The story began last summer in Pilsen when Mayor Daley, preparing for reelection, promised a cheering crowd city funds for new housing.

By November the mayor had backed off on his promise, a feud had erupted between rival housing groups in Pilsen, and two of the city’s most prominent Hispanic aldermen, Juan Soliz (25th Ward) and Luis Gutierrez (26th), had gotten caught in the middle. The ensuing soap opera involved neighborhood rivalries, politicians’ egos, and at least one failed affordable-housing project.

“It’s complicated, but if you look closely you’ll see the reasons that underlie our actions,” says Gutierrez. “Everyone is acting out of self-interest.”

At the heart of the dispute is New Homes for Chicago, the Department of Housing’s $3 million program to build new homes on vacant lots in run-down neighborhoods. Under the program, the city gives developers $20,000 per house, which must then be sold for less than $100,000 to buyers who make no more than $52,000 a year. Developers must work with not-for-profit community groups, and the program also spares buyers from various building and borrowing fees.

New Homes was unveiled last summer to rave reviews, particularly from housing activists in Pilsen, a poor, predominantly Mexican community just southwest of the Loop.

The Pilsen Neighbors Community Council, a 36-year-old grass-roots group, teamed up with developer Luis Sito, who agreed to build 40 prefabricated homes for about $84,000 each.

“Our builder is Hispanic, and we are requiring him to hire people from the community,” says Carmen Vera-Gualtieri, housing director for the Community Council. “We have indigenous Pilsen residents eligible to take advantage of the housing.”

Meanwhile the Pilsen Resurrection Project, a coalition of five Pilsen churches and several not-for-profit housing groups, made a New Homes deal with Lexington Homes, a developer of suburban properties.

“Our mission is to stabilize the community in ways that include and go beyond New Homes for Chicago,” says Raul Raymundo, president of Resurrection. “We already get city funds that people can borrow to rehab their homes.”

Watching the applications pour in was Gutierrez, chairman of the city council’s Committee on Housing, Land Acquisition, Disposition, and Leases. He says he was the one to come up with the idea for New Homes. “I unveiled it at an August 1989 meeting of the City Club,” he says. “You can look it up.” But he has received almost no public credit; almost all media accolades have gone (and still go) to Daley.

Worse yet, Gutierrez got all the blame when a different housing program–a demonstration project in Wicker Park devised by Gutierrez, endorsed by Daley, and intended to prove that manufactured homes could be built so they were affordable to working-class people–went bust.

“Ald. Gutierrez’s folly,” read the headline on reporter Mark Hornung’s October 1 Crain’s Chicago Business article, which described how a manufactured home built by Luis Sito on land sold at discounted rates by the city was priced at $198,000, well beyond the budget of most locals.

In the article, several Daley aides expressed shock and disdain over the house’s high price. Gutierrez shared their sentiment, but their statements enraged him. At least three key members of Daley’s cabinet–housing department commissioner Michael Schubert, building commissioner Dan Weil, and chief mayoral adviser Frank Kruesi–had conferred with Sito about the house. The mayor himself had even visited it. Yet when it came time to lay blame, Gutierrez alone was pushed on the sword.

“How the hell was I supposed to know how much Sito was charging for that house? I wasn’t overseeing every detail,” he says. “And if I’m supposed to know, how come Kruesi, Weil, or Schubert aren’t supposed to know? They come across as so smug and self-righteous, like I’m this lone cowboy who screwed up.”

A day after the Crain’s story ran, Gutierrez held a press conference to tell his side, and the Tribune responded with a sympathetic article. But Gutierrez still felt betrayed.

“This has nothing to do with the mayor; Rich is one of the few guys on the fifth floor that I can trust,” says Gutierrez. “It’s the people who surround him–his palace guard–who are out to screw me. I don’t know why and I don’t really care. The point is that the article left an unwarranted blemish on my record, a blemish I couldn’t ignore.”

While Gutierrez stewed, housing department officials sifted through the 24 New Homes applications they’d received. On November 13, Schubert announced that 128 homes would be built in four neighborhoods, but none in Pilsen. “The decision does not mean the mayor is backing off on his commitment of new housing for Pilsen,” says Schubert. “There will be another round to this program; we just felt that there were other proposals more ready to go in round one.”

Pilsen housing activists, however, didn’t buy it. “The mayor promised us housing and we got none,” says Vera-Gualtieri. “We were not going to take this lying down.”

