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Coalitions (quietly) Score Pair of Housing Wins

Easy to overlook amid the sound and fury of recent state and city elections, the effort to save and supplement Chicago’s endangered supply of affordable housing took a couple of giant steps forward this past winter.

The notorious Diplomat Hotel was transformed into a single room occupancy building for the develomentally disabled. It's an example of what a new city ordinance is intended to encourage.

Gordon Walek

Following vigorous campaigns by grassroots coalitions that included several of LISC Chicago’s neighborhood partners, the city enacted two new laws – one to protect single-room occupancy hotels (SROs) and another to require that developers of luxury housing do more to promote affordability.

Both ordinances were designed to narrow the widening gap – in Chicago no less than across the nation – between rich and poor, especially now that the upscale real estate market has sprung back to life … and gentrification is back as a vexing problem.

“What we saw was a non-partisan, rational approach to the issue,” said Susana Vasquez, LISC Chicago’s executive director, about the new ordinances. Credit should go, she said, to Mayor Rahm Emanuel, to key aldermen from wards facing development pressure and to community advocates that built coalitions capable of stirring public officials to action.  

Balance struck  

Action surely is what they got, albeit after months parrying arguments by SRO owners and luxury developers that any new requirements would strangle their market. What emerged is a compromise that strikes, in the words of Mayor Emanuel, “a critical balance between development that will help spur Chicago’s economy into the future while providing safe and affordable housing for its residents.”

Mark Ishaug, the CEO of Thresholds, which runs the old Diplomat (now known as Pamela Buffett Place ) says that allowing the developmentally disabled to go homeless, and too often to slide into substance addiction and end up in jail, is more costly than providing safe, affordable housing..

Eric Young Smith

On November 12, 2014 the City Council passed, by a vote of 47-2, a “Chicago For All” ordinance that requires owners’ intent on selling single-room occupancy hotels (SROs) to do two things. First, seek out and negotiate with a potential buyer willing to maintain affordability for existing tenants; or, failing that, pay $20,000-per-unit into a city SRO preservation fund, as well as pay specified relocation expenses to all displaced tenants.

Then on March 18, 2015, two weeks before the mayoral runoff election, the Council passed a set of changes to the city’s Affordable Requirements Ordinance (ARO), last updated in 2007. Developers of 10 or more units in projects getting city assistance – such as a zoning change or a financial subsidy – still must price 10 percent of their units as affordable … or pay a fee into a city fund dedicated to affordable housing projects. But the previous flat $100,000-per unit fee is now scaled up to $150 - 225,000 in high-income census tracts like downtown, and down to $50,000 in less affluent parts of the city. Developers must also now locate at least one quarter of the affordable units on site or within a similar neighborhood nearby, with an exception for downtown condo buildings.

Andrew Mooney, city commissioner of development and planning, estimated these and other changes would create 1,200 affordable units and over $90 million in housing funds over five years. If successful, these resources will help an increasingly difficult housing market for renters in Chicago, where now one half of all households are considered overly cost-burdened by federal government standards – double the number from the 1970’s.

The situation is especially acute in neighborhoods like Logan Square, where a revived market for upscale condos and luxury rentals is pushing out working-class families.

“The pressure is tremendous,” said Nancy Aardema, executive director of the Logan Square Neighborhood Association (LSNA), part of LISC Chicago’s New Communities Network. Especially feeling it are landlords and tenants near the new “606” biking and hiking trail -- a converted east-west rail spur running 2.7 miles along the border between Logan Square and Humboldt Park.

A new city ordinance requires developers of 10 or more units in projects getting city assistance – such as a zoning change or a financial subsidy – still must price 10 percent of their units as affordable … or pay a fee into a city fund dedicated to affordable housing projects.

Eric Young Smith

LSNA pushed for passage of a strengthened ARO, Aardema said, and now wants the city to broaden the kinds of developments subsidized by its trust fund so as to help hundreds of “ma and pa” owners of 2- and 4-flat buildings. They need help to hold on and stay affordable, she said, what with sales prices spiking along the 606 and tax reassessments based on those prices due out later this year.            

Diplomatic model

The SRO ordinance, meanwhile, replaces a citywide moratorium on conversions that was imposed last year after it became apparent that dozens of older hotels were in danger of being converted to upscale residences, forcing hundreds if not thousands of have-not tenants into a marketplace all but devoid of low-priced vacancies.

“What’s different about this ordinance is that it changes the calculus between developers and low-income residents,” ONE Northside Executive Director Jennifer Ritter has explained. “It makes clear that even if there are financial ramifications for the [SRO] owners who want to sell or the developers who want to buy, that’s okay because affordable housing is that important.”

Although it was done without benefit of either ordinance, a prime example of what can be accomplished was highlighted Feb. 17 at the 21st annual Chicago Neighborhood Development Awards (CNDA).

Conversion of the derelict Diplomat Hotel on Sheffield Avenue in Lakeview into a home-like residence for the developmentally disabled was recognized with two awards. Brinshore Development LLC and Thresholds, the state’s largest provider of services to the disabled, were cited for achieving 2014’s best non-profit neighborhood real estate project. Now called Pamela Buffett Place for its main benefactor, the old Diplomat was converted from 91 cramped, filthy apartments to 51 spacious, light-filled units, each with a full bath. Landon Bone Baker Architects also won first place in CNDA’s Richard H. Driehaus Foundation Awards for Architectural Excellence in Community Design.

Organizing around issues

“This is a terrific honor,” declared Mark Ishaug, Thresholds’ CEO, in accepting the best project award that night in front of 1,500 business and community leaders at the Chicago Hilton. Then, regarding proposed cutbacks in state funding for disability services, he challenged Gov. Bruce Rauner and state lawmakers “to make Illinois the most competitive and the most compassionate state … by creating more Buffett Places, by investing in our neighborhoods and our neighbors.”

In a follow-up interview, Ishaug explained that allowing the developmentally disabled to go homeless, and too often to slide into substance addiction and end up in jail, is the most expensive option. Not to mention the least humane.

“We have to be more aggressive about maintaining affordable housing for people with very low incomes,” Ishaug said. “We have a compelling story that’s both humane and value-based.”

Little wonder that stemming the loss of SROs and strengthening affordability requirements on developers were both contemplated by the city’s five-year housing plan adopted by City Council on Feb. 5, 2014.

“These ordinances are two more things that we as community developers can build upon,” said LISC’s Vasquez, who co-chaired the advisory committee that oversaw drafting of the city’s housing plan. “They also show how well our neighborhood partners can organize and find consensus around tough policy issues, not just physical projects.”

More information on housing: Barb Beck, BBeck@lisc.org or Jake Ament, JAment@lisc.org

Posted in Housing

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Local Initiatives Support Corporation Chicago connects neighborhoods to the resources they need to become stronger and healthier.

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