housing plan to coordinate housing efforts by state agencies, prioritizing the needs of underserved constituencies, including low-income families, seniors and people with disabilities, and families at risk of becoming homeless or losing existing affordable housing.
At the same time, however, Blagojevich has raided the Illinois Affordable Housing Trust Fund -- the only state outlay dedicated to affordable housing -- in 2003 and 2004, taking almost $9 million to plug gaps elswhere in the state budget. But led by the Statewide Housing Action Coalition (Tammie Grossman, executive director, 312-939-6074), groups from across Illinois have maintained pressure to create a state rental subsidy program -- modeled on the Chicago Low Income Housing Trust Fund -- and to fully fund the state's homelessness prevention fund. (Check leginfo.org to track the legislative goals of SHAC and other Illinois nonprofits.)
Ultimately, many maintain that the federal government must be active in producing affordable housing. Numerous Chicago housing groups are among the 5,000 organizations nationally now endorsing a National Housing Trust Fund. It would use FHA surpluses to build, rehab and preserve 1.5 million units over the next ten years. The November 2004 election could give this proposal a boost, since Sen. John Kerry of Massachusetts is one of the main sponsors of the Trust Fund. Lakeview Action Council (Matt Moreland Gross, 773-549-1947), which has worked with seniors in buildings threatened with losing Section 8 subsidies, has been prominent in organizing pressure on the local congressional delegation to support the Trust Fund.
NONPROFITS PROVIDE HOUSING
Because affordable housing is at the core of their mission, nonprofit community development corporations (CDCs) are often best at directing housing resources to low-income families and ensuring long-term affordability. These groups, many of them based in religious congregations, generally construct and rehab affordable housing for rent and for sale, often addressing other local concerns through social services and community organizing.
Bickerdike Redevelopment Corporation has won recognition as a successful community-based developer that has produced nearly 1,000 units of affordable housing -- and a grassroots membership organization run by community residents and dedicated to community control of development. In its early days the group fought disinvestment, focusing on construction of affordable single family homes, but in recent years disinvestment has been succeeded by gentrification and displacement. Having carved out toeholds for some longtime residents in the east part of the neighborhood, Bickerdike and others are now striving to maintain a mixed-income community in the west by preserving and producing affordable housing -- and organizing to require private developers to include affordable units in new development projects. The group is currently piloting a hybrid ownership form for new housing which uses federal tax credits requiring 15 years of rental operation but sets up low-equity cooperatives to go into effect after that. Bickerdike executive director Joy Aruguete (773-278-5669) is also president of CRN's board.
In West Humboldt Park, Nobel Neighbors (executive director Dean Morris, 773-252-8524) has moved over the years from organizing against homes abandoned in FHA mortgage foreclosures, to assisting victims of predatory loans, to experiments with affordable home development. Now they're coming full circle, working with Hispanic Housing Development Corp. (Hipolito "Paul" Roldan, 312-443-1360, is executive director), which is buying up and rehabbing groups of abandoned HUD-owned homes.
And as rising land costs make affordable housing development more difficult, the West Humboldt Park Development Council is launching the city's first community land trust, which will eliminate land acquisition costs for affordable developers, and offer homebuyers 99-year renewable land leases with affordability stipulations. (Contact Kelsa Rieger, 773-826-4287.)
Like Bickerdike and Nobel Neighbors, the Resurrection Project in Pilsen grew out of an organizing drive which identified housing as a major concern. Founded by local Catholic parishes, TRP originally built affordable homes for church members, and has branched out -- along with rentals and youth and education projects, they've created the Resurrection Construction Cooperative to help emerging construction-related businesses. Now, as one of 16 community groups developing and implementing long-term visions under the MacArthur Foundation's New Communities Program, TRP is creating El Zocalo, a town center for Pilsen like the plaza at the center of a typical Mexican village. Nearby is the site of La Casa, an affordable and supportive dormitory and center being built by TRP for Latino students at nearby colleges and universities.
On the West Side, Bethel New Life and Lawndale Christian Community Development Corporation both grew out of the concerns of individual churches. Bethel has grown into a national model for holistic community development, starting with $5,000 in 1979 and going on to bring $100 million in investments into credit-starved West Garfield Park, develop 850 housing units, place 7,000 people in living-wage jobs, and establish centers for employment, day care, seniors, health care, and recycling, with a community and cultural center at an abandoned hospital. (Mary Nelson is founder and executive director, 773-473-7870.) Lawndale Christian, which focuses on commercial and residential development, is one of the founding organizations of the regional justice coalition called United Power for Action and Justice. With LCDC's support, United Power has acquired over 100 city lots in North Lawndale and is planning a massive affordable housing development called Ezra Homes (contact Donna Holt at 773-542-0247).