Instead they went to their alderman, Juan Soliz, and convinced him to introduce an ordinance that would sell 40 vacant city-owned lots in Pilsen to the Community Council for $1 each. Gutierrez cosigned the ordinance, and it was sent to his housing committee for a hearing. In effect, the ordinance was a way for the Council and Sito to build new houses on vacant lots without the $20,000-per-house New Homes subsidy.

“I introduced the ordinance because I knew it would draw attention to the injustice my community had suffered,” says Soliz. “I couldn’t let the housing department just walk away; I had to draw attention to the fact that Pilsen had been overlooked. I was doing what my constituents wanted.”

But Resurrection’s leaders were furious. “There are thousands of vacant lots in Pilsen, but only 40 are clearly owned by the city,” says Raymundo. “Soliz’s ordinance makes a mockery of the New Homes program by giving Pilsen Neighbors all the lots. It cut us out of the market, and we couldn’t stand for that.”

They angrily turned on Soliz, who faced a tough reelection battle just a few months away. “I never intended to favor one group over another; I thought there were more city-owned lots available,” he says. “I would change my ordinance before I let it cut Resurrection out of development.”

It was too late. Resurrection’s supporters didn’t believe him, and his ordinance blew to the surface a rivalry between the housing groups that had been growing for months. “Resurrection is an organization led by four Anglo priests and an Anglo organizer [named Mike Lofton],” says Vera-Gualtieri. “I think we have moved beyond the days where we need someone coming in from the outside to help us.”

Raymundo, 24, whose family moved to Pilsen from Mexico City in 1972, denies that Resurrection is controlled by outsiders while firing off an allegation of his own: “For years they had a monopoly on power. But it’s reached the point where if they can’t get a program, they don’t want anyone in Pilsen to get it.”

By mid-November, there was no talk of reconciliation or of the relative merits of either proposal. No one even asked whether Pilsen’s residents were best served by a bunch of suburban-style houses when there were already many fine bungalows and two-flats for sale in and around the area for far less. (A single-family home goes for about $40,000, a two-flat for $45,000. “New Homes is really a neighborhood-confidence-building strategy,” says Schubert, admitting that the asking price of the project’s houses was beyond the reach of most Pilsen residents. “When residents see new homes going up they know that their neighborhood is not going down the tubes.”)

Instead, each side began spreading unsubstantiated rumors about the other to any reporter or politician who would listen, and Resurrection begged Gutierrez to kill the ordinance. This isn’t your fight, they told him; your northwest-side ward is far from Pilsen. But Gutierrez would not relent.

“The ordinance gave me a chance to clear my name,” says Gutierrez. “I could use the hearing to get housing and law department officials to admit–on the record, with their testimony taken by a court reporter–that they did know about Sito’s demonstration project and that I was not a lone gun. I know it sounds risky; most of my advisers said I shouldn’t revive it. But I’ve never been afraid to take risks.”

So on November 19 about 50 activists from both sides of the issue jammed a second-floor city council hearing room as Gutierrez, in a dogged display of inquisitorial thunder, got first a city lawyer and then a housing department official to reluctantly admit that their departments had reviewed various parts of Sito’s plan. By the time Sito finished testifying about Daley’s visit, the listeners from Resurrrection had heard enough. The hearing was almost two hours old; it was after 3 PM; they had jobs to return to and kids to pick up. Forget the demonstration project already, they demanded; let’s talk about Soliz’s ordinance!

Gutierrez unsuccessfully pounded his gavel for silence, and Soliz finally lost his cool. “This is not a circus; this is not a zoo,” said Soliz. “This is a legislative body.”

A few hours later the ordinance was deferred, and neither Gutierrez nor Soliz says he has any plans to revive it. In fact, everyone is trying hard to say something nice about everyone else.

Schubert, for instance, says New Homes round two will be announced in January. And while he “can make no promises, we still want to do housing in Pilsen.” Raymundo wishes the Community Council well because “Pilsen needs all the housing it can get.” Vera-Gualtieri says, “Make sure you mention that many of our members belong to Resurrection parishes.” And Soliz says he’s glad the fighting’s over.

As for Gutierrez, he keeps a transcript of the November 19 hearing close at hand, just in case anyone ever asks him anything about that ill-fated $198,000 house in Wicker Park again.

Art accompanying story in printed newspaper (not available in this archive): photo/Lloyd DeGrane.