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If a coalition of housing activists has its way, the city will soon unveil a Marshall Plan for low-income housing–a plan that would spend $1 billion over the next five years to build or rehab 35,000 units of housing for the poor. The proposed plan, called the Chicago Affordable Housing and Community Jobs Ordinance, was introduced several months ago by 20th Ward Alderman Arenda Troutman. All summer housing activists have been leafleting el stops, wooing editorial writers, and conducting rallies at City Hall in support of the ordinance. For their efforts they have won the strong backing of 17 aldermen and more than 200 community groups.
“Go into almost any neighborhood and you’ll see why we need to make this commitment to housing,” says David Hunt, executive director of the Chicago Rehab Network, a citywide coalition of not-for-profit housing developers. “In some communities you have huge portions of land that’s devastated. If we don’t address the housing crisis our tax base will continue to shrink and our neighborhoods will continue to decay.”
On the other side of the issue stands Mayor Daley, who opposes the ordinance on the grounds that it would cost too much money and that too much of the housing built would be for poor people and not for the middle class. “We support the underlying goal of the ordinance, which is to create more housing, but we think it’s not feasible at this place and time,” says housing commissioner Marina Carrott. “You would always like [to be able to spend] more money, but that’s not possible right now. We think we’re on the right track with the programs we have.”
The dispute dusts off an age-old debate over where the city should spend its economic-development funds. Daley’s investment plans so far–airports, train lines, and gambling casinos–have revolved around fortifying the downtown or expanding the city’s tourist draw, and many housing activists feel he is shunning the neighborhoods.
“The issue as we see it is Daley’s will to address the real housing crisis,” says Josh Hoyt, a veteran neighborhood activist who is helping the Rehab Network organize support for the ordinance. “When it comes to something like renovating McCormick Place or Navy Pier or building a downtown trolley, casinos, or new airports, the mayor is ready to fully finance these schemes with taxpayers’ dollars. But when it comes to housing or schools, the underpinnings of the neighborhoods, [the city is] always broke. We can’t afford that attitude any longer.”
As part of the campaign to muster support for the plan, the Rehab Network solicited a report on housing trends in Chicago from Pat Wright, associate director of the Nathalie P. Voorhees Program for Neighborhood and Community Improvement at the University of Illinois at Chicago. Wright’s report, completed last month, paints a pretty bleak picture.
Using 1990 census figures, Wright discovered that median rents rose from $178 in 1980 to $377 in 1990, meaning one-third of Chicago renters–up from 19 percent in 1980–now spend more than 35 percent of their income on housing. At the same time the value of single-family homes in Chicago appreciated 67 percent, and family incomes, measured in real dollars, declined. “Renters and even home owners have less money to spend on housing, while housing costs go up,” says Hunt. “That leads to evictions, foreclosures, abandonment, and deterioration.”
More than 28,000 properties (or 5 percent of all the property in Chicago) are two years behind in property taxes, Wright reports. In the past five years, the number of housing court cases on the books has increased from 8,564 to 15,175. Nearly 40,000 apartments were demolished in the 1980s; 3,260 other buildings are currently abandoned or in danger of demolition. In some low-income communities, as much as 40 percent of the land is vacant.
Bowing to pressure from community groups, the city agreed earlier this year to spend about $10 million demolishing abandoned buildings, many of which have become hangouts for drug dealers and gangs. The demolition program underscores the cruel reality of housing in poor neighborhoods: it’s often cheaper to destroy buildings than to maintain them at affordable rents.
The housing crisis is most drastic in East Garfield Park, Oakland, and other predominantly black and poor south- and west-side neighborhoods. There residents scrape by on a median income of roughly $15,000, paying up to 55 percent of their income on rent.
“We live in a city of extremes,” researcher Deborah Weiner wrote in an introduction to Wright’s report. “The average home price in Lincoln Park was $323,900 in 1990; in East Garfield Park, it was $39,700. Conventional banks invested more than $220 million in the Near North Side in 1991; Oakland saw an investment of $2.1 million.”
Private lenders stay away from poor communities, figuring that the profits aren’t worth the investment risks. Instead they concentrate on affluent neighborhoods like Lincoln Park and the near north side. “Only one percent of all banks lending in 1991 reached nine African-American communities on the city’s south and west sides,” according to Wright’s report. “The five predominantly Latino areas received only 7.5 percent while three predominantly white communities on the lakefront received more than 26 percent of housing lending for the whole city.”
The Chicago Affordable Housing and Community Jobs Ordinance proposes to offer developers low-interest loans to build or rehab housing; it would also subsidize rents if necessary. Most of the construction would be overseen by for-profit developers working alone or in partnerships with local not-for-profit organizations. To pay for the program, the authors of the ordinance propose that the city seek new federal funds and more efficiently handle the federal money it already receives (the Department of Housing failed to use about $23 million in federal funding last year because it couldn’t process the forms in time). In addition, goes the proposal, the city could raise more money through bonds.
But city officials contend that they can’t realistically expect the federal government to provide more housing money. “We would end up taking money from other valuable city programs,” says Carrott. Moreover, administration officials are reluctant to concentrate too many of their resources on low-income housing. As Carrott sees it, the Department of Housing’s job is to act almost like a bank, disbursing its annual appropriation of federal funds (about $100 million) as it sees fit to encourage the development of housing for low-income and middle-class residents. “Our job is to stimulate private-sector development of housing for the development of households whose rental needs are not met through normal markets,” says Carrott. “At the lower end of the spectrum we provide financing for the construction or renovation of SROs. But we also have a middle-income program that reaches out to households earning about $58,000.”
She says the city helped construct 1,700 units of low-income housing last year, as well as several hundred homes that were selling for as much as $100,000. Such housing not only is an affordable alternative for middle-class residents, Carrott argues, but attracts middle-class residents to poor neighborhoods. “These families and individuals provide role models and an economic base for a community,” Carrott wrote in a memo to aldermen. “The city cannot afford to overlook this segment of the population’s housing needs.”
But housing activists say the city is in danger of overlooking the pressing needs of low-income residents.
“It’s fine to help middle-income people and to economically integrate neighborhoods, but the real issue is affordable housing, and they are overlooking that,” says Hunt. “They keep talking about getting the best return on their investment. Wait a minute–this is not their money. These are federal tax dollars that should be used for some overall societal gain, not to make money.”
When the Rehab Network first approached Carrott seeking support for the ordinance, she turned them down. “Increasing money alone is not the answer,” she says. “I think we are doing a superior job of using the resources available to us, and I will take some of the credit for that.”
The Rehab Network caught city officials by surprise with an August 19 rally that drew about 600 protesters to City Hall. They claim to have won commitments of support from such Daley loyalists as Mary Ann Smith (48th Ward), Michael Wojcik (35th Ward), Billy Ocasio (26th Ward), and Bernard Stone (50th Ward). Carrott and other officials have countered with closed-door briefings in which they’ve urged aldermen to vote against the ordinance. “The administration has put out the word,” says Hunt. “They don’t want this to pass.”
Despite the strong words, both sides say they hope some sort of compromise can be reached. Carrott says she plans to meet with Hunt and other activists. “I think we share most of the same goals,” she says.
The housing activists say they will continue to lobby aldermen. “It could come down to the mayor’s Hispanic allies,” says Hunt. “There’s a housing shortage in Hispanic neighborhoods. Those aldermen would have a tough time explaining to voters why they voted against what their neighborhoods need.”