In Bronzeville, Genesis Housing Development Corporation (Donnie Brown, executive director, 773-285-1685) joins four local churches to build affordable housing and provide training in construction trades for low-income youth. In Washington Park, the church-based St. Edmund's Redevelopment Corp. (Rev. Richard Tolliver, 773-752-8893) has become the first nonprofit to acquire CHA property, developing 56 units in a boarded-up lowrise into a mix of market rate, affordable, and public housing. And in the depressed former steel community of South Chicago, Claretian Associates (773-734-9181) develops affordable housing, focusing on a 12-block area for maximum impact, while it provides housing services throughout the 60617 zip code and builds community with programs ranging from financial literacy and resident leadership development to a youth art center.
In Chicago Lawn and Marquette Park, Greater Southwest Community Development Corp. is a community revitalization organization in an area which was intensely redlined as it went from nearly all-white to almost all black and Latino in recent decades. The group does commerical and industrial along with affordable housing development, and like many groups it's now emphasizing homeowner education as the best way to address the rising forecloseure rate. (Betty Gutierrez, 773-436-1000, directs their housing programs; deputy director Donna Stites coordinates their New Communities Program.) Greater Southwest receives daily reports on foreclosure filings from banks and contacts homeowners, but by then it's usually too late.
HOMEOWNER EDUCATION
Foreclosure rates have risen dramatically in Chicago --from 131 in 1993 to 4,957 in 1999, according to a study by National Training and Information Center. (NTIC supports community organizing across the city and the nation; Amalia Nieto Gomez, 312-243-3035, works on predatory lending.) And the numbers continue to go up. In part this reflects the success of nonprofits developing affordable homes for first-time buyers through the city's New Homes Chicago program; low-income homeowners are more susceptible to financial crunches.
But there's strong relationship between skyrocketing foreclosures and increased levels of predatory lending, according to a 2004 study by the Woodstock Institute (312-427-8070, a good source for information on community reinvestment and homebuying data). Community groups have won increased state regulations, but predatory lenders -- who market high interest loans with hidden fees and other tricks to low-income seniors and others who are equity-rich and cash-poor -- have found new ways to keep operating.
Led by Neighborhood Housing Services, Chicago is charting new ground in educating homeowners (and the financial community) to prevent foreclosures. A pioneer in promoting investment in underserved communities, NHS has brought together lending institutions to create a pool of capital for refinancing predatory loans; through the city's Home Ownership Preservation Initiative, NHS provides homeowners facing foreclosure with counseling and intervention -- including negotiating with lenders and, if necessary, refinancing. Now Chicagoans can access NHS foreclosure prevention services through the city's 311 non-emergency service. Bruce Gottschall (312-783-2227) is executive director; Mary Fran Riley (773-329-4129) directs communications.
The city's Department of Housing certifies community agencies to provide counseling on predatory loans and other homeownership issues. Spanish Coalition for Housing (contact Hector Damboa, 773-276-7633) provides such counseling at numerous locations; the group also runs a Latino Landlord Resource Center, in part to help new landlords provide affordable housing options.
Community Investment Corporation also helps independent landlords provide affordable housing. CIC operates a loan pool of $550 million from 50 institutional investors, lending primarily to hands-on private multifamily developers to preserve quality affordable housing. The group emphasizes rehab and good management in the belief that its lending should benefit tenants and neighborhoods as well as owners. CIC also offers a 12-hour Property Management Training course for landlords twice a month in neighborhood and suburban locations. Martin Berg (312-258-0070 ext. 219) directs communications.
The Chicago Community Loan Fund (Calvin Homes, executive director, 312-252-0440 ext. 230) provides low-cost, flexible financing for newer and smaller CDCs, which often have difficulty accessing capital.
A major bridge between the financial community and the city's neighborhoods is the Local Initiatives Support Corporation of Chicago, the local office of a national group that taps financial institutions as well as foundations and government for funds to help community groups with affordable housing and other development projects. The group's New Communities Project, funded largely by the MacArthur Foundation, helps CDCs which are moving beyond bricks and mortar to engage in long-term community planning processes. Amanda Carney (312-697-6102) heads NCP; Andrew Mooney (312-697-6104) is executive director at LISC-Chicago.
Federal Low Income Housing Tax Credits are among the basic supports for new construction of affordable rental housing. These tax shelters for high-income individuals and corporations are packaged and marketed to investors by nonprofit financial intermediaries such as the National Equity Fund (contact Colleen Mulcahy at 312-360-0400) and the Chicago Equity Fund (William Higginson at 312-943-2266.
As preservation of affordable housing increasingly becomes an issue, the Chicago Mutual Housing Network is promoting housing cooperatives as a long-term affordable alternative, offering training and technical assistance to cooperatives around the city. Mutual housing is a good option for maintaining affordability in hundreds of buildings where project-based Section 8 subsidies will expire in coming years, according to CMHN executive director Sharon Danhoss (773-278-9210).
