Chicago Coalition for the Homeless

Homes not priced to sell to low-income
By Chris Fusco
July 30, 2009

City Hall often touts how it’s transforming blighted neighborhoods by using taxpayer money to subsidize new developments that include “affordable” homes for families.

But the families who need those homes the most can’t live in them because they’re priced too high, a report to be released today concludes.

Instead, half of those homes — about 3,200 — are being sold or rented to people who earn more than the city’s median income. In some cases, those higher-income people are buying those properties using city subsidies that were a focus of a Chicago Sun-Times investigation.

“When people hear ‘affordable,’ they make an assumption that the city is going to help low-income people get housing,” said Chicago Coalition for the Homeless policy director Julie Dworkin, who wrote the report for the newly formed Sweet Home Chicago Coalition. “Then we find out what ‘affordable’ means. It’s not what you really think.”

The coalition — which includes Dworkin’s organization and 11 other groups — says it wants the City Council to fix this problem, which is occurring in developments that have gone up or are on the drawing the board in city tax-increment financing districts.

Mayor Daley’s administration, however, says the coalition is focusing too closely on TIF housing and ignoring other city housing programs that help the poor.

“Under Mayor Daley’s leadership, Chicago has been viewed as a leader in affordable housing,” said Molly Sullivan, spokeswoman for the city’s Department of Community Development. “Overall, we believe that a range of policies and programs yields the best results.”

But the coalition says the city is sitting on as much as $520 million from its 158 TIF districts that could be spent on affordable housing right now. During a press conference today, its members plan to call for a city ordinance that would require 20 percent of the TIF money that the city collects each year to be invested in affordable homes.

Coalition members also want the city to revise affordability standards that they say have allowed thousands of higher-income buyers to buy or rent homes in subsidized developments.

Sullivan admitted that “initial affordability requirements were not as stringent as they are today” but said that problem has been fixed. She also said it’s “a misconception” that the city has a pot of TIF money to spend on affordable homes citywide because state law requires those dollars to be spent in areas they are reserved for. “Changes to that must be done at the legislative level in Springfield,” Sullivan said.

The push for more affordable housing follows a series of Sun-Times stories about apparent affordable-housing abuses. In one TIF development — University Village, near the University of Illinois at Chicago — the newspaper found that 50 of 187 affordable homes were resold by the original buyers — often within months — for an average profit of $67,000.

“The irregularities at University Village are part of a more systematic problem that has plagued the city’s funding of affordable housing,” Dworkin said.

A big problem, the study concludes, is that City Hall is pouring the lion’s share of tax-increment financing subsidies into market-rate developments like University Village.

Such developments are required to contain only 20 percent affordable units. But the city has committed nearly $134 million in TIF money for such projects since 1995, as opposed to $71 million for Chicago Housing Authority projects and $76.5 million for affordable-rental developments.

Regardless of the type of project, affordable-housing prices and rents are so high that they’re driving existing residents out of city neighborhoods, according to the study.

For example, Mona Douglas, 34, said she had been paying $980-a-month to rent a three-bedroom apartment in the 4000 block of South Ellis before developments with affordable units started being built near her building. By early 2008, her landlord gradually increased her monthly rent to $1,300, she said.

“I had a good job, but the landlord saw the community changing. I guess he looked at that as an opportunity he could make more money,” Douglas said.

She couldn’t find a reasonably priced apartment in her neighborhood and has since moved with her husband and two daughters to Lafayette, Ind.

© 2009 Digital Chicago, Inc