Metropolitan Tenants Organization operates a tenants rights hotline, helps building-based tenant groups organize, and has helped pull together a citywide Coalition for Fair Community Development, based on the principle that the prime beneficiaries of development should be residents already living there. Pam Alfonso (773-292-4980) is executive director. The Lawyers Committee for Better Housing provides free legal servies for low-income tenants, including keeping volunteer attorneys available at Eviction Court, where they are now seeking to introduce reforms. Kathleen Clark (312-347-7600) is executive director.
TWO TEN-YEAR PLANS
The city has two other major housing plans, both operating on 10-year timelines: a new Plan to End Homelessness, launched in 2003, and the Chicago Housing Authority Plan for Transformation, dating from 1999.
With some 15,000 (by some estimates, far more) Chicagoans experiencing homelessness each year -- including increasing numbers of working people and families -- the city's ambitious plan to end homelessness reflects a move from managing homelessness to ending it, replacing the current shelter system with permanent housing and providing people with the supportive services they may need to stay off the streets. It also calls for a much greater degree of coordination among service providers, and Chicago Continuum of Care (K. Sujata, 312-573-8819, is director) facilitates coordination and planning among public agencies, nonprofit service providers, and advocacy groups. Another key player in implementing the plan is the Partnership to End Homelessness (contact Nancy Radner, 312-566-9255), a coalition of 80 housing and service providers which does advocacy and policy development toward the goal of ending homelessness. PTEH members operate over 5,000 shelter beds plus the majority of permanent housing for individuals and families struggling with homelessness.
One of the largest providers of permanent housing is Lakefront Supportive Housing (Jean Butzen, 312-447-4500), which provides supportive services including addiction recovery, literacy, and employment training to help tenants graduate to the mainstream. Another model is Deborah's Place, which has built three residences for the growing number of homeless women. Audrey Thomas (773-722-5080) is executive director.
Founded in 1980, the Chicago Coalition for the Homeless advocates for and organizes among the homeless, and has focused on youth, day laborers, and most recently sex trade workers, as well as issues like substance abuse and living wages. Ed Shurna is executive director and Les Brown and Julie Dworkin handle policy questions (312-435-4548). CCH is one of the founders of the Coalition to Protect Public Housing, and has expressed concern that while fighting homelessness with one ten-year plan, the city is "dramatically worsening homelessness" with its plan for the CHA. Service providers have already begun to document hundreds of people moving from CHA into homeless shelters, according to CCH.
The $1.6 billion, ten-year CHA plan resulted from a federal mandate to assess the cost-effectiveness of rehabbing deteriorated public housing units, and the suspension of federal requirements of one-for-one replacement for public housing units that are demolished. The CHA ended up with the largest demolition plan in the nation -- 51 highrises are being torn down and replaced with mixed-income housing; 25,000 families units rehabbed or replaced and 13,000 more demolished. Tenants are guaranteed a replacement unit or a housing voucher, if they meet stringent new tenancy requirements, including work requirements.
The Coalition to Protect Public Housing, led by outspoken Cabrini Rowhouse president Carol Steele (312-280-2298; organizer Diedre Brewster is also at that number), has scored CHA for demolishing thousands of units before new or rehabbed housing is available; for new lease requirements that could exclude a majority of current CHA residents; and for resegregating CHA tenants who have moved into the private market with housing vouchers. They say funding mixed income development, and demolishing public housing, doesn't make sense at a time when the poorest Chicagoans face a dramatic and growing housing shortage. Steele has called on the CHA to suspend demolitions and "perform a new building-by-building analysis to determine their potential for rehabilitation."
CPPH members include the Jewish Council on Urban Affairs (Jane Ramsey, 312-663-0960, is executive director); the National Center for Poverty Law (William Wilen, 312-263-3830), which has several class action suits on tenants' behalf; and the Community Renewal Society (Jim Field, 312-673-3843, is lead organizer), which has pulled together an Interfaith Network of religious leaders, several of whom minister to CHA residents.
The Central Advisory Council, comprised of presidents of elected resident councils for all CHA developments, has negotiated a relocation contract with CHA -- and has questioned the pace of demolition. Mary Wiggins (312-225-4120) is president and Richard Wheelock (Legal Assistance Foundation, 312-347-8389) is CAC's attorney.
Mary C. Johns (7312-745-2682) is editor of Residents' Journal, the independent journal for CHA residents, with an ear to the ground at numerous CHA developments.
Alex Polikoff at Business and Professional People for the Public Interest (312-641-5570) filed the Gautreaux case in 1966 charging CHA with racial segregation. BPI continues to monitor CHA's efforts toward creating mixed income communities, especially relocation to "opportunity" areas (non-segregated communities under the Gautreaux decree) and CHA's coordination of social services -- both also interests of Metropolitan Planning Council housing director Robin Snyderman (312-863-6007).